================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
among
AUTOTOTE CORPORATION,
AUTOTOTE SYSTEMS, INC.,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as AGENT
__________________________________
Dated as of October 31, 1991
and
Amended and Restated as of October 30, 1992
and
Amended and Restated as of June 4, 1993
and
Amended and Restated as of April 28, 1994
and further
Amended and Restated as of January 26, 1996
__________________________________
================================================================================
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Amount and Terms of Credit..................................... 1
1.01 The Commitments................................................. 1
1.02 Minimum Amount of Each Borrowing................................ 4
1.03 Notice of Borrowing............................................. 5
1.04 Disbursement of Funds........................................... 6
1.05 Notes........................................................... 6
1.06 Conversions..................................................... 8
1.07 Pro Rata Borrowings............................................. 8
1.08 Interest........................................................ 9
1.09 Interest Periods................................................ 10
1.10 Increased Costs, Illegality, etc................................ 11
1.11 Compensation.................................................... 13
1.12 Change of Lending Office........................................ 13
1.13 Replacement of Banks............................................ 14
SECTION 2. Letters of Credit.............................................. 15
2.01 Letters of Credit............................................... 15
2.02 Minimum Stated Amount........................................... 17
2.03 Letter of Credit Requests....................................... 17
2.04 Letter of Credit Participations................................. 18
2.05 Agreement to Repay Letter of Credit Drawings.................... 20
2.06 Increased Costs................................................. 21
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.......... 22
3.01 Fees............................................................ 22
3.02 Voluntary Termination of Unutilized Commitments................. 23
3.03 Mandatory Reduction of Commitments.............................. 24
SECTION 4. Prepayments; Payments; Taxes................................... 24
4.01 Voluntary Prepayments........................................... 24
4.02 Mandatory Repayments............................................ 26
4.03 Method and Place of Payment..................................... 30
4.04 Net Payments.................................................... 31
SECTION 5. Conditions Precedent to the Restatement Effective Date and
Credit Events on the Restatement Effective Date............. 33
5.01 Execution of Agreement; Notes................................... 33
5.02 Fees, etc....................................................... 33
(i)
5.03 Opinions of Counsel............................................. 33
5.04 Corporate Documents; Proceedings; etc........................... 33
5.05 Subsidiaries Guaranty........................................... 34
5.06 Pledge Agreement................................................ 34
5.07 Security Agreement.............................................. 34
5.08 Mortgage Amendments............................................. 35
5.09 Adverse Change, etc............................................. 35
5.10 Litigation...................................................... 35
5.11 Insurance....................................................... 35
5.12 Tax Sharing Agreement........................................... 36
5.13 Solvency Certificate............................................ 36
SECTION 6. Conditions Precedent to the Restatement Effective
Date and to All Credit Events............................... 36
6.01 No Default; Representations and Warranties...................... 36
6.02 Notice of Borrowing; Letter of Credit Request................... 36
SECTION 7. Representations, Warranties and Agreements..................... 37
7.01 Corporate Status................................................ 37
7.02 Corporate Power and Authority................................... 38
7.03 No Violation.................................................... 38
7.04 Governmental Approvals.......................................... 38
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc............................... 38
7.06 Litigation...................................................... 40
7.07 True and Complete Disclosure.................................... 40
7.08 Use of Proceeds; Margin Regulations............................. 40
7.09 Tax Returns and Payments........................................ 40
7.10 Compliance with ERISA........................................... 41
7.11 The Security Documents.......................................... 42
7.12 Properties...................................................... 43
7.13 Capitalization.................................................. 43
7.14 Subsidiaries.................................................... 44
7.15 Compliance with Statutes, etc................................... 44
7.16 Investment Company Act.......................................... 44
7.17 Public Utility Holding Company Act.............................. 44
7.18 Environmental Matters........................................... 44
7.19 Labor Relations................................................. 45
7.20 Patents, Licenses, Franchises and Formulas...................... 45
7.21 Indebtedness.................................................... 46
7.22 Subordinated Securities......................................... 46
(ii)
Page
----
SECTION 8. Affirmative Covenants.......................................... 46
8.01 Information Covenants........................................... 46
8.02 Books, Records and Inspections.................................. 51
8.03 Maintenance of Property; Insurance.............................. 51
8.04 Corporate Franchises............................................ 52
8.05 Compliance with Statutes, etc................................... 53
8.06 Compliance with Environmental Laws.............................. 53
8.07 ERISA........................................................... 54
8.08 End of Fiscal Years; Fiscal Quarters............................ 55
8.09 Performance of Obligations...................................... 55
8.10 Payment of Taxes................................................ 55
8.11 Additional Security; Additional Guarantors; Further Assurances;
etc......................................................... 55
8.12 Ownership of Subsidiaries....................................... 58
8.13 Agent for Service of Process.................................... 58
SECTION 9. Negative Covenants............................................. 58
9.01 Liens........................................................... 59
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.......... 61
9.03 Dividends....................................................... 63
9.04 Leases.......................................................... 65
9.05 Indebtedness.................................................... 65
9.06 Advances, Investments and Loans................................. 66
9.07 Transactions with Affiliates.................................... 70
9.08 Capital Expenditures............................................ 70
9.09 Consolidated Interest Coverage Ratio............................ 71
9.10 Consolidated Fixed Charge Coverage Ratio........................ 71
9.11 Maximum Leverage Ratio.......................................... 72
9.12 Minimum Consolidated EBITDA..................................... 72
9.13 Limitation on Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other
Agreements; etc............................................. 73
9.14 Limitation on Certain Restrictions on Subsidiaries.............. 73
9.15 Limitation on Issuance of Capital Stock......................... 74
9.16 Business........................................................ 74
9.17 Limitation on Creation of Subsidiaries.......................... 75
SECTION 10. Events of Default............................................. 75
10.01 Payments....................................................... 75
10.02 Representations, etc........................................... 75
10.03 Covenants...................................................... 75
(iii)
Page
----
10.04 Default Under Other Agreements................................. 75
10.05 Bankruptcy, etc................................................ 76
10.06 ERISA.......................................................... 76
10.07 Security Documents............................................. 77
10.08 Guaranty....................................................... 77
10.09 Judgments...................................................... 77
10.10 Change of Control.............................................. 77
SECTION 11. Definitions and Accounting Terms.............................. 78
11.01 Defined Terms.................................................. 78
SECTION 12. The Agent..................................................... 107
12.01 Appointment.................................................... 107
12.02 Nature of Duties............................................... 107
12.03 Lack of Reliance on the Agent.................................. 108
12.04 Certain Rights of the Agent.................................... 108
12.05 Reliance....................................................... 108
12.06 Indemnification................................................ 109
12.07 The Agent in its Individual Capacity........................... 109
12.08 Holders........................................................ 109
12.09 Resignation by the Agent....................................... 109
SECTION 13. Miscellaneous................................................. 110
13.01 Payment of Expenses, etc....................................... 110
13.02 Right of Setoff................................................ 111
13.03 Notices........................................................ 112
13.04 Benefit of Agreement........................................... 112
13.05 No Waiver; Remedies Cumulative................................. 115
13.06 Payments Pro Rata.............................................. 115
13.07 Calculations; Computations..................................... 116
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL.................................................. 117
13.09 Counterparts................................................... 118
13.10 Effectiveness.................................................. 118
13.11 Headings Descriptive........................................... 118
13.12 Amendment or Waiver; etc....................................... 118
13.13 Survival....................................................... 120
13.14 Domicile of Loans.............................................. 120
13.15 Confidentiality................................................ 120
13.16 Register....................................................... 121
13.17 Original Notes................................................. 121
(iv)
Page
----
13.18 Agreement Among Signing Banks.................................. 121
13.19 Miscellaneous.................................................. 122
SECTION 14. Holdings Guaranty............................................. 124
14.01 The Guaranty................................................... 124
14.02 Bankruptcy..................................................... 124
14.03 Nature of Liability............................................ 124
14.04 Independent Obligation......................................... 124
14.05 Authorization.................................................. 125
14.06 Reliance....................................................... 126
14.07 Subordination.................................................. 126
14.08 Waiver......................................................... 126
14.09 Nature of Liability............................................ 127
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Existing Letters of Credit
SCHEDULE IV Undisclosed Liabilities
SCHEDULE V Tax Matters
SCHEDULE VI Real Property
SCHEDULE VII Capitalization
SCHEDULE VIII Subsidiaries
SCHEDULE IX Existing Indebtedness
SCHEDULE X Insurance
SCHEDULE XI Existing Liens
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 A Term Note
EXHIBIT B-2 B Term Note
EXHIBIT B-3 Revolving Note
EXHIBIT B-4 Swingline Note
EXHIBIT C Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Warrant Agreement
EXHIBIT F-1 Opinion of Kronish, Lieb, Wiener & Xxxxxxx LLP, special
counsel to Holdings and its Subsidiaries
EXHIBIT F-2 Opinion of Xxxxxx X. Xxxxxxx, Esq., General Counsel of Holdings
EXHIBIT G Officers' Certificate
EXHIBIT H First Amendment to the Subsidiaries Guaranty
(v)
EXHIBIT I First Amendment to the Pledge Agreement
EXHIBIT J First Amendment to the Security Agreement
EXHIBIT K Consent Letter
EXHIBIT L Intercompany Note
EXHIBIT M Subordination Provisions
EXHIBIT N Assignment and Assumption Agreement
EXHIBIT O Solvency Certificate
(vi)
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 31, 1991,
and amended and restated as of October 30, 1992, and amended and restated as of
June 4, 1993, and amended and restated as of April 28, 1994, and further amended
and restated as of January 26, 1996, among AUTOTOTE CORPORATION, a Delaware
corporation ("Holdings"), AUTOTOTE SYSTEMS, INC., a Delaware corporation (the
"Borrower"), the Banks party hereto from time to time, and BANKERS TRUST
COMPANY, as Agent (all capitalized terms used herein and defined in Section 11
are used herein as therein defined).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Holdings, the Borrower, the Agent and the Banks are parties
to a Credit Agreement, dated as of October 31, 1991, and amended and restated as
of October 30, 1992, and amended and restated as of June 4, 1993, and further
amended and restated as of April 28, 1994, and as the same has been further
amended, modified and supplemented through the Restatement Effective Date (the
"Original Credit Agreement"); and
WHEREAS, subject to and upon the terms and conditions set forth
herein, the Banks are willing to amend and restate the Original Credit Agreement
in the form of this Agreement and make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
--------------------------
1.01 The Commitments.
---------------
(a) Subject to and upon the terms and conditions set forth herein,
each Bank severally agrees:
(A) that, on the Restatement Effective Date, each Bank's pro rata
--- ----
share of $50,000,000 of Original Revolving A Loans made by such Bank and,
in the case of BTCo, $5,000,000 of Original Revolving B Loans made by BTCo,
in each case to the Borrower pursuant to the Original Credit Agreement and
outstanding on the
Restatement Effective Date shall constitute a Borrowing of term loans
hereunder to the Borrower (as so constituted, the "A Term Loans", and each
an "A Term Loan") in an aggregate principal amount for each such Bank as is
equal to that amount set forth opposite such Bank's name on Schedule I
directly below the column entitled "A Term Loans", provided, that all A
--------
Term Loans made by all Banks pursuant to the same Borrowing shall, unless
otherwise specifically provided herein, consist entirely of A Term Loans of
the same Type. Once repaid, A Term Loans may not be reborrowed.
(B) that, on the Restatement Effective Date, the balance of the
Original Revolving B Loans made by BTCo to the Borrower pursuant to the
Original Credit Agreement and outstanding on the Restatement Effective Date
(i.e., those Original Revolving B Loans that have not been constituted as A
Term Loans pursuant to clause (A) above) shall constitute a Borrowing of
term loans hereunder (as so constituted, the "B Term Loans", and each a "B
Term Loan") in an aggregate principal amount for BTCo as is equal to that
amount set forth opposite BTCo's name on Schedule I directly below the
column entitled "B Term Loans", provided, that all B Term Loans made by all
--------
Banks pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of B Term Loans of the same Type. Once
repaid, B Term Loans may not be reborrowed.
(C) (x) that, on the Restatement Effective Date, the balance of the
Original Revolving A Loans made by such Bank to the Borrower pursuant to
the Original Credit Agreement and outstanding on the Restatement Effective
Date (i.e., those Original Revolving A Loans that have not been constituted
----
as A Term Loans pursuant to clause (A) above) shall constitute a Borrowing
of revolving loans hereunder to the Borrower (as so constituted, together
with any revolving loans made on or after the Restatement Effective Date
pursuant to clause (y) below, the "Revolving Loans", and each a "Revolving
Loan"), and (y) to make on and after the Restatement Effective Date and
prior to the Final Maturity Date (but after giving effect to the Revolving
Loans described in the preceding clause (x)) additional Revolving Loans to
the Borrower, all of which Revolving Loans pursuant to this clause (C):
(i) shall, at the option of the Borrower, be Base Rate Loans
or Eurodollar Loans, provided that, except as otherwise specifically
--------
provided in Section 1.10(b), all Revolving Loans comprising the same
Borrowing shall at all times be of the same Type;
(ii) may be repaid and reborrowed in accordance with the
provisions hereof;
-2-
(iii) shall not exceed for any Bank at any time outstanding
that aggregate principal amount which, when added to the product of
(x) such Bank's Adjusted Percentage and (y) the sum of (I) the
aggregate amount of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (II) the aggregate principal amount
of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) then outstanding, equals the
Revolving Loan Commitment of such Bank at such time; and
(iv) shall not exceed for all Banks at any time outstanding
that aggregate principal amount which, when added to (x) the amount of
all Letter of Credit Outstandings (exclusive of Unpaid Drawings which
are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such
time and (y) the aggregate principal amount of all Swingline Loans
(exclusive of Swingline Loans which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence
of Revolving Loans) then outstanding, equals the Total Revolving Loan
Commitment at such time.
(b) Subject to and upon the terms and conditions set forth herein,
BTCo in its individual capacity agrees to make at any time and from time to time
after the Restatement Effective Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each a "Swingline Loan" and, collectively,
the "Swingline Loans") to the Borrower, which Swingline Loans:
(i) shall be made and maintained as Base Rate Loans;
(ii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iii) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the aggregate principal amount of all
Revolving Loans made by Non-Defaulting Banks then outstanding and the
Letter of Credit Outstandings at such time, an amount equal to the Adjusted
Total Revolving Loan Commitment at such time (after giving effect to any
reductions to the Adjusted Total Revolving Loan Commitment on such date);
and
(iv) shall not exceed at any time outstanding the Maximum
Swingline Amount.
-3-
(c) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks with Revolving Loan Commitments that its outstanding
Swingline Loans shall be funded with a Borrowing of Revolving Loans (provided
--------
that such notice shall be deemed to have been automatically given upon the
occurrence of a Default or an Event of Default under Section 10.05 or upon the
exercise of any of the remedies provided in the last paragraph of Section 10),
in which case a Borrowing of Revolving Loans constituting Base Rate Loans (each
such Borrowing, a "Mandatory Borrowing") shall be made on the immediately
succeeding Business Day by all such Banks pro rata based on each such Bank's
--- ----
Adjusted Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10) and the
proceeds thereof shall be applied directly to BTCo to repay BTCo for such
outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by BTCo notwithstanding (i) the amount of
the Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Section 6
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the date of such Mandatory Borrowing and (v) the amount of the Total
Revolving Loan Commitment or the Adjusted Total Revolving Loan Commitment at
such time. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower), then each such Bank hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) from BTCo such participations in the
outstanding Swingline Loans as shall be necessary to cause such Banks to share
in such Swingline Loans ratably based upon their respective Adjusted Percentages
(determined before giving effect to any termination of the Revolving Loan
Commitments pursuant to the last paragraph of Section 10); provided, that (x)
--------
all interest payable on the Swingline Loans shall be for the account of BTCo
until the date as of which the respective participation is required to be
purchased and, to the extent attributable to the purchased participation, shall
be payable to the participant from and after such date and (y) at the time any
purchase of participations pursuant to this sentence is actually made, the
purchasing Bank shall be required to pay BTCo interest on the principal amount
of participation purchased for each day from and including the day upon which
the Mandatory Borrowing would otherwise have occurred to but excluding the date
of payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal
--------------------------------
amount of each Borrowing of Loans shall be not less than the Minimum Borrowing
Amount
-4-
applicable thereto. More than one Borrowing may occur on the same date, but at
no time shall there be outstanding more than five Borrowings of Eurodollar
Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
-------------------
incur Revolving Loans hereunder (excluding Revolving Loans incurred pursuant to
clause (x) of Section 1.01(a)(C) and Revolving Loans incurred pursuant to a
Mandatory Borrowing), an Authorized Representative of the Borrower shall give
the Agent at its Notice Office at least one Business Day's prior written notice
(or telephonic notice promptly confirmed in writing) of each Base Rate Loan and
at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each Eurodollar Loan to be made hereunder;
provided, that any such notice shall be deemed to have been given on a certain
--------
day only if given before (i) in the case of Eurodollar Loans, 11:00 A.M. (New
York time) on such day or (ii) in the case of Base Rate Loans, 12:00 Noon (New
York time) on such day. Each such written notice or written confirmation of
telephonic notice (each a "Notice of Borrowing"), except as otherwise expressly
provided in Section 1.10, shall be irrevocable and shall be given by such
Authorized Representative in the form of Exhibit A, appropriately completed to
specify the aggregate principal amount of the Revolving Loans to be made
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day), and whether the Revolving Loans being incurred pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or Eurodollar Loans
and, if Eurodollar Loans, the initial Interest Period to be applicable thereto.
The Agent shall promptly give each Bank with a Revolving Loan Commitment notice
of each such proposed Borrowing, of such Bank's proportionate share thereof and
of the other matters required by the immediately preceding sentence to be
specified in the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to incur Swingline Loans
hereunder, an Authorized Representative of the Borrower shall give BTCo not
later than 12:00 Noon (New York time) on the date that a Swingline Loan is to be
made, written notice or telephonic notice promptly confirmed in writing of each
Swingline Loan to be made hereunder. Each such notice shall be irrevocable and
specify in each case (A) the date of Borrowing (which shall be a Business Day)
and (B) the aggregate principal amount of the Swingline Loans to be incurred
pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any Borrowing of Loans, the Agent or
BTCo, as the case may be, may act without liability upon the basis of telephonic
notice of such Borrowing, believed by the Agent or BTCo, as the case may be, in
good faith to be from an Authorized Representative of the Borrower prior to
receipt of written confirmation.
-5-
1.04 Disbursement of Funds. Not later than 12:00 Noon (New York
---------------------
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, not later than 2:00 P.M. (New York time) on the date specified
pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not
later than 12:00 Noon (New York time) on the date specified in Section 1.01(c)),
each Bank with a Revolving Loan Commitment will make available its pro rata
--- ----
portion of each such Borrowing requested to be made on such date (or in the case
of Swingline Loans, BTCo shall make available the full amount thereof). All such
amounts shall be made available in Dollars and in immediately available funds at
the Payment Office of the Agent, and the Agent will make available to the
Borrower at the Payment Office the aggregate of the amounts so made available by
the Banks (prior to 1:00 P.M. on such day, to the extent of funds actually
received by the Agent prior to 12:00 Noon on such day). Unless the Agent shall
have been notified by any Bank prior to the date of Borrowing that such Bank
does not intend to make available to the Agent such Bank's portion of any
Borrowing to be made on such date, the Agent may assume that such Bank has made
such amount available to the Agent on such date of Borrowing and the Agent may
(but shall not be obligated to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Agent by such Bank, the Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent shall promptly notify the Borrower and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrower until
the date such corresponding amount is recovered by the Agent, at a rate per
annum equal to (i) if recovered from such Bank, at the overnight Federal Funds
Rate and (ii) if recovered from the Borrower, the rate of interest applicable to
the respective Borrowing, as determined pursuant to Section 1.08. Nothing in
this Section 1.04 shall be deemed to relieve any Bank from its obligation to
make Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
-----
and interest on, the Loans made by each Bank shall be evidenced (i) if A Term
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each an "A Term Note" and, collectively, the "A Term
Notes"), (ii) if B Term Loans, by a promissory note duly executed and delivered
by the Borrower substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (each a "B Term Note" and,
collectively, the "B Term Notes"), (iii) if Revolving Loans, by a promissory
note duly executed and delivered by the Borrower substantially in the form of
Exhibit B-3, with blanks appropriately completed in conformity herewith (each a
"Revolving Note" and,
-6-
collectively, the "Revolving Notes") and (iv) if Swingline Loans, by a
promissory note duly executed and delivered by the Borrower substantially in the
form of Exhibit B-4, with blanks appropriately completed in conformity herewith
(the "Swingline Note").
(b) The A Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the outstanding A
Term Loans of such Bank on the Restatement Effective Date (and after giving
effect thereto) and be payable in the principal amount of the outstanding A Term
Loans evidenced thereby from time to time, (iv) mature on the A Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(c) The B Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the outstanding B
Term Loans of such Bank on the Restatement Effective Date (and after giving
effect thereto) and be payable in the principal amount of the outstanding B Term
Loans evidenced thereby from time to time, (iv) mature on the B Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(d) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to the order of such Bank and be dated the
Restatement Effective Date, (iii) be in a stated principal amount equal to the
Revolving Loan Commitment of such Bank and be payable in the principal amount of
the outstanding Revolving Loans evidenced thereby from time to time, (iv) mature
on the Final Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment
as provided in Section 4.01, and mandatory repayment as provided in Section
4.02, and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(e) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the Maximum
Swingline Amount and be payable in the principal amount of the outstanding
Swingline Loans evidenced thereby from time to time, (iv) mature on the
Swingline Expiry Date, (v) bear interest as provided in the
-7-
appropriate clause of Section 1.08 in respect of the Base Rate Loans evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01,
and mandatory repayment as provided in Section 4.02, and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(f) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation or endorsement shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
-----------
any Business Day occurring after the Restatement Effective Date, all or a
portion equal to at least the applicable Minimum Borrowing Amount of the
outstanding principal amount of the Loans made pursuant to one or more
Borrowings (so long as of the same Tranche) of one or more Types of Loans into a
Borrowing (of the same Tranche) of another Type of Loan; provided, that (i)
--------
except as otherwise provided in Section 1.10(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion, (iii) no conversion pursuant to this Section 1.06 shall
result in a greater number of Borrowings of Eurodollar Loans than is permitted
under Section 1.02 and (iv) Swingline Loans may not be converted pursuant to
this Section 1.06. Each such conversion shall be effected by an Authorized
Representative of the Borrower giving the Agent at its Notice Office prior to
11:00 A.M. (New York time) at least three Business Days' prior notice (each a
"Notice of Conversion") specifying the Loans to be so converted, the
Borrowing(s) pursuant to which such Revolving Loans were made and, if to be
converted into Eurodollar Loans, the Interest Period to be initially applicable
thereto. The Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans. Upon any such conversion the proceeds
thereof will be deemed to be applied directly on the day of such conversion to
prepay the outstanding principal amount of the Loans of the respective Tranche
being converted.
1.07 Pro Rata Borrowings. All Borrowings of Loans (other than
-------------------
Swingline Loans) under this Agreement shall be incurred from the Banks pro rata
--- ----
on the basis of their outstanding A Term Loans, B Term Loans or Revolving Loan
Commitments, as the case may be; provided, that all Borrowings of Revolving
--------
Loans made pursuant to a Mandatory Borrowing shall be incurred from the Banks
with Revolving Loan Commitments pro rata on the basis of their Adjusted
--- ----
Percentages. It is understood that no Bank shall be responsible for any default
by any other Bank of its obligation to make Loans hereunder
-8-
and that each Bank shall be obligated to make the Loans provided to be made by
it hereunder, regardless of the failure of any other Bank to make its Loans
hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect
--------
of the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Base Rate Loan and (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06,
at a rate per annum which shall be equal to the sum of the Applicable Margin
plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10,
as applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) 2% per annum in excess of the rate otherwise applicable to Base Rate Loans
of the respective Tranche from time to time and (y) the rate which is 2% in
excess of the rate then borne by such Loans, in each case with such interest to
be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, (x) quarterly in arrears on each Quarterly
Payment Date and (y) on the date of any repayment thereof (on the amount repaid)
required pursuant to Section 4.02(a), (ii) in respect of each Eurodollar Loan,
(x) on the last day of each Interest Period applicable thereto and, in the case
of an Interest Period in excess of three months, on each date occurring at three
month intervals after the first day of such Interest Period and (y) on the date
of any repayment or prepayment thereof (on the amount repaid or prepaid), and
(iii) in respect of each Loan, at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand. Interest which accrued under the
Original Credit Agreement prior to the Restatement Effective Date but which
remains unpaid on such date (and which was not required to be paid on or prior
to such date in accordance with the terms of the Original Credit Agreement)
shall be payable at the times otherwise provided above (but calculated at the
respective rates provided in the Original Credit Agreement for periods occurring
prior to the Restatement Effective Date) for the interest involved.
(e) Upon each Interest Determination Date, the Agent shall determine
the Eurodollar Rate for each Interest Period applicable to Eurodollar Loans and
shall promptly
-9-
notify the Borrower and the Banks thereof. Each such determination shall, absent
manifest error, be final and conclusive and binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing
----------------
or Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Loan (in the case of any subsequent Interest
Period), the Borrower shall have the right to elect, by having an Authorized
Representative of the Borrower give the Agent notice thereof, the interest
period (each an "Interest Period") to be applicable to such Eurodollar Loan,
which Interest Period shall, at the option of the Borrower, be a one, two, three
or six-month period; provided, that:
--------
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Base Rate Loan) and each Interest
Period occurring thereafter in respect of such Eurodollar Loan shall
commence on the day on which the next preceding Interest Period applicable
thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period for any Eurodollar Loan would otherwise
expire on a day which is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day, provided, however, that if any
-------- -------
Interest Period for a Eurodollar Loan would otherwise expire on a day which
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
next preceding Business Day;
(v) no Interest Period may be selected at any time when a Default or
an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche of
Term Loans shall be selected which extends beyond any date upon which a
mandatory repayment of such Tranche of Term Loans will be required to be
made under the applicable clause of Section 4.02(b) if the aggregate
principal amount of such Tranche of Term Loans which have Interest Periods
which will expire after
-10-
such date will be in excess of the aggregate principal amount of such
Tranche of Term Loans then outstanding less the aggregate amount of such
required repayment; and
(vii) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be selected which extends beyond the respective Maturity Date
for such Tranche of Loans.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
---------------------------------
Bank shall have determined in good faith (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto but,
with respect to clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the Restatement Effective Date affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the Restatement
Effective Date in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or in
the interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, order, guideline or
request, such as, for example, but not limited to: (A) a change in the
basis of taxation of payment to such Bank of the principal of or interest
on such Eurodollar Loan or any other amounts payable hereunder (except for
changes in the rate of tax on, or determined by reference to, the net
income or profits of such Bank pursuant to the laws of the jurisdiction in
which it is organized or in which its principal office or applicable
lending office is located or any subdivision thereof or therein) or (B) a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate and/or (y) other circumstances since the
Restatement Effective Date affecting such Bank or the interbank Eurodollar
market or the position of such Bank in such market; or
-11-
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by such Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the Restatement
Effective Date which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (by telephone confirmed in writing) to the
Borrower and, except in the case of clause (i) above, to the Agent of such
determination (which notice the Agent shall promptly transmit to each of the
other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar Loans
shall no longer be available until such time as the Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrower, (y)
in the case of clause (ii) above, the Borrower shall pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing the basis for the calculation thereof, submitted to the Borrower
by such Bank in good faith shall, absent manifest error, be final and conclusive
and binding on all the parties hereto) and (z) in the case of clause (iii)
above, the Borrower shall take one of the actions specified in Section 1.10(b)
as promptly as possible and, in any event, within the time period required by
law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel the respective
Borrowing by giving the Agent telephonic notice (confirmed in writing) on the
same date that the Borrower was notified by the affected Bank or the Agent
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan
is then outstanding, upon at least three Business Days' written notice to the
Agent, require the affected Bank to convert such Eurodollar Loan into a Base
Rate Loan; provided, that if more than one Bank is affected at any time, then
--------
all affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If at any time after the Restatement Effective Date any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law)
-12-
concerning capital adequacy, or any change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency, will
have the effect of increasing the amount of capital required or expected to be
maintained by such Bank or any corporation controlling such Bank based on the
existence of such Bank's commitments or obligations hereunder, then the Borrower
shall pay to such Bank, upon its written demand therefor, such additional
amounts as shall be required to compensate such Bank or such other corporation
for the increased cost to such Bank or such other corporation or the reduction
in the rate of return to such Bank or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable; provided, that such Bank's reasonable good faith
--------
determination of compensation owing under this Section 1.10(c) shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
Each Bank, upon determining that any additional amounts will be pay able
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show the basis for calculation of such additional
amounts.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
------------
written request (which request shall (x) set forth the basis for requesting such
compensation and (y) absent manifest error, be final and conclusive and binding
upon all the parties hereto), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding any loss of
anticipated profit) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Agent) a Borrowing of, or conversion from
or into, Eurodollar Loans does not occur on a date specified therefor in a
Notice of Borrowing or Notice of Conversion (whether or not withdrawn by the
Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment
(including any repayment made pursuant to Section 4.01 or 4.02 or a result of an
acceleration of the Loans pursuant to Section 10) or conversion of any of its
Eurodollar Loans occurs on a date which is not the last day of an Interest
Period with respect thereto; (iii) if any prepayment of any of its Eurodollar
Loans is not made on any date specified in a notice of prepayment given by the
Borrower; or (iv) as a consequence of (x) any other default by the Borrower to
repay its Loans when required by the terms of this Agreement or any Note held by
such Bank or (y) any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another lending office
for any Loans or Letters of Credit affected by such event; provided, that such
--------
designation is made on such terms that such Bank and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
-13-
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the right of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (a) If any Bank (x) becomes a Defaulting
--------------------
Bank or (y) refuses to consent to certain proposed changes, waivers, discharges
or terminations with respect to this Agreement which have been approved by the
Required Banks as provided in Section 13.12(b), the Borrower shall have the
right in accordance with the requirements of Section 13.04(b), if no Default or
Event of Default will exist immediately after giving effect to such replacement,
to replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Bank at
the time of such replacement (collectively, the "Replacement Bank") and each of
whom shall be required to be acceptable to the Agent and each Issuing Bank;
provided, that:
--------
(i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant
to said Section 13.04(b) to be paid by the Replacement Bank) pursuant to
which the Replacement Bank shall acquire the entire Revolving Loan
Commitment and all outstanding Loans of, and in each case participations in
Letters of Credit by, the Replaced Bank and, in connection therewith, shall
pay to (x) the Replaced Bank in respect thereof an amount equal to the sum
of (A) an amount equal to the principal of, and all accrued interest on,
all outstanding Loans of the Replaced Bank, (B) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect thereto
at such time and (C) an amount equal to all accrued, but theretofore
unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01, (y) each
Issuing Bank an amount equal to such Replaced Bank's Adjusted Percentage
(for this purpose, determined as if the adjustment described in clause (ii)
of Section 1.13(b) had been made with respect to such Replaced Bank) of any
Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent
such amount was not theretofore funded by such Replaced Bank and (z) BTCo
an amount equal to such Replaced Bank's Adjusted Percentage (for this
purpose, determined as if the adjustment described in clause (ii) of
Section 1.13(b) had been made with such Replaced Bank) of any Mandatory
Borrowing to the extent such amount was not theretofore funded by such
Replaced Bank; and
(ii) all obligations of the Borrower owing to the Replaced Bank
(including all obligations, if any, owing pursuant to Section 1.11, but
excluding those specifically described in clause (i) above in respect of
which the assignment
-14-
purchase price has been, or is concurrently being, paid) shall be paid in
full to such Replaced Bank concurrently with such replacement.
(b) Upon the execution of the respective Assignment and Assumption
Agreements referred to in the immediately preceding clause (a), the payment of
the amounts referred to in the immediately preceding clauses (a)(i) and (a)(ii)
and, if so requested by the Replacement Bank, delivery to the Replacement Bank
of the appropriate Note or Notes executed by the Borrower, (i) the Replacement
Bank shall become a Bank hereunder and the Replaced Bank shall cease to
constitute a Bank hereunder, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 13.01 and 13.06), which shall survive as to such Replaced Bank, and (ii)
in the case of a replacement of a Defaulting Bank, the Adjusted Percentages of
the Banks shall be automatically adjusted at such time to give effect to such
replacement (and to give effect to the replacement of a Defaulting Bank with one
or more Non-Defaulting Banks).
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions set forth herein, the Borrower may request that any Issuing Bank
issue, at any time and from time to time on and after the Restatement Effective
Date and prior to the Final Maturity Date, (x) for the account of the Borrower
and for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Indebtedness of the
Borrower or any other Subsidiaries of Holdings, an irrevocable standby letter of
credit, in a form customarily used by such Issuing Bank or in such other form as
has been approved by such Issuing Bank (each such standby letter of credit, a
"Standby Letter of Credit") in support of such L/C Supportable Indebtedness and
(y) for the account of the Borrower and for the benefit of sellers of goods to
the Borrower or any other Subsidiaries of Holdings, an irrevocable sight
commercial letter of credit in a form customarily used by such Issuing Bank or
in such other form as has been approved by such Issuing Bank (each such
commercial letter of credit, a "Trade Letter of Credit", and each such Trade
Letter of Credit and Standby Letter of Credit, a "Letter of Credit") in support
of commercial transactions of the Borrower or any such other Subsidiary of
Holdings. It is hereby acknowledged and agreed that each of the letters of
credit which were issued by the respective Issuing Banks under the Original
Credit Agreement and which remain outstanding on the Restatement Effective Date
(the "Existing Letters of Credit") shall constitute a Letter of Credit for all
purposes of this Agreement and shall be deemed issued on the Restatement
Effective Date. Each Existing Letter of Credit and the Stated Amount and the
expiry date thereof and the beneficiary thereunder is set forth on Schedule III.
(b) Letters of Credit may be issued at the request of the Borrower in
Dollars, Deutsche Marks, French Francs, Canadian Dollars, Dutch Guilders,
British
-00-
Xxxxxx Xxxxxxxx, Xxxxxxxx Xxx, Xxxx Xxxx Dollars, Korean Won or Mexican Pesos
and in any other currencies which are acceptable to the Agent and such Issuing
Bank.
(c) Each Issuing Bank may agree, in its sole discretion, and BTCo
hereby agrees, that in the event a requested Letter of Credit is not issued by
one of the other Issuing Banks, it will (subject to the terms and conditions
contained herein), at any time and from time to time on or after the Restatement
Effective Date and prior to the Final Maturity Date (or the 30th day prior to
the Final Maturity Date in the case of Trade Letters of Credit), following its
receipt of the respective Letter of Credit Request, issue for the account of the
Borrower one or more Letters of Credit (x) in the case of Standby Letters of
Credit, in support of such L/C Supportable Indebtedness of the Borrower or any
other Subsidiaries of Holdings as is permitted to remain outstanding without
giving rise to a Default or an Event of Default and (y) in the case of Trade
Letters of Credit, in support of sellers of goods as referenced in Section
2.01(a); provided, that the respective Issuing Bank (including BTCo) shall be
--------
under no obligation to issue any Letter of Credit of the types described above
if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over such Issuing Bank shall prohibit, or request that such Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which such Issuing Bank is not otherwise compensated) not in effect on
the Restatement Effective Date, or any unreimbursed loss, cost or expense
which was not applicable, in effect or known to such Issuing Bank as of the
Restatement Effective Date and which such Issuing Bank in good xxxxx xxxxx
material to it; or
(ii) such Issuing Bank shall have received notice from the Required
Banks prior to the issuance of such Letter of Credit of the type described
in the penultimate sentence of Section 2.03(b).
(d) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $25,000,000 or (y) when added to the aggregate principal
amount of all Revolving Loans made by Non-Defaulting Banks and then outstanding
and Swingline Loans then outstanding, an amount equal to the Adjusted Total
Revolving Loan Commitment at such time, (ii) each Standby Letter of
-16-
Credit shall by its terms terminate on or before the earlier of (x) the date
which occurs 12 months after the date of issuance thereof (although any such
Standby Letter of Credit may be extendable for successive periods of up to 12
months, but, except as provided in Section 2.01(e), not beyond the Final
Maturity Date) on terms acceptable to the Issuing Bank thereof) and (y) except
as provided in Section 2.01(e), the Final Maturity Date and (iii) each Trade
Letter of Credit shall by its terms terminate on or before the earlier of (x)
the date which occurs 180 days after the date of issuance thereof and (y) the
date which occurs 30 days prior to the Final Maturity Date.
(e) Any Standby Letter of Credit may have a termination date which
occurs after the Final Maturity Date but not beyond the date which is six months
after the Final Maturity Date. In connection with any such Standby Letter of
Credit, at least three Business Days' prior to the Final Maturity Date, the
Borrower shall have either (x) paid to the Agent at the Payment Office an amount
of cash equal to the sum of (1) the Stated Amount of such Standby Letter of
Credit plus (2) the amount of all Letter of Credit Fees and Facing Fees that
will accrue thereon through and including the termination date of such Standby
Letter of Credit, such cash to be held as security for all obligations of the
Borrower in respect of such Standby Letter of Credit in a cash collateral
account to be established by the Agent or (y) caused a back-up letter of credit
to be issued by a commercial bank that is reasonably satisfactory to the Agent
and the respective Issuing Bank having a long-term unsecured debt rating of at
least A or the equivalent thereof by S&P or at least A2 or the equivalent
thereof by Xxxxx'x, with such back-up letter of credit to be in form and
substance satisfactory to the Agent and the respective Issuing Bank and in an
amount equal to the amounts referred to in the immediately preceding clause (x).
2.02 Minimum Stated Amount. The initial Stated Amount of each Letter
---------------------
of Credit shall not be less than $100,000, or such lesser amount as is
acceptable to the respective Issuing Bank.
2.03 Letter of Credit Requests. (a) Whenever the Borrower desires
-------------------------
that a Letter of Credit be issued for its account, an Authorized Representative
of the Borrower shall give the Agent and the respective Issuing Bank at least
five Business Days' (or such shorter period as is acceptable to the respective
Issuing Bank) written notice thereof. Each notice shall be in the form of
Exhibit C (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(d). Unless the respective Issuing Bank has received notice from the
Required Banks before it issues a Letter of Credit that one or more of the
conditions specified in Section 5 or Section 6 are not then satisfied, or that
the issuance of such Letter of Credit would violate Section 2.01(d), then such
Issuing Bank shall issue the requested Letter of Credit for the account
-17-
of the Borrower in accordance with such Issuing Bank's usual and customary
practices. Upon its issuance of, or any amendment to, any Standby Letter of
Credit, such Issuing Bank shall promptly notify the Agent and each Bank of such
issuance or amendment, which notice shall be accompanied by a copy of the Letter
of Credit actually issued or the amendment actually effected.
2.04 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by any Issuing Bank of any Letter of Credit, such Issuing Bank shall be
deemed to have sold and transferred to each other Bank with a Revolving Loan
Commitment (each such Bank, in its capacity under this Section 2.04, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's Adjusted Percentage in such Letter of Credit, each drawing
made thereunder and the obligations of the Borrower under this Agreement with
respect thereto, and any security therefor or guaranty pertaining thereto. Upon
any change in the Revolving Loan Commitments or Adjusted Percentages of the
Banks pursuant to Section 1.13 or 13.04 or as a result of a Bank Default, it is
hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Adjusted Percentages of the assignor and
assignee Bank or of all Banks, as the case may be.
(b) In determining whether to pay under any Letter of Credit, such
Issuing Bank shall have no obligation relative to the other Banks other than to
confirm that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by any Issuing Bank under or in connection with any Letter of Credit, if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for such Issuing Bank any resulting liability to the Borrower, any
other Credit Party or any Bank.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to such Issuing Bank pursuant to Section 2.05(a), such Issuing Bank shall
promptly notify the Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to such
Issuing Bank the amount of such Participant's Adjusted Percentage of such
unreimbursed payment in Dollars (or, in the case of any unreimbursed payment
made pursuant to Section 2.05(a) in a currency other than Dollars, of the Dollar
Equivalent of such unreimbursed payment, as determined by BTCo on the date on
which such unreimbursed payment was made by such Issuing Bank) and in same day
funds. If the Agent so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to such Issuing Bank in Dollars
(or, in the case of any unreimbursed payment
-18-
made in a currency other than Dollars of the Dollar Equivalent thereof) such
Participant's Adjusted Percentage of the amount of such payment on such Business
Day and in same day funds. If and to the extent such Participant shall not have
so made its Adjusted Percentage of the amount of such payment available to such
Issuing Bank, such Participant agrees to pay to such Issuing Bank, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to such Issuing Bank at the overnight Federal
Funds Rate for the first three days and at the rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter.
The failure of any Participant to make available to such Issuing Bank its
Adjusted Percentage of any payment under any Letter of Credit shall not relieve
any other Participant of its obligation hereunder to make available to such
Issuing Bank its Adjusted Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to such Issuing Bank such
other Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall pay to each Participant
which has paid its Adjusted Percentage thereof, in Dollars (or, in the case of
any payment received in a currency other than Dollars, of the Dollar Equivalent
thereof) and in same day funds, an amount equal to such Participant's share
(based upon the proportionate aggregate amount originally funded by such
Participant to the aggregate amount funded by all Participants) of the principal
amount of such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.
(e) Upon the request of any Participant, each Issuing Bank shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to each
Issuing Bank with respect to Letters of Credit issued by it shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
Holdings or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Participant, or any
-19-
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including any underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Agent for the account of such Issuing Bank in Dollars (or, in the case of any
payment or disbursement made by such Issuing Bank in a currency other than
Dollars, of the Dollar Equivalent of such payment or disbursement as determined
by BTCo on the date of such payment or disbursement) and in immediately
available funds at the Payment Office, for any payment or disbursement made by
it under any Letter of Credit (each such amount, or the Dollar Equivalent
thereof as determined by BTCo on the date of payment or disbursement, so paid
until reimbursed, an "Unpaid Drawing"), immediately after, and in any event on
the date of, the date of such payment or disbursement, with interest on the
amount so paid or disbursed by such Issuing Bank, to the extent not reimbursed
prior to 12:00 Noon (New York time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but excluding the date such
Issuing Bank was reimbursed by the Borrower therefor at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Margin
for Revolving Loans that are maintained as Base Rate Loans; provided, however,
-------- -------
to the extent such amounts are not reimbursed prior to 12:00 Noon (New York
time) on the third Business Day following such payment or disbursement,
interest shall thereafter accrue on the amounts so paid or disbursed by such
Issuing Bank (and until reimbursed by the Borrower) at a rate per annum which
shall be the Base Rate in effect from time to time plus the Applicable Margin
for Revolving Loans that are maintained as Base Rate Loans plus 2%, in each such
case, with interest to be payable on demand. The respective Issuing Bank shall
give the Borrower prompt notice of each Drawing under any Letter of Credit;
provided, that the failure to give any such notice shall in no way affect,
--------
impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the respective Issuing Bank with respect to payments or disbursements
on Letters of Credit
-20-
(each, a "Drawing") (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Borrower may have or
have had against any Bank (including in its capacity as issuer of the Letter of
Credit or as Participant), or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing, the respective Issuing Bank's only
obligation to the Borrower being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for such Issuing Bank
any resulting liability to the Borrower or any other Credit Party.
2.06 Increased Costs. If at any time after the Restatement Effective
---------------
Date, the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by any governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law), or
any change in generally accepted accounting principles, shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by any Issuing Bank or participated
in by any Participant, or (ii) impose on any Issuing Bank or any Participant any
other conditions relating, directly or indirectly, to this Agreement or any
Letter of Credit; and the result of any of the foregoing is to increase the cost
to any Issuing Bank or any Participant of issuing, maintaining or participating
in any Letter of Credit, or reduce the amount of any sum received or receivable
by any Issuing Bank or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of such Issuing
Bank or such Participant pursuant to the laws of the United States of America,
the jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, upon demand to the Borrower by such Issuing Bank or any Participant (a
copy of which demand shall be sent by such Issuing Bank or such Participant to
the Agent), the Borrower shall pay to such Issuing Bank or such Participant such
additional amount or amounts as will compensate such Bank for such increased
cost or reduction in the amount receivable or reduction on the rate of return on
its capital. Any Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.06, will give
prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by such Issuing Bank or such Participant
(a copy of which certificate shall be sent by such Issuing Bank or such
Participant to the Agent), setting forth in reasonable detail the basis for the
calculation of such additional amount or amounts necessary to compensate such
Issuing Bank or such Participant. The certificate required to be delivered
pursuant to this Section 2.06 shall, if
-21-
delivered in good faith and absent manifest error, be final and conclusive and
binding on the Borrower.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
-----------------------------------------------------
3.01 Fees. (a) The Borrower agrees to pay to the Agent for
----
distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Commitment Commission") for the period from the
Restatement Effective Date to and including the Final Maturity Date (or such
earlier date as the Total Revolving Loan Commitment shall have been terminated),
computed at a rate for each day equal to the Applicable Commitment Commission
Percentage on the daily average Unutilized Revolving Loan Commitment of such
Non-Defaulting Bank. Accrued Commitment Commission shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the Final Maturity
Date or such earlier date upon which the Total Revolving Loan Commitment is
terminated.
(b) The Borrower agrees to pay to the Agent for distribution to each
Non-Defaulting Bank with a Revolving Loan Commitment (based on their respective
Adjusted Percentages) a fee in respect of each Letter of Credit issued hereunder
(the "Letter of Credit Fee"), for the period from and including the date of
issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate per annum equal to the Applicable L/C
Percentage of the daily Stated Amount of such Letter of Credit. Accrued Letter
of Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day on or after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the respective Issuing Bank, for
its own account, a facing fee in respect of each Letter of Credit issued for its
account hereunder (the "Facing Fee"), for the period from and including the date
of issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate equal to 1/8 of 1% per annum of the daily
Stated Amount of such Letter of Credit, provided, that in any event the minimum
amount of the Facing Fee payable in any 12 month period for each Letter of
Credit shall be $500; it being agreed that, on the date of issuance of any
Letter of Credit and on each anniversary thereof prior to the termination of
such Letter of Credit, if $500 will exceed the amount of Facing Fees that will
accrue with respect to such Letter of Credit for the immediately succeeding 12
month period, the full $500 shall be payable on the date of issuance of such
Letter of Credit and on each such anniversary thereof prior to the termination
of such Letter of Credit. Except as otherwise provided in the proviso to the
immediately preceding sentence, accrued Facing Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the date upon which
the Total Revolving Loan Commitment has been terminated and such Letter of
Credit has been terminated in accordance with its terms.
-22-
(d) The Borrower agrees to pay, upon each drawing under, issuance of,
or amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge which the respective Issuing Bank is
generally imposing in connection with such occurrence with respect to letters of
credit.
(e) Holdings and the Borrower hereby agree to pay to the Agent for
distribution to the Banks (and their respective successors and assigns) a fee in
the amount of $1,350,000, which fee shall be due and payable on the earliest of
(i) the date, if any, that the maturity of the Loans is accelerated in
accordance with the provisions of Section 10, (ii) June 30, 1996 and (iii) the
date upon which Holdings or any of its Subsidiaries receives cash proceeds from
the sale of assets and/or the issuance of equity since the effective date of the
July 1995 Agreement in an aggregate amount equal to or in excess of $10,000,000
for Holdings and its Subsidiaries on a consolidated basis, and with each Bank to
receive its pro rata share of such fee based on such Bank's revolving loan
--- ----
commitment under the Original Credit Agreement on July 19, 1995. The payment of
such fee shall satisfy Holdings' obligations pursuant to the provisions of
Section III(1)(a) of the Waiver, Consent, Agreement and Fifth Amendment, dated
as of July 19, 1995, to the Original Credit Agreement (the "July 1995
Agreement").
(f) The Borrower agrees to pay to the Agent, for its own account,
such other fees as have been agreed to in writing by the Borrower and the Agent.
(g) Except as otherwise provided in clause (e) of this Section 3.01,
Fees which accrued under the Original Credit Agreement prior to the Restatement
Effective Date but which remain unpaid on such date (and which were not required
to be paid on or prior to such date in accordance with the terms of the Original
Credit Agreement) shall be payable at the times otherwise provided above (but
calculated at the respective rates provided in the Original Credit Agreement for
periods occurring prior to the Restatement Effective Date) for the respective
Fees involved.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
-----------------------------------------------
least two Business Days' prior notice to the Agent at its Notice Office (which
notice the Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, at any time or from time to time, without premium or
penalty, to terminate the Total Unutilized Revolving Loan Commitment, in whole
or in part, in integral multiples of $2,000,000 in the case of partial
reductions to the Total Unutilized Revolving Loan Commitment; provided, that (i)
--------
each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank and (ii) the reduction to the Total
Unutilized Revolving Loan Commitment shall in no case be in an amount which
would cause the Revolving Loan Commitment of any Bank to be reduced (as required
by preceding clause (i)) by an amount which exceeds the remainder of (x) the
Unutilized Revolving Loan Commitment of such Bank as in effect
immediately before giving effect to such reduction
-23-
minus (y) such Bank's Adjusted Percentage of the aggregate principal amount of
Swingline Loans then outstanding.
(b) In the event of certain refusals by a Bank as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrower may, upon five Business Days' written notice to the
Agent at its Notice Office (which notice the Agent shall promptly transmit to
each of the Banks) terminate the Revolving Loan Commitment of such Bank so long
as (A) all Loans, together with accrued and unpaid interest, Fees and all other
amounts, owing to such Bank are repaid concurrently with the effectiveness of
such termination pursuant to Section 4.01(v) (at which time Schedule I shall be
deemed modified to reflect such changed amounts), (B) such Bank's Adjusted
Percentage of any outstanding Letters of Credit are cash collateralized in a
manner satisfactory to the Agent and each Issuing Bank concurrently with the
effectiveness of such termination and (C) the consents required by Sections
4.01(v) and 13.12(b) in connection with the termination pursuant to this Section
3.02(b) have been obtained, and at such time such Bank shall no longer
constitute a "Bank" for purposes of this Agreement, except with respect to
indemnifications under this Agreement (including, without limitation, Sections
1.10, 1.11, 2.06, 4.04, 13.01 and 13.06), which shall survive as to such repaid
Bank.
3.03 Mandatory Reduction of Commitments. The Total Revolving Loan
----------------------------------
Commitment (and the Revolving Loan Commitment of each Bank) shall terminate in
its entirety on the Final Maturity Date.
SECTION 4. Prepayments; Payments; Taxes.
----------------------------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions:
(i) the Borrower shall give the Agent prior to 12:00 Noon (New York
time) at its Notice Office (x) at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of its intent
to prepay Base Rate Loans (or same day notice in the case of Swingline
Loans provided such notice is given prior to 11:00 A.M. (New York time) on
such day) and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollar Loans, whether A Term Loans, B Term Loans, Revolving Loans or
Swingline Loans shall be prepaid, the amount of such prepayment and the
Types of Loans to be prepaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings pursuant to which made, which notice the
Agent shall promptly transmit to each of the Banks;
-24-
(ii) each prepayment shall be in an aggregate principal amount of at
least $500,000 (or $250,000 in the case of Swingline Loans), provided that
--------
if any partial prepayment of Eurodollar Loans made pursuant to any
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto, then such Borrowing may not be continued as a Borrowing
of Eurodollar Loans and any election of an Interest Period with respect
thereto given by the Borrower shall have no force or effect;
(iii) prepayments of Eurodollar Loans made pursuant to this Section
4.01(other than pursuant to clause (v) below) may only be made on the last
day of an Interest Period applicable thereto;
(iv)(A) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans, provided that at the
--- ----
Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01(other than pursuant to clause (v) below),
such prepayment shall not be applied to any Revolving Loan of a Defaulting
Bank,
(B) each prepayment of Term Loans pursuant to this Section
4.01(other than pursuant to clause (v) below) shall be applied to the A
Term Loans and the B Term Loans on a pro rata basis (based on the then
--- ----
outstanding principal amount of the A Term Loans and the B Term Loans), and
(C) each prepayment of any Tranche of Term Loans pursuant to this
Section 4.01 (other than pursuant to clause (v) below) shall reduce the
then remaining Scheduled Repayments of such Tranche of Term Loans on a pro
---
rata basis (based upon the then remaining unpaid principal amount of such
----
Scheduled Repayments of the respective Tranche of Term Loans after giving
effect to all prior reductions thereto); and
(v) in the event of certain refusals by a Bank as provided in
Section 13.12(b) to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Banks, the Borrower may, upon five Business Days'
written notice to the Agent at its Notice Office (which notice the Agent
shall promptly transmit to each of the Banks) repay all Loans, together
with accrued and unpaid interest, Fees, and other amounts owing to such
Bank in accordance with said Section 13.12(b) so long as (A) in the case of
the repayment of Revolving Loans of any Bank pursuant to this clause (v)
the Revolving Loan Commitment of such Bank is terminated concurrently with
such repayment in accordance with Section 3.02(b) (at which time Schedule I
shall be deemed modified to reflect the changed Revolving Loan
Commitments), (B) such Bank's Adjusted Percentage of any outstanding
Letters of
-25-
Credit are cash collateralized in a manner satisfactory to the Agent and
each Issuing Bank concurrently with the effectiveness of such repayment and
(C) unless the Revolving Loan Commitments terminated, and Loans repaid,
pursuant to this clause (v) are immediately replaced in full at such time
through the addition of new Banks or the increase of the Revolving Loan
Commitments and/or outstanding Loans of existing Banks (which in each case
must specifically consent with respect to such increase in respect of
itself), then in the case of any action pursuant to this clause (v) the
Required Banks (determined before giving effect to the proposed action)
shall specifically consent thereto.
4.02 Mandatory Repayments. (a) (i) On any day on which the sum of
--------------------
the aggregate outstanding principal amount of the Revolving Loans made by Non-
Defaulting Banks, Swingline Loans and the Letter of Credit Outstandings exceeds
the Adjusted Total Revolving Loan Commitment as then in effect, the Borrower
shall prepay on such day principal of Swingline Loans and, after the Swingline
Loans have been repaid in full, Revolving Loans of Non-Defaulting Banks in an
amount equal to such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Loans of Non-Defaulting Banks, the
aggregate amount of the Letter of Credit Outstandings exceeds the Adjusted Total
Revolving Loan Commitment as then in effect, the Borrower shall pay to the Agent
at the Payment Office on such date an amount of cash or Cash Equivalents equal
to the amount of such excess (up to a maximum amount equal to the Letter of
Credit Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of the Borrower to Non-Defaulting Banks hereunder
in a cash collateral account to be established by the Agent.
(ii) On any day on which the aggregate outstanding principal amount
of the Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Borrower shall prepay on such day
principal of Revolving Loans of such Defaulting Bank in an amount equal to such
excess.
(b) (i) In addition to any other mandatory repayments pursuant to
this Section 4.02, the Borrower shall be required to repay the principal amount
of A Term Loans on each date set forth below in the amount set forth opposite
such date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(h), a "Scheduled A Repayment"):
-26-
Date
----
Amount
------
the last Business Day in January, 1996 $500,000
the last Business Day in April, 1996 $750,000
the last Business Day in July, 1996 $1,000,000
the last Business Day in October, 1996 $1,750,000
the last Business Day in January, 1997 $1,000,000
the last Business Day in April, 1997 $15,000,000
the last Business Day in July, 1997 $3,000,000
A Term Loan Maturity Date $32,000,000
(ii) In addition to any other mandatory repayments pursuant to this
Section 4.02, the Borrower shall be required to repay the principal amount of B
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02(h), a "Scheduled B Repayment"):
Date Amount
---- ------
the last Business Day in January, 1996 $500,000
the last Business Day in April, 1996 $750,000
the last Business Day in July, 1996 $1,000,000
the last Business Day in October, 1996 $1,750,000
B Term Loan Maturity Date $1,000,000
(c) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date on or after the Restatement Effective Date upon which
Holdings or any of its Subsidiaries receives any proceeds from any incurrence by
Holdings or any of its Subsidiaries of Indebtedness for borrowed money (other
than Indebtedness for borrowed money permitted to be incurred under Section 9.05
as said Section is in effect on the Restatement Effective Date), an amount equal
to 100% of the cash proceeds of the respective incurrence of Indebtedness (net
of underwriting or placement discounts and commissions and other reasonable
costs associated therewith) shall be applied as a mandatory repayment of
principal of outstanding Term Loans pursuant to Sections 4.02(h) and (i).
(d) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date on or after the Restatement Effective Date upon which
Holdings or any of its Subsidiaries receives proceeds from any sale of assets
(excluding (i) sales of inventory
-27-
in the ordinary course of business, (ii) sales of equipment and related software
to customers of the Borrower or any other Subsidiary of Holdings in the ordinary
course of business pursuant to the terms of the respective wagering systems
equipment contracts or similar contracts to which such Person is a party, (iii)
sales of obsolete or worn out assets in the ordinary course of business pursuant
to Section 9.02(i) in an aggregate amount not to exceed $1,000,000 in any fiscal
year of Holdings and (iv) sales of assets in the ordinary course of business
pursuant to Section 9.02(ii) in an aggregate amount not to exceed $1,000,000 in
any fiscal year of Holdings), an amount equal to 100% of the Net Sale Proceeds
therefrom shall be applied as a mandatory repayment of principal of outstanding
Term Loans pursuant to Sections 4.02(h) and (i).
(e) In addition to any other mandatory repayments pursuant to this
Section 4.02, within 10 days following each date on or after the Restatement
Effective Date upon which Holdings or any of its Subsidiaries receives any
proceeds from any Recovery Event, an amount equal to 100% of the proceeds of
such Recovery Event (net of reasonable costs and taxes incurred in connection
with such Recovery Event and any amounts required to be applied (and are
applied) to the repayment of any other Indebtedness secured by a prior perfected
security interest (to the extent permitted by this Agreement) in the property
subject to such Recovery Event) shall be applied as a mandatory repayment of
principal of outstanding Term Loans pursuant to Sections 4.02(h) and (i);
provided, that so long as no Default or Event of Default then exists, no such
--------
mandatory repayment shall be required to the extent that Holdings or the
Borrower has delivered a certificate to the Agent on or prior to such date
stating that such proceeds shall be used to replace or restore any properties or
assets in respect of which such proceeds were paid within nine months following
the date of such Recovery Event (which certificate shall set forth the estimates
of the proceeds to be so expended), and provided further, that (i) if the amount
of such proceeds exceeds $5,000,000 (other than as a result of a Recovery Event
that has occurred with respect to property located at a racetrack or any other
wagering facility, in which case such proceeds shall be applied as provided
elsewhere in this Section 4.02(e) without regard to the terms of this sub-clause
(i)), then the principal of outstanding Term Loans shall be repaid as provided
above in this Section 4.02(e) by an amount equal to the portion in excess of
$5,000,000 and (ii) if all or any portion of such proceeds not required to be
applied to repay principal of outstanding Term Loans as provided in the
immediately preceding proviso are not so used within nine months after the date
of the respective Recovery Event, then the principal of outstanding Term Loans
shall be repaid as provided above in this Section 4.02(e) on the date which is
the nine month anniversary of the respective Recovery Event in an amount equal
to the remaining portion of such proceeds not so used.
(f) (i) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each date on or after the Restatement Effective Date upon
which Holdings or any of its Subsidiaries receives any Section 4.02(f) Equity
Proceeds, an amount equal to (A)(x) 50% of the next $10,000,000 of Section
4.02(f) Equity Proceeds received on or
-28-
after the Restatement Effective Date shall be applied as a mandatory repayment
of principal of outstanding Term Loans pursuant to Sections 4.02(h) and (i) and
(y) the remaining 50% of such Section 4.02(f) Equity Proceeds shall be applied
as a mandatory prepayment of outstanding Revolving Loans pursuant to Section
4.02(i) (with no corresponding reduction to the Total Revolving Loan
Commitment), (B) (x) 30% of the second $10,000,000 of Section 4.02(f) Equity
Proceeds received on or after the Restatement Effective Date shall be applied as
a mandatory repayment of principal of outstanding Term Loans pursuant to
Sections 4.02(h) and (i) and (y) the remaining 70% of such Section 4.02(f)
Equity Proceeds shall be applied as a mandatory prepayment of outstanding
Revolving Loans pursuant to Section 4.02(i) (with no corresponding reduction to
Total Revolving Loan Commitment), and (C) (x) 25% of the Section 4.02(f) Equity
Proceeds in excess of the amounts provided for in preceding clauses (A) and (B)
shall be applied as a mandatory repayment of principal of outstanding Term Loans
pursuant to Sections 4.02(h) and (i) and (y) the remaining 75% of such Section
4.02(f) Equity Proceeds shall be applied as a mandatory prepayment of
outstanding Revolving Loans pursuant to Section 4.02(i) (with no corresponding
reduction to Total Revolving Loan Commitment).
(ii) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each date on or after the Restatement Effective Date upon which
Holdings receives any cash proceeds from the exercise of any warrants issued to
any Bank (or any affiliate thereof) pursuant to the January 1996 Warrant
Agreement or the September 1995 Warrant Agreement, an amount equal to 100% of
the cash proceeds therefrom (net of any underwriting or placement discounts and
commissions and other reasonable costs associated therewith) shall be applied as
a mandatory repayment of outstanding Revolving Loans pursuant to Section 4.02(i)
(with no corresponding reduction to the Total Revolving Loan Commitment).
(g) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 75% of the
Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied as
a mandatory repayment of principal of outstanding Term Loans pursuant to
Sections 4.02(h) and (i).
(h) All mandatory repayments of Term Loans pursuant to Sections
4.02(c), (d), (e), (f)(i) and (g) which are required to be applied in accordance
with the provisions of this Sections 4.02(h) shall be applied (1) first, with
respect to the first $5,000,000 of such repayments made on or after the
Restatement Effective Date, to repay in direct order of maturity the Scheduled
Repayments of the respective Tranches of Term Loans (with each such Scheduled
Repayment of such Tranche of Term Loans due on a given date to be allocated that
percentage of the amount to be applied as is equal to a fraction (expressed as
a percentage) the numerator if which is equal to the amount of the Scheduled
Repayment of such Tranche of Term Loans that is due on such date and the
denominator of which is equal to the amount of the Scheduled Repayments of both
Tranches of Term Loans that are
-29-
due on such date, (2) second, with respect to the second $5,000,000 of such
repayments made on or after the Restatement Effective Date, to repay the
Scheduled A Repayment that is due on the last Business Day of April, 1997, and
(3) third, with respect to all such additional repayments made on or after the
Restatement Effective Date pursuant to such Sections, to repay principal of the
outstanding A Term Loans and B Term Loans pro rata based upon the then remaining
--- ----
principal amounts of the respective Tranches of Term Loans (with each such
Tranche of Term Loans to be allocated that percentage of the amount to be
applied as is equal to a fraction (expressed as a percentage) the numerator of
which is equal to the then outstanding principal amount of such Tranche of Term
Loans and the denominator of which is equal to the then outstanding principal
amount of all Term Loans), with such repayments pursuant to this clause (3) to
be applied to reduce the then remaining Scheduled Repayments of the respective
Tranche of Term Loans pro rata based upon the then remaining unpaid amounts of
--- ----
such Scheduled Repayments of the respective Tranche (after giving effect to all
prior reductions thereto).
(i) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings pursuant to which made; provided, that (i) repayments of
--------
Eurodollar Loans pursuant to this Section 4.02 may only be made on the last day
of an Interest Period applicable thereto unless all Eurodollar Loans of the
respective Tranche with Interest Periods ending on such date of required
repayment and all Base Rate Loans of the respective Tranche have been paid in
full, (ii) if any repayment of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall be converted at the end of the then current
Interest Period into Base Rate Loans, and (iii) except for the differing
treatments of Defaulting Banks and Non-Defaulting Banks as expressly provided in
Section 4.02(a), each repayment of any Tranche of Loans made pursuant to a
Borrowing shall be applied pro rata among such Tranche of Loans. In the absence
--- ----
of a designation by the Borrower as described in the preceding sentence, the
Agent shall, subject to the above, make such designation in its sole discretion.
(j) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans of a respective Tranche shall be
repaid in full on the Maturity Date for such Tranche of Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement or any Note shall be made to
the Agent for the account of the Bank or Banks entitled thereto not later than
12:00 Noon (New York time) on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office of the Agent. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date
-30-
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest shall be payable at the applicable rate
during such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
------------
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or profits of a Bank pursuant to the laws of
the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar liabil
ities with respect thereto (all such non-excluded taxes, levies, imports,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for under this Agreement or under any Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, the
Borrower agrees to reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which such Bank is organized or in
which the principal office or applicable lending office of such Bank is located
or under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Bank is organized or in which the principal office or
applicable lending office of such Bank is located and for any withholding of
income or similar taxes imposed by the United States of America as such Bank
shall determine are payable by, or withheld from, such Bank in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Borrower will furnish to the Agent within 45 days after the date
the payment of any Taxes is due pursuant to applicable law certified copies of
tax receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless each Bank, and reimburse such Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Restatement Effective Date, or in the case of a
Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 13.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and
-31-
complete original signed copies of Internal Revenue Service Form 4224 or 1001
(or successor forms) certifying to such Bank's entitlement to a complete
exemption from United States withholding tax with respect to payments to be made
under this Agreement and under any Note, or (ii) if the Bank is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Restatement Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, it will deliver to the Borrower and the Agent two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001,
or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Bank to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Borrower and the Agent of its inability to
deliver any such Form or Certificate. Notwithstanding anything to the contrary
contained in Section 4.04(a), but subject to Section 13.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political sub division or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income
tax purposes to the extent that such Bank has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated pursuant to
Section 4.04(a) hereof to gross-up payments to be made to a Bank in respect of
income or similar taxes imposed by the United States if (I) such Bank has not
provided to the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case of
a payment, other than interest, to a Bank described in clause (ii) above, to the
extent that such Forms do not establish a complete exemption from withholding of
such taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 4.04 and except as set forth in Section
13.04(b), the Borrower agrees to pay additional amounts and to indemnify each
Bank in the manner set forth in Section 4.04(a) (without regard to the identity
of the jurisdiction requiring the deduction or withholding) in respect of any
amounts deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Restatement Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or withholding of income
or similar Taxes.
-32-
SECTION 5. Conditions Precedent to the Restatement Effective Date and
----------------------------------------------------------
Credit Events on the Restatement Effective Date. The occurrence of the
-----------------------------------------------
Restatement Effective Date pursuant to Section 13.10 and the obligation of each
Bank to convert and/or make Loans, and the obligation of each Issuing Bank to
issue Letters of Credit, on the Restatement Effective Date is subject at the
time of such Credit Event (except as hereinafter indicated) to the satisfaction
of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Restatement
-----------------------------
Effective Date (i) this Agreement shall have been executed and delivered in
accordance with Section 13.10 and (ii) there shall have been delivered to the
Agent for the account of each of the Banks the appropriate A Term Note, B Term
Note and Revolving Note executed by the Borrower, and to BTCo the Swingline Note
executed by the Borrower, in each case in the amount, maturity and as otherwise
provided herein.
5.02 Fees, etc. (i) On the Restatement Effective Date, Holdings and
----------
the Borrower shall have paid to the Agent and the Banks all costs, fees and
expenses (including, without limitation, legal fees and expenses, UCC filing
fees and title insurance fees) payable to the Agent and the Banks to the extent
then due.
(ii) On or prior to the Restatement Effective Date, Holdings and each
Bank that has signed a counterpart of this Agreement (or an affiliate of each
such Bank) shall have duly executed and delivered the Warrant Agreement in the
form of Exhibit E (the "January 1996 Warrant Agreement"), and Holdings shall
have delivered to each such Bank (or the respective affiliate thereof) a Warrant
in the form attached to the January 1996 Warrant Agreement appropriately
completed for such Bank (or affiliate thereof).
5.03 Opinions of Counsel. On the Restatement Effective Date, the
-------------------
Agent shall have received (i) from Kronish, Lieb, Wiener & Xxxxxxx LLP, special
counsel to Holdings and its Subsidiaries, an opinion addressed to the Agent and
each of the Banks and dated the Restatement Effective Date covering the matters
set forth in Exhibit F-1 and such other matters incident to the transactions
contemplated herein as the Agent may reasonably request and (ii) from Xxxxxx X.
Xxxxxxx, Esq., General Counsel of Holdings and its Subsidiaries, an opinion
addressed to the Agent and each of the Banks and dated the Restatement Effective
Date covering the matters set forth in Exhibit F-2 and such other matters
incident to the transactions contemplated herein as the Agent may reasonably
request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Restatement
--------------------------------------
Effective Date, the Agent shall have received a certificate, dated the
Restatement Effective Date, signed by the Chairman of the Board, the President,
any Vice President or the Treasurer of each Credit Party, and attested to by the
Secretary or any Assistant Secretary
-33-
of such Credit Party, in the form of Exhibit G with appropriate insertions,
together with copies of the certificate of incorporation (or equivalent
organizational document) and by-laws of such Credit Party and the resolutions of
such Credit Party referred to in such certificate, and the foregoing shall be
reasonably acceptable to the Agent.
(b) On the Restatement Effective Date, the Agent shall have received
a certificate, dated the Restatement Effective Date, signed by the Chairman of
the Board, the President, any Vice President or the Treasurer of Holdings
stating that all the conditions in Sections 5.09, 5.10 and 6.01 have been
satisfied on such date.
(c) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Credit Documents shall be reasonably satisfactory in form and
substance to the Agent and the Required Banks, and the Agent shall have received
all information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Agent reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
5.05 Subsidiaries Guaranty. On the Restatement Effective Date, each
---------------------
Subsidiary Guarantor shall have duly authorized, executed and delivered an
amendment to the Subsidiaries Guaranty in the form of Exhibit H, and the
Subsidiaries Guaranty, as so amended, shall be in full force and effect.
5.06 Pledge Agreement. On the Restatement Effective Date, each
----------------
Credit Party shall have duly authorized, executed and delivered an amendment to
the Pledge Agreement in the form of Exhibit I and shall have delivered to the
Collateral Agent, as Pledgee, all the Pledged Securities, if any, referred to
therein then owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with executed
and undated stock powers in the case of capital stock constituting Pledged
Securities, and the Pledge Agreement, as so amended, shall be in full force and
effect.
5.07 Security Agreement. On the Restatement Effective Date, each
------------------
Credit Party shall have duly authorized, executed and delivered an amendment to
the Security Agreement in the form of Exhibit J, together with evidence of the
completion of all recordings and filings of, or with respect to, the Security
Agreement as may be necessary or, in the reasonable opinion of the Collateral
Agent, desirable to perfect the security interests intended to be created by the
Security Agreement, and the Security Agreement, as so amended, shall be in full
force and effect.
-34-
5.08 Mortgage Amendments. On the Restatement Effective Date, the
-------------------
Collateral Agent shall have received fully executed counterparts of amendments,
in form and substance satisfactory to the Collateral Agent, to each of the
existing Mortgages, together with evidence that counterparts of each such
Mortgage amendment have been delivered for recording in all places to the extent
necessary or desirable, in the judgment of the Collateral Agent, effectively to
maintain a valid and enforceable first priority mortgage lien on the respective
Mortgaged Properties in favor of the Collateral Agent for the benefit of the
Secured Creditors.
5.09 Adverse Change, etc. (a) On the Restatement Effective Date,
--------------------
nothing shall have occurred (and the Banks shall have become aware of no facts,
conditions or other information not previously known) which the Agent or the
Required Banks shall determine has, or could reasonably be expected to have, a
material adverse effect on the rights or remedies of the Agent or the Banks, or
on the ability of any Credit Party to perform their respective obligations to
the Agent and the Banks or which has, or could reasonably be expected to have, a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings, the
Borrower or of Holdings and its Subsidiaries taken as a whole.
(b) On or prior to the Restatement Effective Date, all necessary
governmental (domestic and foreign) and third party approvals in connection with
the transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the transactions contemplated by this
Agreement. Additionally, there shall not exist any judgment, order, injunction
or other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the transactions contemplated by this
Agreement.
5.10 Litigation. On the Restatement Effective Date, no litigation by
----------
any entity (private or governmental) shall be pending or threatened with respect
to this Agreement or any documentation executed in connection herewith or
therewith, or the transactions contemplated hereby, or with respect to any
material Indebtedness of Holdings or any of its Subsidiaries, or which the Agent
or the Required Banks shall determine could reasonably be expected to have a
materially adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings, the
Borrower, or of Holdings and its Subsidiaries taken as a whole.
5.11 Insurance. On or prior to the Restatement Effective Date, there
---------
shall have been delivered to the Agent evidence of insurance complying with the
requirements of Section 8.03 for the business and properties of Holdings and its
Subsidiaries, in scope,
-35-
form and substance satisfactory to the Agent and the Required Banks and naming
the Collateral Agent as an additional insured and/or loss payee, and stating
that such insurance shall not be cancelled or revised without at least 30 days
(or 10 days in the case of nonpayment of premium) prior written notice by the
insurer to the Agent.
5.12 Tax Sharing Agreement. On or prior to the Restatement Effective
---------------------
Date, Holdings shall have delivered to the Agent a true and correct copy of the
Tax Sharing Agreement, and the Tax Sharing Agreement shall be in full force and
effect.
5.13 Solvency Certificate. On the Restatement Effective Date, the
--------------------
Agent shall have received a certificate from the Chief Financial Officer of
Holdings in the form of Exhibit O.
SECTION 6. Conditions Precedent to the Restatement Effective Date and
----------------------------------------------------------
to All Credit Events. The occurrence of the Restatement Effective Date pursuant
--------------------
to Section 13.10 and the obligation of each Bank to maintain and/or make Loans
(including Loans made on the Restatement Date but excluding Mandatory Borrowings
made thereafter, which shall be made as provided in Section 1.01(c)), and the
obligation of an Issuing Bank to issue any Letter of Credit, is subject, at the
time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
------------------------------------------
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to
---------------------------------------------
the making of each Revolving Loan, the Agent shall have received a Notice of
Borrowing required by Section 1.03(a). Prior to the making of each Swingline
Loan, BTCo shall have received the notice required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Agent and the
respective Issuing Bank shall have received a Letter of Credit Request meeting
the requirements of Section 2.03.
The occurrence of the Restatement Effective Date and the acceptance of
the proceeds or benefits of each Credit Event shall constitute a representation
and warranty by
-36-
Holdings and the Borrower to the Agent and each of the Banks that all the
conditions specified in Section 5 and in this Section 6 and applicable to the
Restatement Effective Date and such Credit Event exist as of that time. All of
the Notes, certificates, legal opinions and other documents and papers referred
to in Section 5 and in this Section 6, unless otherwise specified, shall be
delivered to the Agent at the Notice Office for the account of (and for delivery
to) each of the Banks and, except for the Notes, in sufficient counterparts for
each of the Banks and shall be in form and substance reasonably satisfactory to
the Banks.
Notwithstanding anything to the contrary contained above or in Section
13.10, if the Restatement Effective Date does not occur on or prior to January
31, 1996, then it shall not thereafter occur (unless the Agent and the Required
Banks agree in writing to an extension of such date), and this Agreement shall
cease to be of any further force or effect (except with respect to the
indemnification provisions set forth herein which by their terms survive any
such termination of this Agreement) and the Original Credit Agreement shall
continue to be effective, as the same may have been, or may thereafter be,
amended, modified or supplemented from time to time.
SECTION 7. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Banks to enter into this Agreement and to maintain and/or make the
Loans, and issue (or participate in) the Letters of Credit as provided herein,
each of Holdings and the Borrower makes the following representations,
warranties and agreements, in each case after giving effect to the Restatement
Effective Date, all of which shall survive the execution and delivery of this
Agreement and the Notes and the conversion and/or making of the Loans and
issuance of the Letters of Credit, with the occurrence of the Restatement
Effective Date and each Credit Event on or after the Restatement Effective Date
being deemed to constitute a representation and warranty that the matters
specified in this Section 7 are true and correct in all material respects on and
as of the Restatement Effective Date and on the date of each such Credit Event
(it being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
7.01 Corporate Status. Each of Holdings and each of its Subsidiaries
----------------
(i) is a duly organized and validly existing corporation in good standing under
the laws of the jurisdiction of its incorporation, (ii) has the corporate power
and authority to own its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly qualified
and is authorized to do business and is in good standing in each jurisdiction
where the conduct of its business requires such qualifications except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings, the Borrower or of Holdings and its Subsidiaries taken as
a whole.
-37-
7.02 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Credit Documents to which it is party and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of each of such Credit Documents. Each Credit Party has duly
executed and delivered each of the Credit Documents to which it is party, and
each of such Credit Documents constitutes the legal, valid and binding
obligation of such Credit Party enforceable in accordance with its terms, except
to the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
------------
any Credit Party of the Credit Documents to which it is a party, nor compliance
by it with the terms and provisions thereof, (i) will contravene any provision
of any applicable law, statute, rule or regulation or any applicable order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the properties or assets
of Holdings, the Borrower or any of their respective Subsidiaries pursuant to
the terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, to which
Holdings, the Borrower or any of their respective Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the charter or other organizational
documents of Holdings, the Borrower or any of their respective Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
----------------------
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made on or prior to the Restatement Effective
Date), or exemption by, any governmental or public body or authority (including,
without limitation, any applicable gaming authority), or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.
7.05 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections; etc. (a) At the time of delivery thereof pursuant to
------------------------------
Section 8.01(l), the consolidated statements of financial condition of Holdings
and its Subsidiaries at October 31, 1995 and the related consolidated statements
of income and cash flow and changes in shareholders' equity of Holdings and its
Subsidiaries for the fiscal year ended on such date, will present fairly the
consolidated financial condition of Holdings at the date of such statement of
financial condition and the results of the consolidated operations of Holdings
for such fiscal year. All such financial statements will have been prepared in
accordance with
-38-
generally accepted accounting principles and practices consistently applied.
Since October 31, 1995, there has been no material adverse change in the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings, the Borrower or of Holdings and its
Subsidiaries taken as a whole.
(b) (i) On and as of the Restatement Effective Date, after giving
effect to all Indebtedness (including the Loans) being incurred or assumed and
Liens created by each of Holdings, the Borrower and their respective
Subsidiaries in connection therewith (assuming the full utilization of the Total
Revolving Loan Commitment on the Restatement Effective Date), (a) the sum of the
assets, at a fair valuation, of each of Holdings and the Borrower (on a stand-
alone basis), and of Holdings and its Subsidiaries (on a consolidated basis),
will exceed their respective debts; (b) each of Holdings and the Borrower (on a
stand-alone basis), and Holdings and its Subsidiaries (on a consolidated basis),
have not incurred and do not intend to incur, and do not believe that they will
incur, debts beyond their ability to pay such debts as such debts mature; and
(c) each of Holdings and the Borrower (on a stand-alone basis), and Holdings and
its Subsidiaries (on a consolidated basis), will have sufficient capital with
which to conduct its business. For purposes of this Section 7.05(b), "debt"
means any liability on a claim, and "claim" means (i) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, un matured, disputed, undisputed, legal, equitable,
secured, or unsecured or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 7.05(a) or as set forth on Schedule IV, there were as of the
Restatement Effective Date no liabilities or obligations with respect to
Holdings, the Borrower or any of their respective Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, would be material to
Holdings, the Borrower or to Holdings and its Subsidiaries taken as a whole. As
of the Restatement Effective Date, neither Holdings nor the Borrower knows of
any basis for the assertion against it of any liability or obligation of any
nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) or set forth on Schedule IV which, either
individually or in the aggregate, could be material to Holdings, the Borrower or
Holdings and its Subsidiaries taken as a whole.
(d) On and as of the Restatement Effective Date, the financial
projections (the "Projections") previously delivered to the Agent and the Banks
have been prepared and based on the underlying accounting principles consistent
with the financial statements referred to in Section 7.05(a) (other than as set
forth or presented in such Projections), and there are no statements or
conclusions in any of the Projections which are based upon or
-39-
include information known to Holdings to be misleading in any material respect
or which fail to take into account material information regarding the matters
reported therein. On the Restatement Effective Date, Holdings believed that the
Projections were reasonable and attainable.
7.06 Litigation. There are no actions, suits or proceedings pending
----------
or, to the best knowledge of Holdings and the Borrower, threatened (i) with
respect to any Credit Document, (ii) with respect to any material Indebtedness
of Holdings or any of its Subsidiaries or (iii) that could reasonably be
expected to materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of
Holdings, the Borrower or of Holdings and its Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) furnished by or on behalf of Holdings, the Borrower or their respective
Subsidiaries in writing to the Agent or any Bank (including, without limitation,
all in formation contained in the Credit Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of Holdings, the Borrower or
their respective Subsidiaries in writing to the Agent or any Bank will be, true
and accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any fact necessary
to make such information (taken as a whole) not misleading in any material
respect at such time in light of the circumstances under which such information
was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of all
-----------------------------------
Revolving Loans and Swingline Loans incurred on or after the Restatement
Effective Date shall be used for the general corporate and working capital
purposes of Holdings and its Subsidiaries.
(b) No part of the proceeds of any Loan will be used (or has been
used) to purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof nor the occurrence of any other Credit Event
will violate or be inconsistent with the provisions of Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of Holdings, the Borrower and
------------------------
each of their respective Subsidiaries has timely filed or caused to be timely
filed, on the due dates thereof or pursuant to extensions thereof, with the
appropriate taxing authority, all Federal, state and other material returns,
statements, forms and reports for taxes (the "Returns") required to be filed by
or with respect to the income, properties or operations of Holdings, the
Borrower and/or any of their respective Subsidiaries. The Returns
-40-
accurately reflect in all material respects all liability for taxes of Holdings,
the Borrower and their respective Subsidiaries for the periods covered thereby.
Each of Holdings, the Borrower and each of their respective Subsidiaries have
paid all material taxes payable by them as shown on such Returns other than
taxes which are not delinquent, and other than those contested in good faith and
for which adequate reserves have been established in accordance with generally
accepted accounting principles. Except as disclosed in the financial statements
referred to in Section 7.05(a) or as set forth on Schedule V, there is no
material action, suit, proceeding, investigation, audit, or claim now pending
or, to the best knowledge of Holdings or the Borrower, threatened by any
authority regarding any taxes relating to Holdings, the Borrower or any of their
respective Subsidiaries. Except as set forth on Schedule V, as of the
Restatement Effective Date, none of Holdings, the Borrower or any of their
respective Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of Holdings, the
Borrower or any of their respective Subsidiaries, or is aware of any
circumstances that would cause the taxable years or other taxable periods of
Holdings, the Borrower or any of their respective Subsidiaries not to be subject
to the normally applicable statute of limitations. None of Holdings, the
Borrower or any of their respective Subsidiaries has provided, with respect to
themselves or property held by them, any consent under Section 341 of the Code.
7.10 Compliance with ERISA. Each Plan is in substantial compliance
---------------------
with ERISA and the Code; no Reportable Event has occurred with respect to a Plan
which could reasonably be expected to result in a material liability of any of
Holdings, the Borrower, Holdings and its Subsidiaries taken as a whole or any
ERISA Affiliate; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency, has permitted decreases in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Code; all contributions required to be made with respect to a
Plan have been timely made; none of Holdings, the Borrower, or any of their
respective Subsidiaries nor any ERISA Affiliate has incurred any material
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(1),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or expects to incur any such liability under any of the
foregoing Sections with respect to any Plan; no proceedings have been instituted
either by the PBGC or, other than pursuant to Section 4041(c) of ERISA, by
Holdings, the Borrower or any of their respective Subsidiaries or any ERISA
Affiliate to terminate or appoint a trustee to administer any Plan; no condition
exists which presents a material risk to Holdings, the Borrower or any of their
respective Subsidiaries or any ERISA Affiliate of incurring a material liability
to or on account of a Plan pursuant to the foregoing provisions of ERISA and the
Code; no lien imposed under the Code or ERISA on the assets of Holdings, the
Borrower or any of their respective Subsidiaries or any ERISA Affiliate exists
or is likely to arise on account of any Plan; and Holdings, the Borrower and
their respective Subsidiaries do not maintain or contribute to any employee
-41-
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or any employee pension benefit plan (as defined in
Section 3(2) of ERISA) the obligations with respect to which could reasonably be
expected to have a material adverse effect on the ability of Holdings, the
Borrower or any Subsidiary to perform their respective obligations under the
Credit Documents to which they are a party.
7.11 The Security Documents. (a) The provisions of the Security
----------------------
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Security Agreement creates a
fully perfected first lien on, and security interest in, all right, title and
interest in all of the Security Agreement Collateral described therein, subject
to no other Liens other than Permitted Liens. The recordation of the Assignment
of Security Interest in U.S. Patents and Trademarks in the form attached to the
Security Agreement in the United States Patent and Trademark Office together
with filings on Form UCC-1 made pursuant to the Security Agreement will be
effective, under applicable law, to perfect the security interest granted to the
Collateral Agent in the trademarks and patents covered by the Security Agreement
and the recordation of the Assignment of Security Interest in U.S. Copyrights in
the form attached to the Security Agreement with the United States Copyright
Office together with filings on Form UCC-1 made pursuant to the Security
Agreement will be effective under federal law to perfect the security interest
granted to the Collateral Agent in the copyrights covered by the Security
Agreement. Each of the Credit Parties has good and valid title to all Security
Agreement Collateral described in the Security Agreement, free and clear of all
Liens except those described above in this clause (a).
(b) The security interests created in favor of the Collateral Agent,
as Pledgee, for the benefit of the Secured Creditors under the Pledge Agreement
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledged
Securities and the proceeds thereof under the Pledge Agreement.
(c) At the time of grant thereof and at all times thereafter, the
Mortgages create, as security for the obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and first
mortgage Lien on all of the Mortgaged Properties in favor of the Collateral
Agent (or such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors, superior to and prior to the rights of all
third Persons (except that the security interest created in the Mortgaged
-42-
Properties may be subject to the Permitted Encumbrances related thereto) and
subject to no other Liens (other than Permitted Liens).
7.12 Properties. The Real Property owned or leased by Holdings or
----------
any of its Subsidiaries, in each case as of the Restatement Effective Date, and
the nature of the interest therein, is correctly set forth in Schedule VI.
Holdings, the Borrower and each of their respective Subsidiaries have good and
valid title to all properties owned by them, including all property reflected in
the balance sheet of Holdings referred to in Section 7.05(a) (except as sold or
otherwise disposed of since the date of such balance sheet in the ordinary
course of business or as otherwise permitted by the Original Credit Agreement),
free and clear of all Liens, other than (i) as referred to in the balance sheet
or in the notes thereto or in the pro forma balance sheet or (ii) Permitted
Liens.
7.13 Capitalization. (a) On the Restatement Effective Date and
--------------
after giving effect to the transactions contemplated hereby, the authorized
capital stock of Holdings shall consist of (i) 99,300,000 shares of Holdings
Class A Common Stock, $.01 par value per share, of which 30,942,295 shares shall
be issued and outstanding, (ii) 700,000 shares of Holdings Class B Common Stock,
$.01 par value per share, no shares of which are issued and outstanding and
(iii) 2,000,000 shares of Holdings Preferred Stock, $1.00 par value per share,
no shares of which are issued and outstanding. All such outstanding shares have
been duly and validly issued, are fully paid and non-assessable and have been
issued free of preemptive rights. Except as set forth on Schedule VII, as of the
Restatement Effective Date, Holdings does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
(b) On the Restatement Effective Date, the authorized capital stock
of the Borrower shall consist of (i) 1,900,000 shares of ordinary common stock,
$1.00 par value per share, of which 1,081,081 shares shall be issued and
outstanding and delivered for pledge pursuant to the Pledge Agreement and (ii)
100,000 shares of deferred common stock, $1.00 par value per share, all of which
shall be issued and outstanding and delivered for pledge pursuant to the Pledge
Agreement. All such outstanding shares of common stock have been duly and
validly issued, are fully paid and nonassessable and are free of preemptive
rights. As of the Restatement Effective Date, the Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
other wise) of, or any calls, commitments or claims of any character relating
to, its capital stock.
-43-
7.14 Subsidiaries. Holdings has no Subsidiaries other than (i) those
------------
Subsidiaries listed on Schedule VIII and (ii) new Subsidiaries created in
compliance with Section 9.17.
7.15 Compliance with Statutes, etc. Each of Holdings, the Borrower
------------------------------
and each of their respective Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings, the Borrower or of Holdings and its
Subsidiaries taken as a whole.
7.16 Investment Company Act. None of Holdings, the Borrower or any
----------------------
of their respective Subsidiaries is an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
7.17 Public Utility Holding Company Act. None of Holdings, the
----------------------------------
Borrower or any of their respective Subsidiaries is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
7.18 Environmental Matters. (a) Holdings, the Borrower and each of
---------------------
their respective Subsidiaries is in compliance with all applicable Environmental
Laws and the requirements of any permits issued under such Environmental Laws.
There are no pending or, to the best knowledge of Holdings and the Borrower
after due inquiry, threatened Environmental Claims against Holdings, the
Borrower or any of their respective Subsidiaries or any Real Property owned or
operated by Holdings, the Borrower or any of their respective Subsidiaries.
There are no facts, circumstances, conditions or occurrences on any Real
Property owned or operated by Holdings, the Borrower or any of their respective
Subsidiaries or, to the best knowledge of Holdings or the Borrower after due
inquiry, on any property adjoining or in the vicinity of any such Real Property
that, to the best knowledge of Holdings or the Borrower after due inquiry, could
reasonably be expected (i) to form the basis of an Environmental Claim against
Holdings, the Borrower or any of their respective Subsidiaries or any such Real
Property, or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such Real
Property by Holdings, the Borrower or any of their respective Subsidiaries under
any applicable Environmental Law.
-44-
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings, the Borrower or any of their respective Subsidiaries where
such generation, use, treatment or storage has violated or could reasonably be
expected to violate any Environmental Law. Hazardous Materials have not at any
time been Released on or from any Real Property owned or operated by Holdings,
the Borrower or any of their respective Subsidiaries where such Release has
violated or could reasonably be expected to violate any applicable Environmental
Law. There are not now any underground storage tanks located on any Real
Property owned or operated by Holdings, the Borrower or any of their respective
Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.18,
the representations made in this Section 7.18 shall only be untrue if the
aggregate effect of all failures and noncompliances of the types described above
could reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings, the Borrower or of Holdings and its Subsidiaries taken as
a whole.
7.19 Labor Relations. None of Holdings, the Borrower nor any of
---------------
their respective Subsidiaries is engaged in any unfair labor practice that could
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings, the Borrower or of Holdings and its Subsidiaries taken as
a whole. There is (i) no unfair labor practice complaint pending against
Holdings, the Borrower or any of their respective Subsidiaries or, to the best
knowledge of Holdings and the Borrower, threatened against any of them, before
the National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against Holdings, the Borrower or any of their respective Subsidiaries or, to
the best knowledge of Holdings or the Borrower, threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against Holdings,
the Borrower or any of their respective Subsidiaries or, to the best knowledge
of Holdings and the Borrower, threatened against Holdings, the Borrower or any
of their respective Subsidiaries and (iii) to the best knowledge of Holdings and
the Borrower, no union representation proceeding is pending with respect to the
employees of Holdings or the Borrower or any of their respective Subsidiaries,
except (with respect to any matter specified in clause (i), (ii) or (iii) above,
either individually or in the aggregate) such as could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings, the Borrower or of Holdings and its Subsidiaries taken as a whole.
7.20 Patents, Licenses, Franchises and Formulas. Each of Holdings,
------------------------------------------
the Borrower and their respective Subsidiaries owns all material patents,
trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with
-45-
respect to the foregoing, and has obtained assignments of all leases and other
rights of whatever nature, reasonably necessary for the present conduct of its
business, without any known conflict with the rights of others which, or the
failure to obtain which, as the case may be, would result in a material adverse
effect on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings, the Borrower or of Holdings
and its Subsidiaries taken as a whole.
7.21 Indebtedness. Schedule IX sets forth a true and complete list
------------
of all Indebtedness for borrowed money, Capitalized Lease Obligations and
letters of credit of Holdings, the Borrower and their respective Subsidiaries as
of the Restatement Effective Date (excluding the Loans, the Letters of Credit
and the Wellington Subordinated Debt, all such non-excluded Indebtedness, the
"Existing Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower and any other entity which
directly or indirectly guaranteed such debt.
7.22 Subordinated Securities. The subordination provisions of the
-----------------------
Wellington Subordinated Debt are enforceable against Holdings and the holders
thereof, and the Loans and all other monetary obligations hereunder (including,
without limitation, pursuant to the Holdings Guaranty) are within the definition
of "Senior Indebtedness" included in such provisions.
SECTION 8. Affirmative Covenants. Holdings and the Borrower hereby
---------------------
covenant and agree that on and after the Restatement Effective Date and until
the Total Revolving Loan Commitment and all Letters of Credit (other than
Letters of Credit subject to Section 2.01(e)) have terminated and the Loans,
Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. Holdings and/or the Borrower will
---------------------
furnish to each Bank:
(a) Monthly Reports. Within 30 days after the end of each fiscal
---------------
month of Holdings (other than the last fiscal month of each fiscal year of
Holdings), the consolidated and consolidating balance sheets of Holdings
and its Consolidated Subsidiaries as at the end of such month and the
related consolidated and consolidating statements of income and retained
earnings and statement of cash flows, in each case for such month and for
the elapsed portion of the fiscal year ended with the last day of such
month, all of which shall be certified by the chief financial officer of
Holdings, subject to normal year-end audit adjustments.
-46-
(b) Quarterly Financial Statements. Within 45 days after the close
------------------------------
of the first three quarterly accounting periods in each fiscal year of
Holdings, (i) the consolidated and consolidating balance sheets of Holdings
and its Consolidated Subsidiaries as at the end of such quarterly
accounting period and the related consolidated and consolidating statements
of income and retained earnings and statement of cash flows, in each case
for such quarterly accounting period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly accounting period, in
each case setting forth comparative figures for the related periods in the
prior fiscal year and the budgeted figures for such quarterly accounting
period as set forth in the respective budget delivered pursuant to Section
8.01(e), all of which shall be certified by the chief financial officer of
Holdings, subject to normal year-end audit adjustments and (ii)
management's discussions and analysis of the important operational and
financial developments during such quarterly accounting period.
(c) Annual Financial Statements. (i) Within 60 days after the close
---------------------------
of each fiscal year of Holdings, a draft of the consolidated and
consolidating balance sheets of Holdings and its Consolidated Subsidiaries
as at the end of such fiscal year and the related consolidated and
consolidating statements of income and retained earnings and statement of
cash flows, in each case for such fiscal year.
(ii) Within 90 days after the close of each fiscal year of Holdings,
(I) the consolidated and consolidating balance sheets of Holdings and its
Consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows
for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified, (x) in the case of the consolidating financial
statements, by the chief financial officer of Holdings and (y) in the case
of the consolidated financial statements, by KPMG Peat Marwick or such
other independent certified public accountants of recognized national
standing reasonably acceptable to the Agent, together with a report of such
accounting firm stating that in the course of its regular audit of the
financial statements of Holdings and its Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge of any Default or Event of Default
which has occurred and is continuing with respect to the covenants set
forth in Sections 9.04, 9.05, 9.06 and 9.08 through 9.12, inclusive, or, if
in the opinion of such accounting firm such a Default or an Event of
Default has occurred and is continuing, a statement as to the nature
thereof and (II) management's discussions and analysis of the important
operational and financial developments during such fiscal year.
(d) Management Letters. Promptly after the receipt thereof by
------------------
Holdings, the Borrower or any of their respective Subsidiaries, a copy of
any "management
-47-
letter" received by Holdings, the Borrower or such Subsidiary from its
certified public accountants and the management's responses thereto.
(e) Budgets. Prior to the commencement of the first day of each
-------
fiscal year of Holdings, a budget in form satisfactory to the Agent
(including budgeted statements of income and sources and uses of cash,
balance sheets and covenant compliance worksheets on a consolidated basis)
prepared by Holdings for (x) each of the four quarters of such fiscal year
(prepared in detail) of Holdings and its Subsidiaries (both on a
consolidated and consolidating basis), (y) the first year immediately
following such fiscal year (prepared in summary form) of Holdings and its
Subsidiaries (both on a consolidated and consolidating basis) and (z) each
of the second and third years following such fiscal year (prepared in
summary form) of Holdings and its Subsidiaries (on a consolidated basis
only), in each case accompanied by the statement of the chief financial
officer of Holdings to the effect that, to the best of such officer's
knowledge, the budget is a reasonable estimate for the period covered
thereby.
(f) Officer's Certificates. (i) At the time of the delivery of the
----------------------
financial statements provided for in Sections 8.01(b) and (c)(ii), a
certificate of the chief financial officer of Holdings to the effect that,
to the best of such officer's knowledge, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof, which
certificate shall set forth (in reasonable detail) the calculations
required to establish (x) whether Holdings and the Borrower were in
compliance with the provisions of Sections 4.02(d), 4.02(f), 9.03, 9.04,
9.05, 9.06 and 9.08 through 9.12, inclusive, at the end of such fiscal
quarter or year, as the case may be, (y) the Interest Reduction Discount,
if any, at the end of such fiscal quarter or year, as the case may be, and
(z) in connection with the financial statements required to be delivered
pursuant to Section 8.01(c)(ii), the amount of Excess Cash Flow for the
respective Excess Cash Payment Period.
(ii) At least 5 days prior to the making of any cash interest payment
on the Wellington Subordinated Debt, a certificate of the chief financial
officer of Holdings to the effect that, to the best of such officer's
knowledge, no Default or Event of Default has occurred and is continuing
or, if any Default or Event of Default has occurred and is continuing,
specifying the nature and extent thereof, which certificate shall also set
forth (in reasonable detail) the calculations required to establish whether
Holdings and the Borrower were in compliance with the provisions of Section
9.10 at the end of the fiscal quarter ended immediately prior to the making
of such interest payment.
-48-
(g) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within three Business Days after an officer of Holdings or the Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or an Event of Default and (ii) any litigation or
governmental investigation or proceeding pending (x) against Holdings, the
Borrower or any of their respective Subsidiaries which could reasonably be
expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings, the Borrower or of Holdings and its Subsidiaries
taken as a whole, (y) with respect to any material Indebtedness of Holdings
or any of its Subsidiaries or (z) with respect to any Credit Document.
(h) Other Reports and Filings. Promptly, (i) copies of all financial
-------------------------
information, reports and proxy materials which Holdings has mailed to its
shareholders generally, (ii) copies of all registration statements and
reports on Forms 10-K, 10-Q and 8-K (or their equivalent) which Holdings,
the Borrower or any of their respective Subsidiaries shall file with the
Securities and Exchange Commission or any successor thereto (the "SEC") and
(iii) to the extent not otherwise provided to the Banks, copies of all
notices, reports and financial statements which Holdings, the Borrower or
any of their respective Subsidiaries shall deliver to holders of its
Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
---------------------
ten Business Days after, an officer of Holdings, the Borrower or any of
their respective Subsidiaries obtains knowledge thereof, notice of one or
more of the following environmental matters, unless such environmental
matters could not, individually or when aggregated with all other such
environmental matters, be reasonably expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings, the Borrower or of
Holdings and its Subsidiaries taken as a whole, provided, that in any event
--------
Holdings and the Borrower shall deliver to each Bank all notices received
by it or any of their respective Subsidiaries from any government or
governmental agency under, or pursuant to, CERCLA:
(i) any pending or threatened Environmental Claim against
Holdings, the Borrower or any of their respective Subsidiaries or any
Real Property owned or operated by Holdings, the Borrower or any of
their respective Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by Holdings, the Borrower or any of their
-49-
respective Subsidiaries that (a) results in noncompliance by Holdings,
the Borrower or any of their respective Subsidiaries with any
applicable Environmental Law or (b) could reasonably be expected to
form the basis of an Environmental Claim against Holdings, the
Borrower or any of their respective Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by Holdings, the Borrower or any of their respective
Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by Holdings, the Borrower or any of
their respective Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by Holdings, the Borrower or any of their
respective Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and Holdings', the Borrower's or such Subsidiary's response thereto. In
addition, Holdings will provide the Banks with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all communications with any Person relating to any
Environmental Claim (it being understood that neither Holdings nor the
Borrower shall be required to deliver any such communication with its legal
advisors or environmental consultants to the extent that Holdings or the
Borrower reasonably determine that such disclosure would effectively waive
any claim of attorney-client privilege), and such detailed reports of any
such Environmental Claim as may reasonably be requested by the Banks.
(j) Annual Meetings with Banks. Within 120 days after the close of
--------------------------
each fiscal year of Holdings, Holdings shall hold a meeting with all of the
Banks at which meeting shall be reviewed the financial results of the
previous fiscal year and the financial condition of Holdings and the
budgets presented for the current fiscal year of Holdings and its
Subsidiaries.
(k) Revised Cash Flow Statement. Until the Required Banks otherwise
---------------------------
agree, a Revised Cash Flow Statement (as defined in the July 1995
Agreement) on each Thursday of each week, with each Revised Cash Flow
Statement to indicate the actual sources and uses of cash for the
immediately preceding Monday through Friday, the actual Borrowings of
Revolving Loans and Swingline Loans during such
-50-
weekly period, and (for those Revised Cash Flow Statements delivered after
the Initial Cash Flow Statement (as defined in the July 1995 Agreement) has
been delivered) any revisions to the Initial Cash Flow Statement (including
an updated twelve week projected borrowing amount and an updated 12-weekly
cash flow schedule), which Revised Cash Flow Statement shall be certified
by the chief financial officer, the treasurer or any assistant treasurer of
Holdings. As used with respect to each Revised Cash Flow Statement,
"updated twelve week" shall refer to each of the 12 weeks following the
date of such Revised Cash Flow Statement.
(l) Audited Financial Statements. On or prior to January 31, 1996,
----------------------------
the audited financial statements of Holdings and its Subsidiaries for
Holdings' fiscal year ended October 31, 1995, which audited financial
statements shall be in the form required to be delivered pursuant to
Section 8.01(c) of the Original Credit Agreement.
(m) Other Information. From time to time, such other information or
-----------------
documents (financial or otherwise) with respect to Holdings, the Borrower
or their respective Subsidiaries as any Bank may reasonably request in
writing.
8.02 Books, Records and Inspections. Holdings and the Borrower will,
------------------------------
and will cause each of their respective Subsidiaries to, keep proper books of
record and account in which full, true and correct entries in conformity with
generally accepted accounting principles and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. Holdings and the Borrower will, and will cause each of their
respective Subsidiaries to, permit officers and designated representatives of
the Agent or any Bank to visit and inspect, during regular business hours and
under guidance of officers of Holdings, the Borrower or such Subsidiary, any of
the properties of Holdings, the Borrower or such Subsidiary, and to examine the
books of account of Holdings, the Borrower or such Subsidiary and discuss the
affairs, finances and accounts of Holdings, the Borrower or such Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the Agent or such Bank may request.
8.03 Maintenance of Property; Insurance. (a) Schedule X sets forth
----------------------------------
a true and complete listing of all insurance maintained by Holdings, the
Borrower and their respective Subsidiaries as of the Restatement Effective Date.
Holdings and the Borrower will, and will cause each of their respective
Subsidiaries to, (i) keep all property necessary in its business in good working
order and condition, (ii) maintain insurance on all its property in at least
such amounts and against at least such risks as is consistent and in accordance
with industry practice and (iii) furnish to each Bank, upon written request,
full information as to the insurance carried. At any time that insurance at
levels described on Schedule X is not being maintained by Holdings, the Borrower
or any of their respective
-51-
Subsidiaries, Holdings will notify the Banks in writing within three Business
Days thereof and, if thereafter notified by the Required Banks to do so,
Holdings, the Borrower or any such Subsidiary, as the case may be, shall obtain
insurance at such levels at least equal to those set forth on Schedule X to the
extent then generally available.
(b) Holdings and the Borrower will, and will cause their respective
Subsidiaries to, at all times keep their respective property insured in favor of
the Collateral Agent, and all policies (including mortgage policies, if any) or
certificates (or certified copies thereof) with respect to such insurance (and
any other insurance maintained by Holdings, the Borrower or any of their
respective Subsidiaries): (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee or as an additional
insured); (ii) shall state that such insurance policies shall not be cancelled
without at least 30 days' prior written notice thereof by the respective insurer
to the Collateral Agent; (iii) shall provide that the respective insurers
irrevocably waive any and all rights of subrogation with respect to the
Collateral Agent and the Secured Creditors; (iv) shall contain the standard non-
contributory mortgagee clause endorsement in favor of the Collateral Agent with
respect to hazard insurance coverage; (v) shall, except in the case of public
liability insurance and workers' compensation insurance, provide that any
losses shall be payable notwithstanding (A) any act or neglect of Holdings, the
Borrower or any of their respective Subsidiaries, (B) the occupation or use of
the properties for purposes more hazardous than those permitted by the terms of
the respective policy if such coverage is obtainable at commercially reasonable
rates and is of the kind from time to time customarily insured against by
Persons owning or using similar property and in such amounts as are customary,
(C) any foreclosure or other proceeding relating to the insured properties if
such coverage is available at commercially reasonable rates or (D) any change in
the title to or ownership or possession of the insured properties; and (vi)
shall be deposited with the Collateral Agent.
(c) If Holdings, the Borrower or any of their respective Subsidiaries
shall fail to maintain all insurance in accordance with this Section 8.03, or if
Holdings, the Borrower or any of their respective Subsidiaries shall fail to so
endorse and deposit all policies or certificates with respect thereto, the Agent
and/or the Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance and the Borrower agrees to reimburse the
Agent or the Collateral Agent as the case may be, for all costs and expenses of
procuring such insurance.
8.04 Corporate Franchises. Holdings and the Borrower will, and will
--------------------
cause each of their respective Subsidiaries to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence and
its material rights, franchises, licenses and patents; provided, however, that
-------- -------
nothing in this Section 8.04 shall prevent (i) sales of assets by Holdings, the
Borrower or any of their respective Subsidiaries in
-52-
accordance with Section 9.02, (ii) the liquidation of any Inactive Subsidiary or
(iii) the withdrawal by Holdings, the Borrower or any of their respective
Subsidiaries of their qualification as a foreign corporation in any jurisdiction
where such withdrawal could not reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings, the Borrower or of
Holdings and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. Holdings and the Borrower will,
------------------------------
and will cause each of their respective Subsidiaries to, comply with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property, except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings, the Borrower or of Holdings and its Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) Holdings and the
----------------------------------
Borrower will comply, and will cause each of their respective Subsidiaries to
comply, in all material respects with all Environmental Laws applicable to the
ownership or use of its Real Property now or hereafter owned or operated by
Holdings, the Borrower or any of their respective Subsidiaries, will promptly
pay or cause to be paid all costs and expenses incurred in connection with such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws. None of
Holdings, the Borrower nor any of their respective Subsidiaries will generate,
use, treat, store, Release or dispose of, or permit the generation, use,
treatment, storage, Release or disposal of, Hazardous Materials on any Real
Property now or hereafter owned or operated by Holdings, the Borrower or any of
their respective Subsidiaries, or transport or permit the transportation of
Hazardous Materials to or from any such Real Property except for Hazardous
Materials generated, used, treated, stored or Released at any such Real
Properties in material compliance with all applicable Environmental Laws and
reasonably required in connection with the operation, use and maintenance of any
such Real Property.
(b) At the written request of the Agent or the Required Banks, which
request shall specify in reasonable detail the basis therefor, at any time and
from time to time after the Agent or the Required Banks shall have reasonably
determined that either (i) Holdings or any of its Subsidiaries are not in
material compliance with any Environmental Law or (ii) Holdings, any of its
Subsidiaries, the Agent or the Banks may be subject to any liability or
Environmental Claim under any Environmental Law, Holdings will provide, at the
Credit Parties' sole cost and expense, an environmental site assessment report
concerning any Real Property, prepared by an environmental consulting firm
approved by the Agent, indicating the presence or absence of Hazardous Materials
and the potential cost of
-53-
any removal or remedial action in connection with any Hazardous Materials on
such Real Property; provided, that in no event shall such request be made more
--------
often than once every two years for any particular Real Property unless either
(i) the Obligations have been declared due and payable pursuant to Section 10 or
(ii) the Banks receive notice under Section 8.01(i) for any event for which
notice is required to be delivered for any such Real Property. If Holdings fails
to provide the same within 90 days after such request was made, the Agent may
order the same, and the Credit Parties shall grant and hereby grant to the Agent
and the Banks and their agents access to such Real Property and specifically
grants the Agent and the Banks an irrevocable non-exclusive license, subject to
the rights of tenants, to undertake such an assessment, all at the Credit
Parties' expense.
8.07 ERISA. As soon as possible and, in any event, within 10
-----
Business Days after Holdings, the Borrower or any of their respective
Subsidiaries or any ERISA Affiliate knows or has reason to know of the
occurrence of any of the following, Holdings or the Borrower will deliver to the
Agent a certificate of the chief financial officer of Holdings setting forth
details as to such occurrence and the action, if any, that Holdings, the
Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by Holdings, the Borrower, such Subsidiary, the ERISA Affiliate, the
PBGC, or a Plan participant or the Plan administrator with respect thereto: that
a Reportable Event has occurred; that an accumulated funding deficiency has been
incurred or an application has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code with respect to a Plan; that a Plan has been terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability giving rise to a lien under ERISA or the
Code; that proceedings have been instituted to terminate or appoint a trustee to
administer a Plan; that a contribution required to be made to a Plan has not
been timely made; that a proceeding has been instituted pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan; that Holdings, the
Borrower, any of their respective Subsidiaries or any ERISA Affiliate could
reasonably be expected to incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from a
Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan under Section 401(a)(29), 4971 or 4975 of the Code or Section
409 or 502(i) or 502(l) of ERISA or that Holdings, the Borrower or any of their
respective Subsidiaries could reasonably be expected to incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any employee
pension benefit plan (as defined in Section 3(2) of ERISA). Upon the request of
the Agent, Holdings will deliver to the Agent a complete copy of the annual
report (Form 5500) of each Plan required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Agent
pursuant to the first sentence
-54-
hereof, upon the request of the Agent copies of annual reports and any material
notices received by Holdings, the Borrower or any of their respective
Subsidiaries or any ERISA Affiliate with respect to any Plan shall be delivered
to the Agent no later than 10 Business Days after the date such report has been
filed with the Internal Revenue Service or such notice has been received by
Holdings, the Borrower, the Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause (i)
------------------------------------
each of its fiscal years to end on October 31, and (ii) each of its fiscal
quarters to end on January 31, April 30, July 31 and October 31.
8.09 Performance of Obligations. Holdings and the Borrower will, and
--------------------------
will cause each of their respective Subsidiaries to, perform all of its
obligations under the terms of each mortgage, deed of trust, indenture, loan
agreement or credit agreement and each other material agreement, contract or
instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings, the Borrower or of
Holdings and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. Holdings and the Borrower will pay and
----------------
discharge or cause to be paid and discharged, and will cause each of their
respective Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any material properties belonging to it, in each case on a timely basis,
and all lawful claims which, if unpaid, might become a lien or charge upon any
properties of Holdings, the Borrower or any of their respective Subsidiaries;
provided, that none of Holdings, the Borrower or any of their respective
--------
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with generally
accepted accounting principles.
8.11 Additional Security; Additional Guarantors; Further Assurances;
---------------------------------------------------------------
etc. (a) Holdings and the Borrower will, and will cause each of their
---
respective North American Subsidiaries to, grant to the Collateral Agent for the
benefit of the Secured Creditors, at the request of the Agent or the Required
Banks, at any time, a security interest in any Real Property owned or leased by
Holdings, the Borrower or any of their respective North American Subsidiaries
(each a "Mortgaged Property" and, collectively, the "Mortgaged Properties");
provided, that in connection with any Leasehold of any Credit Party, such Credit
--------
Party shall only be required to grant a security interest therein to the extent
that such a grant of a security interest is not prohibited by the applicable
lease (and the lessor thereunder has consented thereto if required by such
lease), provided that such Credit Party shall use its reasonable efforts to
obtain all necessary consents to effectuate a
-55-
valid and enforceable grant of a security interest to the Collateral Agent, and
Holdings and the Borrower shall, and shall cause each of their respective North
American Subsidiaries to, take all reasonable actions requested by the Agent or
the Required Banks (including, without limitation, the obtaining of opinions of
counsel, mortgage policies, title surveys and real estate appraisals satisfying
the requirements of all applicable laws) in connection with the granting of such
security interest; provided, further, that no Credit Party shall be required to
grant a Mortgage on any Real Property to the extent that the terms of any
Permitted Lien encumbering such Real Property prohibits the granting of such
Mortgage.
(b) The security interests required to be granted pursuant to clause
(a) above shall be granted pursuant to mortgages, leasehold mortgages, deeds of
trust and leasehold deeds of trust, in each case satisfactory in form and
substance to the Agent and the Required Banks (each a "Mortgage" and,
collectively, the "Mortgages"), which Mortgages shall constitute valid and
enforceable perfected security interests prior to the rights of all third
Persons and subject to no other Liens except such Liens as are permitted by
Section 9.01. The Mortgages and other instruments related thereto shall be duly
recorded or filed in such manner and in such places and at such times as are
required by law to establish, perfect, preserve and protect the Liens, in favor
of the Collateral Agent for the benefit of the Secured Creditors, required to be
granted pursuant to the Mortgages and, all taxes, fees and other charges payable
in connection therewith shall be paid in full by the Borrower. At the time of
the execution and delivery of the Mortgages, Holdings shall cause to be
delivered to the Collateral Agent such opinions of counsel, mortgage policies,
title surveys, real estate appraisals and other related documents as may be
reasonably requested by the Agent or the Required Banks to assure themselves
that this Section 8.11(b) has been complied with.
(c) Holdings and the Borrower agree to cause each North American
Subsidiary established or created in accordance with Section 9.17 to execute and
deliver a counterpart to the Subsidiaries Guaranty and thereby becoming a
Subsidiary Guarantor party thereto.
(d) Holdings and the Borrower agree to pledge, and cause each of
their respective North American Subsidiaries to pledge, all of the capital stock
of each new Subsidiary (or 65% of the total combined voting power of all classes
of capital stock of any new Non-North American Subsidiary) established or
created by such Credit Party in accordance with Section 9.17 to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Pledge Agreement.
(e) Holdings and the Borrower will cause each North American
Subsidiary established or created in accordance with Section 9.17 to grant to
the Collateral Agent for the benefit of the Secured Creditors a first priority
Lien on all other property (tangible and intangible) of such North American
Subsidiary upon terms similar to those set forth in the
-56-
Security Agreement as appropriate, and satisfactory in form and substance to the
Agent and Required Banks.
(f) If following a change in the relevant sections of the Code, the
regulations and rules promulgated thereunder and any rulings issued thereunder
and at the request of the Agent or the Required Banks, counsel for Holdings
reasonably acceptable to the Agent does not within 30 days after such request
deliver a written opinion, in form and substance reasonably satisfactory to the
Agent or the Required Banks, as the case may be, with respect to any Foreign
Subsidiary that (i) a pledge (x) of 66-2/3% or more of the total combined voting
power of all classes of capital stock of such Foreign Subsidiary entitled to
vote and (y) of any promissory note issued by such Foreign Subsidiary to any
Credit Party or (ii) the entering into by such Foreign Subsidiary of a guaranty
in substantially the form of the Subsidiaries Guaranty, in either case would
cause the earnings of such Foreign Subsidiary to be treated as a deemed dividend
to such Foreign Subsidiary's United States parent, then in the case of a failure
to deliver the opinion described in clause (i) above, that portion of such
Foreign Subsidiary's outstanding capital stock or any promissory notes so issued
by such Foreign Subsidiary, in each case not theretofore pledged pursuant to the
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed) and in the case of a failure to
deliver the opinion described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver a guaranty and security agreement and mortgage in
respect of the Obligations substantially in the form of the Subsidiaries
Guaranty, the Security Agreement and a Mortgage meeting the requirements of
Section 8.11(b) (in each case as modified to reflect the requirements of local
law).
(g) The security interests required to be granted pursuant to this
Section 8.11 shall be granted pursuant to security documentation (which shall be
substantially similar to the Security Documents already executed and delivered
by Holdings or its Subsidiaries, as applicable) or otherwise satisfactory in
form and substance to the Agent and shall constitute valid and enforceable
perfected security interests prior to the rights of all third Persons and
subject to no other Liens except such Liens as are permitted by Section 9.01.
The Additional Security Documents and other instruments related thereto shall be
duly recorded or filed in such manner and in such places and at such times as
are required by law to establish, perfect, preserve and protect the Liens, in
favor of the Collateral Agent for the benefit of the respective Secured
Creditors, required to be granted pursuant to the Additional Security Documents
and all taxes, fees and other charges payable in connection therewith shall be
paid in full by the Credit Parties.
(h) Holdings and the Borrower will, and will cause each of their
respective Subsidiaries to, at their expense, make, execute, endorse,
acknowledge, file and/ or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney,
-57-
certificates, real property surveys, reports and other assurances or instruments
and take such further steps relating to the Collateral covered by any of the
Security Documents as the Collateral Agent may reasonably require pursuant to
this Section 8.11. Furthermore, Holdings and the Borrower shall cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance,
appraisals and other related documents as may be reasonably requested by the
Collateral Agent to assure itself that this Section 8.11 has been complied with.
(i) Holdings and the Borrower agree that each action required above
by this Section 8.11 shall be at their sole expense and shall be completed as
soon as possible, but in no event later than 90 days after such action is
requested to be taken by the Agent or the Required Banks, provided that Holdings
and the Borrower further agree that each action required by clauses (c), (d) or
(e) of this Section 8.11 with respect to any newly created or acquired
Subsidiary shall be completed within 10 days after the creation or acquisition
of such new Subsidiary.
8.12 Ownership of Subsidiaries. Holdings will at all times own 100%
-------------------------
of the outstanding capital stock of Newark. Newark will at all times own 100% of
the outstanding capital stock of the Borrower. Except (i) to the extent
otherwise expressly consented in writing by the Required Banks, (ii) as
permitted by Section 9.06(xv) or (iii) as set forth on Schedule VIII, Holdings
shall own directly or indirectly 100% of the capital stock of each of its
Subsidiaries.
8.13 Agent for Service of Process. Holdings hereby irrevocably
----------------------------
accepts its appointment as agent for the Borrower and each other Credit Party as
set forth in Section 13.08 of this Agreement and Section 14 of the Subsidiaries
Guaranty and agrees that it (i) shall inform the Agent promptly in writing of
any change of its address in the State of New York, (ii) shall notify the Agent
of any termination of any of the agency relationships created by Section 13.08
of this Agreement and Section 14 of the Subsidiaries Guaranty and (iii) shall
perform its obligations as such agent in accordance with the provisions of
Section 13.08 of this Agreement and Section 14 of the Subsidiaries Guaranty.
Holdings, as process agent, and its successor or successors agree to discharge
the above-mentioned obligations and will not refuse fulfillment of such
obligations under Section 13.08 of this Agreement or Section 14 of the
Subsidiaries Guaranty. Holdings agrees that it will maintain an office in New
York City, New York until such time as the Borrower and each other Credit Party
shall have entered into a letter agreement in the form of Exhibit K appointing
another agent for service of process in the State of New York, which agent shall
be acceptable to the Agent.
SECTION 9. Negative Covenants. Holdings and the Borrower hereby
------------------
covenant and agree that on and after the Restatement Effective Date and until
the Total
-58-
Revolving Loan Commitment and all Letters of Credit (other than Letters of
Credit subject to Section 2.01(e)) have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
9.01 Liens. Holdings will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible)
of Holdings or any of its Subsidiaries, whether now owned or hereafter acquired,
or sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided, that the provisions of this Section 9.01
--------
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles in the United
States (or the equivalent thereof in any country in which a Foreign
Subsidiary is doing business, as applicable);
(ii) Liens in respect of property or assets of Holdings or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of Holdings' or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of Holdings or such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Liens in existence on the Restatement Effective Date which are
listed, and the property subject thereto described, in Schedule XI, but
only to the respective date, if any, set forth in such Schedule XI for the
removal and termination of any such Liens, without giving effect to any
renewals and extensions thereof except in connection with any refinancing
or renewal of any Existing Indebtedness secured by such Liens as permitted
by Section 9.05(ii) so long as any such renewals or
-59-
extensions do not encumber any additional assets or properties of Holdings
or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the
business of Holdings or any of its Subsidiaries;
(vii) Liens upon assets subject to Capitalized Lease Obligations to
the extent permitted by Section 9.05(vi), provided, that (x) such Liens
--------
only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset
of Holdings or any Subsidiary of Holdings;
(viii) Liens placed upon equipment or machinery used in the ordinary
course of business of the Borrower or any other Subsidiary of Holdings at
the time of acquisition thereof by the Borrower or any such other
Subsidiary or within 60 days thereafter to secure Indebtedness incurred to
pay all or a portion of the purchase price thereof, provided, that (x) the
--------
aggregate outstanding principal amount of all Indebtedness secured by Liens
permitted by this clause (viii) shall not at any time exceed $5,000,000 and
(y) in all events, the Lien encumbering the equipment or machinery so
acquired does not encumber any other asset of the Borrower, such other
Subsidiary or Holdings;
(ix) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness and not materially interfering with the conduct
of the business of Holdings or any of its Subsidiaries;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases permitted under Section 9.04;
(xi) Liens arising out of judgments or awards in respect of which
Holdings or any of its Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review in respect of which there shall have been
secured a subsisting stay of execution pending such appeal or proceedings
provided that the aggregate amount of all such judgments or awards (and any
cash and the fair market
-60-
value of any property subject to such Liens) does not exceed $250,000 at
any time outstanding;
(xii) statutory and contractual landlords' liens under leases to which
Holdings or any of its Subsidiaries is a party;
(xiii) deposits made in the ordinary course of business (including,
without limitation, surety bonds, performance bonds and appeal bonds) to
secure the performance of tenders, statutory obligations (other than excise
taxes), bids, leases, contracts (other than repayment of Indebtedness) and
other similar obligations, provided that the aggregate amount of cash and
the value of non-cash collateral so deposited shall at no time exceed
$2,000,000, which amount may be increased to $5,000,000 if at the time such
additional deposits are required, the total Letter of Credit Outstanding
equals $25,000,000;
(xiv) Liens created by the Borrower or another Subsidiary of Holdings
to secure the Borrower's or such other Subsidiary's respective obligations
under performance or surety bonds issued to support such Person's
obligations under a specific wagering systems equipment contract or similar
contract so long as the only asset subject to such Liens is the Borrower's
or such other Subsidiary's rights and obligations under the specific
contract to which such performance or surety bond relates;
(xv) Liens securing the Borrower's obligations in respect of the
Permitted CTOTB Debt, provided that (x) such Indebtedness is permitted to
--------
be incurred pursuant to Section 9.05(x), (y) the aggregate outstanding
principal amount of all Indebtedness secured by Liens permitted by this
clause (xv) shall not at any time exceed the amount permitted by such
Section 9.05(x) and (z) in all events, the Liens securing such Indebtedness
shall encumber only the Real Property on which the Borrower's New Haven
Teletrack and/or Xxxxxxx Teletheatre is situated; and
(xvi) Liens not otherwise permitted pursuant to this Section 9.01 so
long as (x) such Liens do not secure Indebtedness for borrowed money and
(y) the value of the property subject to such Liens does not exceed
$1,500,000 in the aggregate at any time outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings
-------------------------------------------------------
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets
(other
-61-
than purchases or other acquisitions of inventory, materials, equipment and
intangible assets in the ordinary course of business) of any Person, except
that:
(i) each of the Borrower and the other Subsidiaries of Holdings may
in the ordinary course of business, sell, lease or otherwise dispose of any
assets which, in the reasonable judgment of such Person, are obsolete, worn
out or otherwise no longer useful in the conduct of such Person's business,
provided that (x) the aggregate Net Sale Proceeds of all assets subject to
such sales or other dispositions pursuant to this clause (i) shall not
exceed $2,500,000 in any fiscal year of Holdings and (y) no single asset
having Net Sale Proceeds greater than $500,000 shall be sold or disposed of
pursuant to this clause (i) without the prior written consent of the
Required Banks;
(ii) each of the Borrower and the other Subsidiaries of Holdings may
sell, lease or otherwise dispose of materials, equipment and other assets
in the ordinary course of business, provided that the aggregate Net Sale
Proceeds of all assets subject to sales or other dispositions pursuant to
this clause (ii) shall not exceed $1,000,000 in any fiscal year of
Holdings;
(iii) investments may be made to the extent permitted by Section 9.06;
(iv) each of Holdings and its Subsidiaries may lease (as lessee) real
or personal property in the ordinary course of business to the extent
permitted by Section 9.04 (so long as any such lease does not create a
Capitalized Lease Obligation except to the extent permitted by Section
9.05(vi));
(v) each of the Borrower and the other Subsidiaries of Holdings may
(x) make sales of inventory in the ordinary course of business and (y) in
addition to the sales permitted under Section 9.02(ii), make sales of
equipment and related software to its customers in the ordinary course of
business pursuant to the specific wagering systems equipment contracts or
similar contracts to which such Person is a party;
(vi) Capital Expenditures by the Borrower and the other Subsidiaries
of Holdings shall be permitted to the extent not in violation of Section
9.08;
(vii) with the prior written consent of the Required Banks, each of
Holdings and its Subsidiaries may acquire the assets constituting all or
any part of the business of any Person or the capital stock of any Person
(including any such acquisition by way of merger or consolidation); and
-62-
(viii) Holdings and its Subsidiaries may liquidate any Inactive
Subsidiary or merge any Inactive Subsidiary with and into another
Subsidiary of Holdings so long as such other Subsidiary is the surviving
corporation of such merger.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.02, such Collateral shall be sold free and clear of the Liens
created by the Security Documents, and the Agent and Collateral Agent shall be
authorized to take any actions deemed appropriate in order to effect the
foregoing.
9.03 Dividends. Holdings will not, and will not permit any of its
---------
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) any Wholly-Owned Subsidiary of the Borrower may pay Dividends to
the Borrower or any other Wholly-Owned Subsidiary of the Borrower;
(ii) any Wholly-Owned Subsidiary of Holdings (other than the Borrower
and its Subsidiaries) may pay Dividends to any other Wholly-Owned
Subsidiary of Holdings;
(iii) the Borrower may pay cash Dividends to Newark (which will in
turn immediately utilize the full amount of such Dividends to pay cash
Dividends to Holdings), and any other direct Wholly-Owned Subsidiary of
Holdings may pay cash Dividends to Holdings, in each case for the purpose
of paying, so long as all of the proceeds thereof are promptly used by
Holdings to pay, its operating expenses incurred in the ordinary course of
business and other corporate overhead costs and expenses (including,
without limitation, legal and accounting expenses and similar expenses),
provided that the aggregate amount of cash Dividends paid pursuant to this
clause (iii), together with the amount of intercompany loans made pursuant
to Section 9.06(x), does not exceed $1,500,000 in any fiscal year of
Holdings;
(iv) the Borrower may pay cash Dividends to Newark (which will in
turn immediately utilize the full amount of such Dividends to pay cash
Dividends to Holdings), and any other direct Wholly-Owned Subsidiary of
Holdings may pay cash Dividends to Holdings, in each case for the purpose
of enabling Holdings to make interest payments due on the Wellington
Subordinated Debt, so long as (w) no Default or Event of Default then
exists or would result therefrom, (x) such payments are otherwise permitted
to be made pursuant to the subordination provisions thereof, (y) the amount
of such Dividends, together with the amount of intercompany loans made
pursuant to Section 9.06(xi), does not exceed the amount
-63-
of interest then due and (z) all of the proceeds thereof are promptly used
by Holdings to make such interest payment, it being understood and agreed,
however, that no cash Dividends may be paid pursuant to this clause (iv)
with respect to the interest payment which is due on February 15, 1996 as
such interest payment will be paid solely through the issuance of shares of
Holdings Class A Common Stock;
(v) the Borrower may pay cash Dividends to Newark (which will in
turn immediately utilize the full amount of such Dividend to pay cash
Dividends to Holdings), and any other direct Wholly-Owned Subsidiary of
Holdings may pay cash Dividends to Holdings, in each case for the purpose
of paying, so long as all of the proceeds thereof are promptly used by
Holdings to pay, the purchase price for any acquisition or investment by
Holdings permitted to be made pursuant to Section 9.02(vii) or 9.06(xv), as
the case may be, provided that the aggregate amount of cash Dividends paid
pursuant to this clause (v), together with the amount of intercompany loans
made pursuant to Section 9.06(xii), does not exceed the purchase price for
the assets so acquired or the amount of the investment so made, as the case
may be, plus the reasonable costs and expenses (including legal fees and
expenses) associated therewith;
(vi) the Borrower may pay cash Dividends to Newark (which will in
turn immediately utilize the full amount of such Dividends to pay cash
Dividends to Holdings), and any other direct Wholly-Owned Subsidiary of
Holdings may pay cash Dividends to Holdings, in each case for the purpose
of enabling Holdings to pay the Dividends referred to clause (vii) of this
Section 9.03, so long as (x) no Default or Event of Default then exists or
would result therefrom, (y) the amount of such Dividends, together with the
amount of intercompany loans made pursuant to Section 9.06(xiii), does not
exceed $500,000 in any fiscal year of Holdings and (z) all of the proceeds
thereof are promptly used by Holdings to pay such Dividends;
(vii) Holdings may repurchase shares of its common stock and/or
options to purchase such common stock held by directors, executive
officers, members of management or employees of Holdings or any of its
Subsidiaries upon the death, disability, retirement or termination of
employment of such directors, executive officers, members of management or
employees, so long as (x) no Default or Event of Default then exists or
would result therefrom and (y) the aggregate amount of cash expended by
Holdings pursuant to this clause (vii) does not exceed $500,000 in any
fiscal year of Holdings;
(viii) any non-Wholly-Owned Subsidiary of Holdings may pay cash
Dividends on a pro rata basis to its shareholders generally; and
--- ----
-64-
(ix) any direct Domestic Subsidiary of Holdings may pay cash
Dividends to Holdings in any tax year of Holdings for the purpose of
paying, so long as all of the proceeds thereof are promptly used by
Holdings to pay, the amount of the tax liability of Holdings' consolidated
group in respect of such tax year, provided that the aggregate amount of
cash Dividends paid pursuant to this clause (ix), together with the amount
of intercompany loans made pursuant to Section 9.06(xvii), does not exceed
the Non-Autotote Systems Subgroup Tax Liability for the tax year in respect
of which such Dividends are paid.
9.04 Leases. Holdings will not permit the aggregate payments
------
(including, without limitation, any property taxes paid as additional rent or
lease payments) made by it and its Subsidiaries on a consolidated basis under
any agreement to rent or lease any real or personal property (or any extension
or renewal thereof) (excluding Capitalized Lease Obligations) to exceed
$13,000,000 for any fiscal year of Holdings.
9.05 Indebtedness. Holdings will not, and will not permit any of its
------------
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Existing Indebtedness shall be permitted to the extent the
same is listed on Schedule IX, provided that no refinancings or renewals
thereof shall be permitted except as expressly set forth on Schedule IX
and, in any event, any such refinancings and renewals shall not exceed the
principal amount of such Existing Indebtedness outstanding at the time of
such refinancing or renewal thereof;
(iii) accrued expenses and current trade accounts payable incurred in
the ordinary course;
(iv) Indebtedness under Interest Rate Protection Agreements relating
to Indebtedness otherwise permitted under this Section 9.05, provided that
--------
(x) the aggregate net exposure of Holdings and its Subsidiaries under all
such Interest Rate Protection Agreements, when added to the aggregate net
exposure under all Other Hedging Agreements entered into pursuant to
Section 9.06(v), shall not exceed $5,000,000 at any time outstanding and
(y) there are no upfront costs (other than administrative costs) or fees
associated with the entering into of any such Interest Rate Protection
Agreements;
(v) Indebtedness under Other Hedging Agreements to the extent
permitted by Section 9.06(v);
-65-
(vi) Indebtedness evidenced by Capitalized Lease Obligations so long
as the aggregate principal amount thereof does not exceed $5,000,000 at any
time outstanding;
(vii) Indebtedness subject to Liens permitted under Section
9.01(viii);
(viii) intercompany Indebtedness among Holdings and its Subsidiaries to
the extent permitted by Sections 9.06(vi) through (xiii), Section 9.06(xv)
and Sections 9.06(xvii) and (xviii);
(ix) Indebtedness of Holdings evidenced by the Wellington
Subordinated Debt in an aggregate principal amount not to exceed
$40,000,000 less any repayments of principal thereof;
(x) with the prior written consent of the Required Banks,
Indebtedness of the Borrower under the Permitted CTOTB Debt in an aggregate
principal amount not to exceed $12,000,000 less any repayments of principal
thereof;
(xi) Indebtedness under back-up letters of credit issued in
accordance with the terms of Section 2.01(e)(y); and
(xii) additional unsecured Indebtedness of Holdings and its
Subsidiaries in an aggregate principal amount not to exceed $1,000,000 at
any time outstanding, so long as at the time of incurrence thereof, no
Default or Event of Default shall exist or would result therefrom.
9.06 Advances, Investments and Loans. Holdings will not, and
-------------------------------
will not permit any of its Subsidiaries to, directly or indirectly, lend
money or credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person, or purchase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or
hold any cash or Cash Equivalents, except that the following shall be
permitted:
(i) Holdings and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary terms;
(ii) Holdings and its Subsidiaries may acquire and hold cash and Cash
Equivalents, provided (x) that during any time that Revolving Loans of
--------
Non-Defaulting Banks or Swingline Loans are outstanding, the aggregate
amount of cash and Cash Equivalents (including as cash or Cash Equivalents
for this purpose any
-66-
deposits made pursuant to Section 9.01(xiii)) permitted to be held by
Holdings and its Subsidiaries shall not exceed $10,000,000 for any period
of ten consecutive Business Days and (y) if at any time Holdings holds cash
or Cash Equivalents which exceed $1,000,000 in the aggregate for any period
of five consecutive Business Days, such excess shall be contributed on the
first Business Day following the fifth such consecutive Business Day to its
North American Subsidiaries in a manner determined by Holdings;
(iii) (x) Holdings and its Subsidiaries may make loans and advances
after the Restatement Effective Date in the ordinary course of business to
their respective employees so long as the aggregate principal amount of all
such loans and advances made after the Restatement Effective Date at any
time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $500,000 and (y)
Holdings and its Subsidiaries may keep outstanding the loans and advances
made to their respective officers prior to the Restatement Effective Date
pursuant to the Original Credit Agreement in an aggregate amount not to
exceed $750,000;
(iv) Holdings and its Subsidiaries may enter into Interest Rate
Protection Agreements to the extent permitted in Section 9.05(iv);
(v) the Borrower and the other Subsidiaries of Holdings may enter
into and perform their respective obligations under Other Hedging
Agreements in the ordinary course of business and consistent with past
practices so long as (x) any such Other Hedging Agreement is related to
income derived from foreign operations of the Borrower or any such other
Subsidiary of Holdings or otherwise related to purchases permitted
hereunder from foreign suppliers and (y) the aggregate net exposure amount
of the Borrower and all such other Subsidiaries under all such Other
Hedging Agreements, when added to the aggregate net exposure under all
Interest Rate Protection Agreements entered into pursuant to Section
9.05(iv), does not exceed $5,000,000 at any time outstanding;
(vi) Wholly-Owned North American Subsidiaries may make intercompany
loans to one another, provided that (x) each such intercompany loan is
evidenced by an intercompany note in the form of Exhibit L (each, an
"Intercompany Note") and (y) each Intercompany Note shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(vii) Wholly-Owned North American Subsidiaries may make intercompany
loans to any Wholly-Owned Non-North American Subsidiary, so long as the
aggregate principal amount thereof does not exceed $10,000,000 at any time
outstanding (determined without regard to any write-downs or write-offs
thereof);
-67-
(viii) Wholly-Owned Non-North American Subsidiaries may make
intercompany loans to one another;
(ix) Non-North American Subsidiaries may make intercompany loans
to Holdings and its North American Subsidiaries so long as each such
intercompany loan is subject to the terms of the subordination provisions
in the form of Exhibit M;
(x) North American Subsidiaries may make intercompany loans to
Holdings for the purposes set forth in Section 9.03(iii), so long as (x)
the amount of all such intercompany loans, together with the amount of all
cash Dividends paid pursuant to Section 9.03(iii), does not exceed
$1,500,000 in any fiscal year of Holdings, (y) all of the proceeds thereof
are promptly used by Holdings for such purposes and (z) all such
intercompany loans are evidenced by an Intercompany Note which shall be
pledged to the Collateral Agent pursuant to the Pledge Agreement;
(xi) North American Subsidiaries may make intercompany loans to
Holdings for the purposes set forth in Section 9.03(iv), so long as (v) no
Default or Event of Default then exists or would result therefrom, (w) such
payments by Holdings are otherwise permitted to the made pursuant to the
subordination provisions of the Wellington Subordinated Debt, (x) the
amount of such intercompany loans, together with the amount of cash
Dividends paid pursuant to Section 9.03(iv), does not exceed the amount of
interest then due on the Wellington Subordinated Debt, (y) all of the
proceeds thereof are promptly used by Holdings for such purposes and (z)
all such intercompany loans are evidenced by an Intercompany Note which
shall be pledged to the Collateral Agent pursuant to the Pledge Agreement;
(xii) North American Subsidiaries may make intercompany loans to
Holdings for the purposes set forth in Section 9.03(v), so long as (x) the
amount of such intercompany loans, together with the amount of cash
Dividends paid pursuant to Section 9.03(v), does not exceed the purchase
price for the assets so acquired or the amount of the investment so made,
as the case may be, plus the reasonable costs and expense (including legal
fees and expenses) associated therewith, (y) all of the proceeds thereof
are promptly used by Holdings to pay such purchase price and other costs
and expenses and (z) all such intercompany loans are evidenced by an
Intercompany Note which shall be pledged to the Collateral Agent pursuant
to the Pledge Agreement;
(xiii) North American Subsidiaries may make intercompany loans to
Holdings for the purposes set forth in Section 9.03(vii), so long as (w) no
Default or Event of Default then exists or would result therefrom, (x) the
amount of such intercompany loans, together with the amount of cash
Dividends paid pursuant to
-68-
Section 9.03(vi), does not exceed $500,000 in any fiscal year of Holdings,
(y) all of the proceeds thereof are promptly used by Holdings for such
purposes and (z) all such intercompany loans are evidenced by an
Intercompany Note which shall be pledged to the Collateral Agent pursuant
to the Pledge Agreement;
(xiv) Holdings and its Subsidiaries may acquire and hold the capital
stock of Subsidiaries in connection with stock acquisitions permitted under
Section 9.02(vii);
(xv) Holdings and its Subsidiaries may make additional loans,
advances and investments (other than loans and advances to their respective
employees) so long as (x) the aggregate amount of all such loans, advances
and investments at any time outstanding pursuant to this clause (xv)
(determined without regard to any write-downs or write-offs thereof) does
not exceed $1,000,000, and (y) in the case of the acquisition of any
capital stock of any Person pursuant to this clause (xv), the Person so
invested in is engaged in the type of business permitted pursuant to
Section 9.16(d) and to the extent such Person becomes a Subsidiary of
Holdings as a result of such investment, all of the provisions of Section
9.17 have been complied with at the time of such investment;
(xvi) Holdings and its Subsidiaries may hold non-cash consideration
consisting of promissory notes received in connection with asset sales
permitted under Sections 9.02(i) and (ii) so long as the aggregate
principal amount of all such promissory notes does not exceed $1,000,000 at
any time outstanding (determined without regard to any write-downs or
write-offs thereof);
(xvii) Domestic Subsidiaries of Holdings (other than the Borrower and
its Subsidiaries) may make intercompany loans to Holdings for the purposes
set forth in Section 9.03(ix), so long as (x) the amount of such
intercompany loans, together with the amount of cash Dividends paid
pursuant to Section 9.03(ix), does not exceed the Non-Autotote Systems
Subgroup Tax Liability for the tax year in which such intercompany loans
relate, (y) all of the proceeds thereof are promptly used by Holdings to
pay such taxes and (z) all such intercompany loans are evidenced by an
Intercompany Note which shall be pledged to the Collateral Agent pursuant
to the Pledge Agreement; and
(xviii) Holdings may continue to maintain outstanding the intercompany
loans made by it to Etag Electronic prior to the Restatement Effective Date
and Subsidiaries of Holdings may make additional intercompany loans to Etag
Electronic for the purpose of paying, and so long as all of the proceeds
thereof are promptly used by Etag Electronic to pay, the amounts required
to be made by it pursuant to the earn-out provisions set forth in the
purchase agreement (as in effect on the date hereof) pursuant to which Etag
Electronic was originally acquired by Holdings.
-69-
9.07 Transactions with Affiliates. Holdings will not, and will not
----------------------------
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would reasonably be obtained by Holdings or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section 9.03;
(ii) loans may be made and other transactions may be entered into
among Holdings and its Subsidiaries to the extent permitted by Sections
9.05 and 9.06;
(iii) payments may be made by the Borrower to Holdings pursuant to the
Tax Sharing Agreement; and
(iv) customary fees may be paid to non-officer directors of Holdings.
9.08 Capital Expenditures. (a) Holdings will not, and will not
--------------------
permit any of its Subsidiaries to, make any Capital Expenditures, except that
the Borrower and the other Subsidiaries of Holdings may make Capital
Expenditures not to exceed (x) $10,600,000 in Holdings' fiscal year ending
October 31, 1996 or (y) $10,000,000 in any fiscal year of Holdings thereafter.
(b) In addition to the Capital Expenditures permitted to be made
pursuant to preceding clause (a) and succeeding clause (c), the Borrower and the
other Subsidiaries of Holdings may make Capital Expenditures in an aggregate
amount not to exceed $10,000,000 in any fiscal year of Holdings in connection
with new contracts awarded to Subsidiaries of Holdings provided that, prior to
the acceptance of any such contract, Holdings shall first deliver to the Banks a
certificate of its chief financial officer or treasurer demonstrating (in
reasonable detail and showing the calculations therefor) (x) that based on good
faith projections prepared by Holdings, that Holdings will continue to be in
compliance with Sections 9.09 through 9.12, inclusive, for the one year period
immediately following the entering into of such contract and (y) the expected
profitability to such Subsidiary under such contract; and provided further, in
no event shall the Subsidiaries of Holdings bid or submit proposals for
contracts which if entered into by such Subsidiaries (and if all Capital
Expenditures required to perform such contract were made) would cause a
violation of this Section 9.08(b).
(c) In addition to the Capital Expenditures permitted to be made
pursuant to preceding clauses (a) and (b) of this Section 9.08 and following any
Recovery Event, Subsidiaries of Holdings may make Capital Expenditures to
replace or restore any
-70-
properties or assets subject to such Recovery Event so long as (i) the aggregate
amount of Capital Expenditures so made does not exceed the amount of insurance
proceeds (net of reasonable costs and taxes incurred in connection with such
Recovery Event and any amounts required to be applied (and are applied) to the
repayment of any Indebtedness secured by a prior perfected security interest (to
the extent permitted by this Agreement) in the property subject to such Recovery
Event) received (or to be received) in respect of such Recovery Event, (ii) such
Capital Expenditures are made within nine months following such Recovery Event,
(iii) such insurance proceeds are not required to be applied to repay
outstanding Term Loans pursuant to Section 4.02(e) and (iv) in event that any
such Subsidiary makes such Capital Expenditures prior to the receipt of such
insurance proceeds, Holdings or such Subsidiary actually receives such insurance
proceeds within nine months following the respective Recovery Event.
9.09 Consolidated Interest Coverage Ratio. Holdings will not permit
------------------------------------
the Consolidated Interest Coverage Ratio for any Test Period ended on the last
day of a fiscal quarter set forth below to be less than the ratio set forth
opposite such fiscal quarter below:
Fiscal Quarter
Ended Ratio
-------------- -----
January 31, 1996 1.40:1.00
April 30, 1996 1.50:1.00
July 31, 1996 1.80:1.00
October 31, 1996 1.95:1.00
January 31, 1997 2.00:1.00
April 30, 1997 2.10:1:00
July 31, 1997 2.25:1.00
October 31, 1997 2.50:1.00
January 31, 1998 2.75:1.00
9.10 Consolidated Fixed Charge Coverage Ratio. Holdings will not
----------------------------------------
permit the Consolidated Fixed Charge Coverage Ratio for any Test Period ended on
the last day of a fiscal quarter set forth below to be less than the ratio set
forth opposite such fiscal quarter below:
-71-
Fiscal Quarter
Ended Ratio
-------------- -----
July 31, 1996 1.00:1.00
October 31, 1996 1.00:1.00
January 31, 1997 1.00:1.00
April 30, 1997 1.00:1.00
July 31, 1997 1.00:1.00
October 31, 1997 1.00:1.00
January 31, 1998 1.00:1.00
9.11 Maximum Leverage Ratio. Holdings will not permit the Leverage
----------------------
Ratio at any time during a period set forth below to be greater than the ratio
set forth opposite such period below:
Period Ratio
------ -----
Restatement Effective Date through
and including January 31, 1996 5:50:1.00
Fiscal quarter ending April 30, 1996 4.85:1.00
Fiscal quarter ending July 31, 1996 4.50:1.00
Fiscal quarter ending October 31, 1996 4.10:1.00
Fiscal quarter ending January 31, 1997 3.85:1.00
Fiscal quarter ending April 30, 1997 3.15:1.00
Fiscal quarter ending July 31, 1997 3.00:1.00
Fiscal quarter ending October 31, 1997 3.00:1.00
Fiscal quarter ending January 31, 1998 3.00:1.00
9.12 Minimum Consolidated EBITDA. Holdings will not permit
---------------------------
Consolidated EBITDA for any Test Period ended on the last day of a fiscal
quarter set forth below to be less than the amount set forth opposite such
fiscal quarter below:
Fiscal Year Ending Amount
------------------ ------
January 31, 1996 $5,250,000
April 30, 1996 $12,750,000
July 31, 1996 $22,000,000
October 31, 1996 $32,000,000
January 31, 1997 $33,375,000
April 30, 1997 $36,500,000
-72-
July 31, 1997 $37,500,000
October 31, 1997 $40,000,000
January 31, 1998 $42,000,000
9.13 Limitation on Modifications of Indebtedness; Modifications of
-------------------------------------------------------------
Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.
------------------------------------------------------------------------
Holdings will not, and will not permit any of its Subsidiaries to:
(i) amend or modify, or permit the amendment or modification of, any
provision of the Existing Indebtedness, or of any agreement (including,
without limitation, any purchase agreement, indenture, loan agreement or
security agreement) relating thereto other than any amendments or
modifications to the foregoing which do not in any way adversely affect the
interests of the Banks;
(ii) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value
of, or any prepayment or redemption as a result of any asset sale, change
of control or similar event of the Wellington Subordinated Debt or amend or
modify, or permit the amendment or modification of, any provision of the
Wellington Subordinated Debt;
(iii) amend, modify or change its charter or other organizational
documents (including, without limitation, by the filing or modification of
any certificate of designation) or any agreement entered into by it, with
respect to its capital stock, or enter into any new agreement with respect
to its capital stock, other than any amendments, modifications or changes
pursuant to this clause (iii) or any such new agreements pursuant to this
clause (iii) which do not in any way adversely affect the interests of the
Banks, provided that in no event shall any amendments, modifications or
changes to the terms of Holdings' or its Subsidiaries' capital stock be
permitted, it being understood that in any event Holdings may increase the
authorized number of shares of its common stock; or
(iv) amend, modify or change the Tax Sharing Agreement, or enter into
any new tax sharing agreement or arrangement.
-73-
9.14 Limitation on Certain Restrictions on Subsidiaries. Holdings
--------------------------------------------------
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Holdings or any of its
Subsidiaries, or pay any Indebtedness owed to Holdings or any of its
Subsidiaries, (b) make loans or advances to Holdings or any of its Subsidiaries
or (c) transfer any of its properties or assets to Holdings or any of its
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of Holdings or any of its Subsidiaries,
(iv) customary provisions restricting assignment of any licensing agreement or
wagering systems equipment contract or similar contract entered into by Holdings
or any of its Subsidiaries in the ordinary course of business and (v)
restrictions prohibiting the transfer of any asset subject to a Lien permitted
under Section 9.01(iii), (vii), (viii), (xv) or (xvi).
9.15 Limitation on Issuance of Capital Stock. (a) Holdings will not
---------------------------------------
issue (i) any preferred stock (except Permitted Preferred Stock) or (ii) any
redeemable common stock.
(b) Holdings will not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except:
(i) for transfers and replacements of then outstanding shares of
capital stock;
(ii) for stock splits, stock dividends and additional issuances which
do not decrease the percentage ownership of Holdings or any of its
Subsidiaries in any class of the capital stock of such Subsidiary; and
(iii) to qualify directors to the extent required by applicable law.
All capital stock issued in accordance with this Section 9.15(b) shall, to the
extent required by the Pledge Agreement, be delivered to the Collateral Agent
for pledge pursuant to the Pledge Agreement.
9.16 Business. (a) Holdings will engage in no significant business
--------
activities and will have no significant assets or liabilities, other than its
ownership of the capital stock of its direct Subsidiaries (including
Subsidiaries acquired pursuant to Sections 9.02(vii) and 9.06(xv)) and
liabilities permitted to be incurred under this Agreement.
-74-
(b) Newark will engage in no significant business activities and will
have no significant assets or liabilities, other than its ownership of the
capital stock of its direct Subsidiaries (including Subsidiaries acquired
pursuant to Sections 9.02(vii) and 9.06(xv)) and liabilities permitted to be
incurred under this Agreement.
(c) Holdings will not permit any of its Subsidiaries to engage
(directly or indirectly) in any business other than the business in which
Holdings and its Subsidiaries are engaged on the Restatement Effective Date and
reasonable extensions thereof.
9.17 Limitation on Creation of Subsidiaries. Holdings will not, and
--------------------------------------
will not permit any of its Subsidiaries to, establish, create or acquire any
additional Subsidiaries other than (i) Wholly-Owned Subsidiaries or (ii) non-
Wholly-Owned Subsidiaries acquired pursuant to Section 9.06(xv). In connection
with any creation or acquisition of a Subsidiary, (x) the capital stock of such
Subsidiary shall be duly pledged and delivered to the Collateral Agent pursuant
to (and to the extent required by) the Pledge Agreement and (y) such Subsidiary
shall take all actions required to be taken by it pursuant to Section 8.11.
SECTION 10. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of any Loan or any Note or (ii) default, and such default
shall continue unremedied for two or more Business Days, in the payment when due
of any Unpaid Drawings or interest on any Loan or Note, or any Fees or any other
amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or
---------------------
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 Covenants. Holdings or the Borrower shall (i) default in the
---------
due performance or observance by it of any term, covenant or agreement contained
in Section 8.01(f)(ii), 8.11 or 8.12 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement and such default shall continue unremedied for a
period of 30 days after written notice to the Borrower by the Agent or any Bank;
or
10.04 Default Under Other Agreements. (i) Holdings or any of its
------------------------------
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in the instrument
or agreement
-75-
under which such Indebtedness was created or (y) default in the observance or
performance of any agreement or condition relating to any Indebtedness (other
than the Obligations) or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause (determined without regard to whether
any notice is required), any such Indebtedness to become due prior to its stated
maturity, or (ii) any Indebtedness (other than the Obligations) of Holdings or
any of its Subsidiaries shall be declared to be due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof, provided that it shall not be a Default or an Event of
--------
Default under this Section 10.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) and (ii) is at least
$1,000,000; or
10.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall
----------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against
Holdings or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Holdings or any of its
Subsidiaries, or Holdings or any of its Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings or any of
its Subsidiaries, or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days, or Holdings or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Holdings or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or
Holdings or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
-----
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or to be the subject of termination proceedings under ERISA, any Plan shall have
an Unfunded Current Liability, a contribution required to be made to a Plan has
not been timely made, Holdings, the Borrower, or any of their respective
Subsidiaries or any ERISA Affiliate has incurred or
-76-
is likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code, or Holdings or any of its
Subsidiaries has incurred or is likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA) which
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or employee pension benefit plans (as defined
in Section 3(2) of ERISA); and (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) which lien,
security interest or liability, in the reasonable opinion of the Required Banks,
could reasonably be expected to have a material adverse effect upon the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of Holdings, the Borrower or of Holdings and its Subsidiaries taken
as a whole; or
10.07 Security Documents. At any time after the execution and
------------------
delivery thereof, any of the Security Documents shall cease to be in full force
and effect (except pursuant to the terms thereof), or shall cease to give the
Collateral Agent for the benefit of the Secured Creditors the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on, all of the
Collateral), in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 9.01), and subject
to no other Liens (except as permitted by Section 9.01), or any Credit Party
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any of the
Security Documents and such default shall continue beyond any grace period
specifically applicable thereto pursuant to the terms of such Security Document;
or
10.08 Guaranty. Any Guaranty or any provision thereof shall cease to
--------
be in full force or effect as to the relevant Guarantor, or any Guarantor or
Person acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under the relevant Guaranty, or any Guarantor shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to its Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
---------
against Holdings or any of its Subsidiaries involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments exceeds $1,000,000; or
10.10 Change of Control. A Change of Control or Other Indebtedness
-----------------
Change of Control shall occur;
-77-
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written request of the Required
Banks, shall by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Agent, any Bank or the holder of
any Note to enforce its claims against any Credit Party (provided that, if an
--------
Event of Default specified in Section 10.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent to the Borrower as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Revolving Loan Commitment terminated, whereupon the Revolving Loan Commitment of
each Bank shall forthwith terminate immediately and any Commitment Commission
shall forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of and any accrued interest in respect of all Loans
and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Credit Party; (iii) terminate any Letter of Credit, which may be
terminated, in accordance with its terms; (iv) direct the Borrower to pay (and
the Borrower agrees that upon receipt of such notice, or upon the occurrence of
an Event of Default specified in Section 10.05 with respect to the Borrower,
it will pay) to the Collateral Agent at the Payment Office such additional
amount of cash, to be held as security by the Collateral Agent, as is equal to
the aggregate Stated Amount of all Letters of Credit issued for the account of
the Borrower and then outstanding; (v) enforce, as Collateral Agent, any or all
of the Liens and security interests created pursuant to the Security Documents;
and (vi) apply any cash collateral as provided in Section 4.02.
SECTION 11. Definitions and Accounting Terms.
--------------------------------
11.01 Defined Terms. As used in this Agreement, the following terms
-------------
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Additional Collateral" shall mean all property (whether real or
personal) in which security interests are granted (or have been purported to be
granted) (and continue to be in effect at the time of determination) pursuant to
Section 8.11.
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.11 with respect to Additional Collateral.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-
-78-
month maturity in the secondary market as published in the most recent Federal
Reserve System publication entitled "Select Interest Rates," published weekly on
Form H.15 as of the date hereof, or if such publication or a substitute
containing the foregoing rate information shall not be published by the Federal
Reserve System for any week, the weekly average offering rate determined by the
Agent on the basis of quotations for such certificates received by it from three
certificate of deposit dealers in New York of recognized standing or, if such
quotations are unavailable, then on the basis of other sources reasonably
selected by the Agent, by (y) a percentage equal to 100% minus the stated
maximum rate of all reserve requirements as specified in Regulation D applicable
on such day to a three-month certificate of deposit of a member bank of the
Federal Reserve System in excess of $100,000 (including, without limitation, any
marginal, emergency, supplemental, special or other reserves), plus (2) the then
daily net annual assessment rate as estimated by the Agent for determining the
current annual assessment payable by the Agent to the Federal Deposit Insurance
Corporation for insuring three-month certificates of deposit.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense)
and net non-cash losses which were included in arriving at Consolidated Net
Income for such period minus the sum of the amount of all net non-cash gains
(exclusive of items reflected in Adjusted Consolidated Working Capital) included
in arriving at Consolidated Net Income for such period, and adjusted to exclude
the amount of all gains from sales of assets other than sales of inventory in
the ordinary course of business.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non-Defaulting Bank, the percentage determined by dividing
such Bank's Revolving Loan Commitment at such time by the Adjusted Total
Revolving Loan Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments and the Adjusted Total Revolving Loan
Commitment at a time when the Total Revolving Loan Commitment or Adjusted Total
Revolving Loan Commitment, as the case may be, has been terminated shall be
references to the Revolving Loan Commitments or Adjusted Total Revolving Loan
Commitment, as the case may be, in effect immediately prior to such termination;
provided, that: (A) no Bank's Adjusted Percentage shall change upon the
--------
occurrence of a Bank Default from that in effect immediately prior to such Bank
Default if after giving effect to
-79-
such Bank Default, and any repayment of Revolving Loans and Swingline Loans at
such time pursuant to Section 4.02(a) or otherwise, the sum of (i) the aggregate
outstanding principal amount of Revolving Loans of all Non-Defaulting Banks plus
(ii) the aggregate outstanding principal amount of Swingline Loans plus (iii)
the Letter of Credit Outstandings, exceed the Adjusted Total Revolving Loan
Commitment; (B) the changes to the Adjusted Percentage that would have become
effective upon the occurrence of a Bank Default but that did not become
effective as a result of the preceding clause (A) shall become effective on the
first date after the occurrence of the relevant Bank Default on which the sum of
(i) the aggregate outstanding principal amount of the Revolving Loans of all
Non-Defaulting Banks plus (ii) the aggregate outstanding principal amount of
Swingline Loans plus (iii) the Letter of Credit Outstandings is equal to or less
than the Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-
Defaulting Bank's Adjusted Percentage is changed pursuant to the preceding
clause (B) and (ii) any repayment of such Bank's Revolving Loans, or of Unpaid
Drawings with respect to Letters of Credit or of Swingline Loans, that were made
during the period commencing after the date of the relevant Bank Default and
ending on the date of such change to its Adjusted Percentage must be returned to
the Borrower as a preferential or similar payment in any bankruptcy or similar
proceeding of the Borrower, then the change to such Non-Defaulting Bank's
Adjusted Percentage effected pursuant to said clause (B) shall be reduced to
that positive change, if any, as would have been made to its Adjusted Percentage
if (x) such repayments had not been made and (y) the maximum change to its
Adjusted Percentage would have resulted in the sum of the outstanding principal
of Revolving Loans made by such Bank plus such Bank's new Adjusted Percentage of
the outstanding principal amount of Swingline Loans and of Letter of Credit
Outstandings equalling such Bank's Revolving Loan Commitment at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any time the
Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments of
all Defaulting Banks.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.07 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; provided, however,
-------- -------
(x) that for purposes of Section 9.07, an Affiliate of Holdings shall include
any Person that directly or indirectly owns more than 5% of any class of the
capital stock of Holdings and any officer or director of Holdings or any such
Person and (y) in no event shall any Bank or any affiliate thereof be considered
an Affiliate of Holdings or any of its Subsidiaries. A Person shall be deemed
to control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.
-80-
"Agent" shall mean Bankers Trust Company, in its capacity as Agent for
the Banks hereunder, and shall include any successor to the Agent appointed
pursuant to Section 12.09.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed or replaced from time to
time.
"Applicable Commitment Commission Percentage" shall mean, at any time,
a percentage per annum equal to 1/2 of 1%.
"Applicable L/C Percentage" shall mean, at any time, a percentage per
annum equal to the Applicable Margin then in effect for Revolving Loans that are
maintained as Eurodollar Loans.
"Applicable Margin" shall mean a percentage per annum equal to (i) in
the case of A Term Loans, B Term Loans and Revolving Loans that are maintained
as Base Rate Loans and in the case of Swingline Loans, 2-1/4% and (ii) in the
case of A Term Loans, B Term Loans and Revolving Loans that are maintained as
Eurodollar Loans, 3-1/4%, in each case less the Interest Reduction Discount, if
any.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit N (appropriately
completed).
"A Term Loan" shall have the meaning provided in Section 1.01(a)(A).
"A Term Loan Maturity Date" shall mean November 1, 1997.
"Authorized Representative" of the Borrower shall mean any of the
President, the Chief Financial Officer, the Treasurer or any Assistant Treasurer
of Holdings (or any other officer of Holdings or any officer of the Borrower in
each case which are designated in writing to the Agent, BTCo and each Issuing
Bank by any of the foregoing officers of Holdings as being authorized to give
such notices under this Agreement) with the Borrower, by its execution and
delivery of this Agreement, irrevocably appointing any of the foregoing officers
of Holdings as its Authorized Representative hereunder with respect to
delivering Notices of Borrowing, Notices of Conversion, Letter of Credit
Requests and similar notices.
"Bank" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Bank" hereunder pursuant to 13.04(b).
"Bank Debt" shall mean, for any Test Period, the sum of (i) the
outstanding principal amount of Term Loans on the last day of such Test Period,
(ii) the daily average
-81-
outstanding principal amount of Revolving Loans and Swingline Loans during such
Test Period and (iii) the daily average Letter of Credit Outstandings during
such Test Period.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) or (ii) a Bank having notified in writing the Borrower
and/or the Agent that it does not intend to comply with its obligations under
Section 1.01(a)(C), Section 1.01(c) or Section 2, in each case whether as a
result of any takeover of such Bank by any regulatory authority or agency or
otherwise.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate and (ii) the Prime Lending
Rate.
"Base Rate Loan" shall mean each Swingline Loan and each other Loan
designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having commitments or obligations (other than
Defaulting Banks) of the respective Tranche (or from BTCo in the case of
Swingline Loans) on a given date (or resulting from a conversion or conversions
on such date) having in the case of Eurodollar Loans the same Interest Period,
provided that (i) Base Rate Loans incurred pursuant to Section 1.10(b) shall be
--------
considered part of the related Borrowing of Eurodollar Loans and (ii) each
Borrowing applicable to each of the Original Revolving A Loans and Original
Revolving B Loans outstanding on the Restatement Effective Date shall continue
to be applicable thereto as if the Original Credit Agreement had not been
amended and restated as herein provided (although such Original Revolving A
Loans and Original Revolving B Loans shall constitute A Term Loans, B Term Loans
and/or Revolving Loans, as the case may be, as provided for in this Agreement).
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"B Term Loan" shall have the meaning provided in Section 1.01(a)(B).
"B Term Loan Maturity Date" shall mean January 31, 1997.
-82-
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and, without duplication, the amount
of Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
--------
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof or the District of Columbia having (x) a long-term
unsecured debt rating of at least A or the equivalent thereof from S&P or A2 or
the equivalent thereof from Xxxxx'x and (y) capital, surplus and undivided
profits aggregating in excess of $200,000,000, with maturities of not more than
six months from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above, (iv) commercial paper issued by
any Person incorporated in the United States rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Xxxxx'x
and in each case maturing not more than one year after the date of acquisition
by such Person and (v) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (iv) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. (S) 9601 et seq.
-- ----
-83-
"Change of Control" shall mean (i) any "Person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding
Permitted Holders, (x) is or shall become the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
35% or more on a fully diluted basis of the voting and economic interests of
Holdings or shall have the right to elect a majority of the directors of
Holdings or (y) shall have obtained the power (whether or not exercised) to
elect a majority of the Board of Directors of Holdings or (ii) the Board of
Directors of Holdings shall cease to consist of a majority of Continuing
Directors.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
Properties, all cash and Cash Equivalents delivered as collateral pursuant to
Section 4.02 or 10 hereof and all Additional Collateral, if any.
"Collateral Agent" shall mean the Agent acting as collateral agent for
the Secured Creditors pursuant to the Security Documents.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consolidated Current Assets" shall mean, at any time, the aggregate
amount of all current assets (other than cash and Cash Equivalents) of Holdings
and its Consolidated Subsidiaries at such time.
"Consolidated Current Liabilities" shall mean, at any time, the
aggregate amount of all current liabilities of Holdings and its Consolidated
Subsidiaries at such time, but excluding the current portion of and accrued but
unpaid interest on any Indebtedness under this Agreement and any other long-term
Indebtedness which would otherwise be included therein.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income, before Consolidated Interest Expense and provision for taxes and without
giving effect to any extraordinary gains or losses or gains or losses from sales
of assets other than inventory sold in the ordinary course of business.
-84-
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation that were deducted in arriving at Consolidated EBIT for such
period.
"Consolidated Fixed Charge Coverage Ratio" for any period shall mean
the ratio of Consolidated EBITDA to Consolidated Fixed Charges for such period.
"Consolidated Fixed Charges" for any period shall mean the sum of,
without duplication, (i) Consolidated Interest Expense for such period, (ii) the
amount of all Capital Expenditures made by Holdings and its Consolidated
Subsidiaries for such period (other than Capital Expenditures made pursuant to
Section 9.08(c) for such period), (iii) the amount of all taxes paid by Holdings
and its Consolidated Subsidiaries for such period and (iv) the scheduled
principal amount of all amortization payments on all Indebtedness (including the
amount of all capitalized lease payments) of Holdings and its Subsidiaries for
such period (as determined on the first day of the respective period), provided,
that (x) for the Test Period ending on July 31, 1996, Consolidated Interest
Expense shall include the cash interest expense on the Wellington Subordinated
Debt for the period beginning on February 16, 1996 and ending on August 15,
1996, and (y) for the Test Period ending on January 31, 1997, Consolidated
Interest Expense shall include the cash interest expense on the Wellington
Subordinated Debt for the period beginning on August 16, 1996 and ending on
February 15, 1997; provided further, that there shall be excluded from
Consolidated Fixed Charges the amortization of deferred financing costs and fees
incurred in connection with this Agreement, the Original Credit Agreement and
the Wellington Subordinated Debt.
"Consolidated Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
"Consolidated Interest Expense" shall mean, for any period, the total
consolidated interest expense of Holdings and its Consolidated Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, with out duplication, that portion of Capitalized Lease
Obligations of Holdings and its Consolidated Subsidiaries representing the
interest factor for such period, but excluding any interest expense on the
Wellington Subordinated Debt that is paid in shares of Class A Common Stock of
Holdings.
"Consolidated Net Income" shall mean, for any period, the consolidated
net income of Holdings and its Consolidated Subsidiaries for such period;
provided, however, the net income of any Subsidiary of Holdings which is not a
Wholly-Owned Subsidiary and for which Holdings' investment therein is accounted
for by the equity method of accounting, shall have its net income included in
the Consolidated Net Income of Holdings and its Consolidated Subsidiaries only
to the extent of the amount of cash Dividends paid by such Subsidiary to
Holdings or a Wholly-Owned Subsidiary of Holdings.
-85-
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with generally accepted accounting
principles.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
-------- -------
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if the less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of Holdings on the
Restatement Effective Date and each other director, if such director's
nomination for election to the Board of Directors of Holdings is recommended by
a majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, each Note, each Security
Document and the Subsidiaries Guaranty and, after the execution and delivery
thereof, each additional guaranty or security document executed pursuant to
Section 8.11.
"Credit Event" shall mean (x) the occurrence of the Restatement
Effective Date and (y) the making of any Loan or the issuance of any Letter of
Credit.
"Credit Party" shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
-86-
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding on or
after the Restatement Effective Date (or any options or warrants issued by such
Person with respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for a consideration any shares of any class of the capital
stock of such Person outstanding on or after the Restatement Effective Date (or
any options or warrants issued by such Person with respect to its capital
stock). Without limiting the foregoing, "Dividends" with respect to any Person
shall also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Dollar Equivalent" shall mean, with respect to any currency other
than Dollars, the amount of Dollars into which such currency could be converted
at the Exchange Rate.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Holdings
incorporated or organized in the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Eligible Transferee" shall mean and include (i) a commercial bank
having total assets in excess of $1,000,000,000 or (ii) any other financial
institution or other "accredited investor" (as defined in Regulation D of the
Securities Act) approved by the Borrower (which approval shall not be
unreasonably withheld or delayed), provided that the Borrower's approval shall
not be so required in connection with any assignment of Terms Loans or upon the
occurrence and during the continuance of an Event of Default.
-87-
"End Date" shall have the meaning provided in the definition of
"Interest Reduction Discount."
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment relating to the environment, employee health
and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA;
the Federal Water Pollution Control Act, 33 U.S.C. (S) 1251 et seq.; the Toxic
-- ----
Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the Clean Air Act, 42 U.S.C.
-- ----
(S) 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. (S) 3803 et seq.; the
-- ---- -- ----
Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq.; the Emergency Planning
-- ----
and the Community Right-to-Know Act of 1986, 42 U.S.C. (S) 11001 et seq., the
-- ----
Hazardous Material Transportation Act, 49 U.S.C. (S) 1801 et seq. and the
-- ----
Occupational Safety and Health Act, 29 U.S.C. (S) 651 et seq. (to the extent it
-- ----
regulates occupational exposure to Hazardous Materials); and any state and local
or foreign counterparts or equivalents, in each case as amended from time to
time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings, the Borrower or any of their respective
Subsidiaries would be deemed to be a "single employer" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
-88-
"Etag Electronic" shall mean Etag Electronic Totalisator AG, a Swiss
corporation.
"Eurodollar Loan" shall mean each Loan (other than a Swingline Loan)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period applicable to such Eurodollar Loan commencing two Business Days
thereafter as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period, divided (and rounded off
to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Excess Cash Flow" shall mean (x) with respect to Holdings' fiscal
year ending October 31, 1996, the greater of (A) the amount of Consolidated
EBITDA (adjusted to exclude therefrom the amount of all gains from sales of
assets other than sales of inventory in the ordinary course of business) in
excess of $36,000,000 for such fiscal year and (B) the amount of Excess Cash
Flow (determined in accordance with the provisions of clause (y) of this
definition) for such fiscal year in excess of $2,000,000, and (y) with respect
to each fiscal year of Holdings thereafter, the remainder of (i) the sum of (I)
Adjusted Consolidated Net Income for such fiscal year and (II) the decrease, if
any, in Adjusted Consolidated Working Capital from the first day to the last day
of such fiscal year, minus (ii) the sum of (I) the amount of Capital
Expenditures (to the extent not financed with Indebtedness or equity proceeds or
made with insurance proceeds to the extent permitted pursuant to Section
9.08(c)) made by Holdings and its Consolidated Subsidiaries during such fiscal
year, (II) the aggregate principal amount of permanent principal payments of
Indebtedness for borrowed money of Holdings and its Consolidated Subsidiaries
(other than repayments of Loans, provided that repayments of Loans shall be
--------
deducted in determining Excess Cash Flow if such repayments were (a) required as
a result of a Scheduled Repayment under Section 4.02(b) or (b) made as a
voluntary prepayment with internally generated funds (but in the case of a
voluntary prepayment of Revolving Loans or Swingline Loans, only to the extent
accompanied by a voluntary reduction to the Total Revolving Loan Commitment))
during such fiscal year and (III) the increase, if any, in
-89-
Adjusted Consolidated Working Capital from the first day to the last day of such
fiscal year.
"Excess Cash Payment Date" shall mean the earlier of (i) the date
occurring 90 days after the last day of each fiscal year of Holdings (beginning
with its fiscal year ending October 31, 1996) and (ii) the date of delivery of
the financial statements pursuant to Section 8.01(c) for such fiscal year
(beginning with Holdings' fiscal year ending October 31, 1996).
"Excess Cash Payment Period" shall mean with respect to the repayment
required on each Excess Cash Payment Date, the immediately preceding fiscal year
of Holdings.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Rate" shall mean, when converting any amount denominated in
a currency other than Dollars into Dollars, the rate determined in good faith by
BTCo at the opening of business (or close of business in the case of
determinations of reimbursement obligations with respect to Drawings) in New
York, on the date as to which any determination thereof is to be made, as the
spot rate at which such currency is offered for sale to BTCo against delivery of
Dollars by BTCo. If for any reason the Exchange Rate for any currency cannot be
calculated as provided above, BTCo shall calculate the Exchange Rate on such
basis as it deems fair and equitable. In determining the Stated Amount of any
Letter of Credit (A) for purposes of Sections 1.01(a)(C), 1.01(b), 2.01(d) and
4.02(a), the Exchange Rate shall be calculated (x) on the date of the issuance
of such Letter of Credit, (y) on the first Business Day of each calendar month
thereafter and (z) on such other day as BTCo may, in its sole discretion,
consider appropriate and (B) for purposes of Sections 3.01(b) and (c), the
Exchange Rate shall be calculated on the first Business Day of each month in the
quarterly period in which the respective payment is due pursuant to said
Sections. The Exchange Rate for all reimbursement obligations with respect to
Letters of Credit (including without limitation pursuant to Sections 2.04 and
2.05) shall be determined by using the Exchange Rate as in effect on the date
the respective Unpaid Drawing was paid by such Issuing Bank.
"Existing Indebtedness" shall have the meaning provided in Section
7.21.
"Existing Letters of Credit" shall have the meaning provided in
Section 2.01(a).
"Facing Fee" shall have the meaning provided in Section 3.01(c).
-90-
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Final Maturity Date" shall mean April 30, 1998.
"Foreign Subsidiary" shall mean any Subsidiary of Holdings that is not
a Domestic Subsidiary.
"Former Bank" shall have the meaning provided in Section 13.04(c).
"Guaranteed Obligations" shall mean all obligations of the Borrower
(i) to the Agent and each Bank for the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of the principal and
interest on each Note issued by the Borrower to such Bank, and Loans made, under
the Credit Agreement and all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit, together with all the other obligations and
liabilities (including, without limitation, indemnities, fees and interest
thereon) of the Borrower to the Agent or such Bank now existing or hereafter
incurred under, arising out of or in connection with this Agreement or any other
Credit Document and the due performance and compliance with all the terms,
conditions and agreements contained in the Credit Documents by the Borrower and
(ii) to each Bank and each Affiliate of a Bank which enters (or has entered)
into an Interest Rate Protection Agreement or an Other Hedging Agreement with
Holdings or any of its Subsidiaries (even if such Bank ceases to be a Bank
hereunder for any reason, so long as such Bank or Affiliate thereof participates
in the extension of such Interest Rate Protection Agreement or Other Hedging
Agreement, and their subsequent assigns, if any), the full and prompt payment
when due (whether by acceleration or otherwise) of all obligations of Holdings
or such Subsidiary owing under any such Interest Rate Protection Agreement or
such Other Hedging Agreement, whether now in existence or hereafter arising, and
the due performance and compliance with all terms, conditions and agreements
contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
-91-
"Guaranty" shall mean the Holdings Guaranty, the Subsidiaries Guaranty
and any guaranty executed and delivered pursuant to Section 8.11.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, exposure to which is prohibited, limited
or regulated by any governmental authority under Environmental Laws.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Guaranty" shall mean the guaranty issued by Holdings
pursuant to Section 14.
"Inactive Subsidiary" shall mean any Subsidiary of Holdings (other
than the Borrower) that does not have any significant assets or liabilities
(contingent or otherwise) or has not had revenues in excess of $250,000 in the
12 month period ending on the date of such liquidation.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (to the extent of the value of the respective
property), (iv) the aggregate amount required to be capitalized under leases
under which such Person is the lessee, (v) all obligations of such person to pay
a specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
----
Obligations of such Person and (vii) all obligations under any Interest Rate
Protection Agreement or any Other Hedging Agreement or under any similar type of
agreement.
"Intercompany Note" shall have the meaning provided in Section
9.06(vi).
-92-
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate floor agreement or other similar agreement or
arrangement.
"Interest Reduction Discount" shall mean initially zero (except as
provided in clause (i) of the final sentence of this definition) and from and
after the first day of any Margin Reduction Period (the "Start Date") to and
including the last day of such Margin Reduction Period (the "End Date"), the
Interest Reduction Discount, if any, for such Margin Reduction Period shall be
the applicable percentage set forth in clause (A), (B), (C) or (D) below based
on the satisfaction of the applicable conditions in such clauses below:
(A) 1/4 of 1% if, but only if, as of the respective Test Date set
forth below in this clause (A) for such Start Date the applicable condition
set forth below in this clause (A) is met and none of clauses (B), (C) or
(D) below are applicable for such Test Date:
(i) the Leverage Ratio for the Test Period ending on April
30, 1996 is less than 4.80:1.00;
(ii) the Leverage Ratio for the Test Period ending on
July 31, 1996 is less than 4.30:1.00;
(iii) the Leverage Ratio for the Test Period ending on
October 31, 1996 is less than 3.85:1.00;
(iv) the Leverage Ratio for the Test Period ending on January
31, 1997 is less than 3.60:1.00;
(v) the Leverage Ratio for the Test Period ending on April
30, 1997 is less than 3.00:1.00;
(vi) the Leverage Ratio for the Test Period ending on July 31,
1997 is less than 2.70:1.00;
(vii) the Leverage Ratio for the Test Period ending on October
31, 1997 is less than 2.70:1.00; or
-93-
(viii) the Leverage Ratio for the Test Period ending on January
31, 1998 is less than 2.70:1.00;
(B) 1/2 of 1% if, but only if, as of the respective Test Date set
forth below in this clause (B) for such Start Date the applicable condition
set forth below in this clause (B) is met and neither clause (C) or (D)
below is applicable for such Test Date:
(i) the Leverage Ratio for the Test Period ending on April
30, 1996 is less than 4.70:1.00;
(ii) the Leverage Ratio for the Test Period ending on
July 31, 1996 is less than 4.15:1.00;
(iii) the Leverage Ratio for the Test Period ending on October
31, 1996 is less than 3.75:1.00;
(iv) the Leverage Ratio for the Test Period ending on January
31, 1997 is less than 3.45:1.00;
(v) the Leverage Ratio for the Test Period ending on April
30, 1997 is less than 2.85:1.00;
(vi) the Leverage Ratio for the Test Period ending on July 31,
1997 is less than 2.55:1.00;
(vii) the Leverage Ratio for the Test Period ending on October
31, 1997 is less than 2.55:1.00; or
(viii) the Leverage Ratio for the Test Period ending on January
31, 1998 is less than 2.55:1.00;
(C) 3/4 of 1% if, but only if, as of the respective Test Date set
forth below in this clause (C) for such Start Date the applicable condition
set forth below in this clause (C) is met and clause (D) below is not
applicable for such Test Date:
(i) the Leverage Ratio for the Test Period ending on April
30, 1996 is less than 4.50:1.00;
-94-
(ii) the Leverage Ratio for the Test Period ending on July 31,
1996 is less than 4.00:1.00;
(iii) the Leverage Ratio for the Test Period ending on October
31, 1996 is less than 3.50:1.00;
(iv) the Leverage Ratio for the Test Period ending on January
31, 1997 is less than 3.25:1.00;
(v) the Leverage Ratio for the Test Period ending on April
30, 1997 is less than 2.70:1.00;
(vi) the Leverage Ratio for the Test Period ending on July 31,
1997 is less than 2.45:1.00;
(vii) the Leverage Ratio for the Test Period ending on October
31, 1997 is less than 2.45:1.00; or
(viii) the Leverage Ratio for the Test Period ending on January
31, 1998 is less than 2.45:1.00;
(D) 1% if, but only if, as of the respective Test Date set forth below
in this clause (D) for such Start Date the applicable condition set forth
below in this clause (D) is met:
(i) the Leverage Ratio for the Test Period ending on April
30, 1996 is less than 4.30:1.00;
(ii) the Leverage Ratio for the Test Period ending on July 31,
1996 is less than 3.70:1.00;
(iii) the Leverage Ratio for the Test Period ending on October
31, 1996 is less than 3.20:1.00;
(iv) the Leverage Ratio for the Test Period ending on January
31, 1997 is less than 2.96:1.00;
(v) the Leverage Ratio for the Test Period ending on April
30, 1997 is less than 2.45:1.00;
(vi) the Leverage Ratio for the Test Period ending on July 31,
1997 is less than 2.20:1.00;
-95-
(vii) the Leverage Ratio for the Test Period ending on October
31, 1997 is less than 2.20:1.00; or
(viii) the Leverage Ratio for the Test Period ending on January
31, 1998 is less than 2.20:1.00.
Notwithstanding anything to the contrary above in this definition, (i) except as
otherwise provided in succeeding clause (ii), the Interest Reduction Discount
will be 3/4 of 1% until the delivery of the financial statements pursuant to
Section 8.01(b) in respect of Holdings' fiscal quarter ending April 30, 1996 and
(ii) the Interest Reduction Discount will be reduced to zero at all times when
there shall exist a Default or an Event of Default.
"Issuing Bank" shall mean BTCo and any Bank which at the request of
the Borrower and with the consent of the Agent agrees, in such Bank's sole
discretion, to become an Issuing Bank for the purpose of issuing Letters of
Credit pursuant to Section 2. The sole Issuing Bank on the Restatement Effective
Date is BTCo.
"January 1996 Warrant Agreement" shall have the meaning provided in
Section 5.02(ii).
"July 1995 Agreement" shall have the meaning provided in Section
3.01(e).
"L/C Supportable Indebtedness" shall mean (i) obligations of Holdings
and its Subsidiaries incurred in the ordinary course of business with respect to
insurance obligations and workers' compensation, surety bonds, performance bonds
and other similar statutory obligations and (ii) such other obligations of
Holdings or any of its Subsidiaries as are reasonably acceptable to the Agent
and the respective Issuing Bank and otherwise permitted to exist pursuant to the
terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
-96-
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any time for the determination
thereof, the ratio of Bank Debt at such time to Consolidated EBITDA for the Test
Period last ended.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each A Term Loan, each B Term Loan, each Revolving
Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Reduction Period" shall mean each period which shall commence
on a date on which the financial statements are delivered pursuant to Section
8.01(b) or (c) and which shall end on the earlier of (i) the date of actual
delivery of the next financial statements pursuant to Section 8.01(b) or (c) and
(ii) the latest date on which the next financial statements are required to be
delivered pursuant to Section 8.01(b) or (c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Maturity Date" shall mean the A Term Loan Maturity Date, the B Term
Loan Maturity Date, the Final Maturity Date or the Swingline Expiry Date, as
applicable.
"Maximum Swingline Amount" shall mean $5,000,000.
"Minimum Borrowing Amount" shall mean (i) in the case of A Term Loans
that are maintained as (x) Eurodollar Loans, $1,000,000 and (y) Base Rate
Loans, $500,000, (ii) in the case of B Term Loans that are maintained as (x)
Eurodollar Loans, $1,000,000 and (y) Base Rate Loans, $500,000, (iii) in the
case of Revolving Loans that are maintained as Eurodollar Loans or Base Rate
Loans, $1,000,000 and (iv) in the case of Swingline Loans, $500,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall have the meaning provided in Section 8.11(b).
-97-
"Mortgaged Property" shall have the meaning provided in Section
8.11(a).
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of reasonable transaction costs and
payments of unassumed liabilities relating to the assets sold at the time of, or
within 30 days after, the date of such asset sale, the amount of such gross cash
proceeds required to be used to repay any Indebtedness (other than Indebtedness
of the Banks pursuant to this Agreement) which is secured by the respective
assets which were sold, and the estimated marginal increase in income taxes
which will be payable by Holdings' consolidated group with respect to the fiscal
year in which the asset sale occurs as a result of such asset sale.
"Newark" shall mean Newark Holdings, Inc., a Delaware corporation.
"Non-Autotote Systems Subgroup Tax Liability" for any tax year shall
mean an amount equal to the Holdings Group Tax Liability less the Autotote
Systems Subgroup Tax Liability for such tax year (as such terms are defined in
the Tax Sharing Agreement).
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Non-North American Subsidiary" shall mean each Subsidiary of Holdings
that is incorporated under the laws of any jurisdiction other than (i) the
United States or any State or territory thereof, (ii) Canada or (iii) the United
Mexican States or any political subdivision thereof.
"North American Subsidiary" shall mean (i) each Domestic Subsidiary
and (ii) each Subsidiary of Holdings incorporated or organized in Canada or in
the United Mexican States or any political subdivision thereof.
"Note" shall mean each A Term Note, each B Term Note, each Revolving
Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Agent located at 000
Xxxxxxx Xxxxxx, 00xx Floor, Commercial Loan Division, New York, New York 10006,
Attention: Kiuli Chan, or such other office as the Agent may hereafter designate
in writing as such to the other parties hereto.
-98-
"Obligations" shall mean all amounts owing to the Agent, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Original Credit Agreement" shall have the meaning provided in the
first WHEREAS clause of this Agreement.
"Original Revolving A Loans" shall mean each Revolving A Loan made
under, and as defined in, the Original Credit Agreement.
"Original Revolving B Loans" shall mean each Revolving B Loan made
under, and as defined in, the Original Credit Agreement.
"Other Hedging Agreement" shall mean any foreign exchange contracts
and currency swap agreements.
"Other Indebtedness Change of Control" shall mean any "change of
control" or similar event (including, but not limited to, any "risk event")
under the Wellington Subordinated Debt.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office as the Agent
may hereafter designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Revolving Loan Commitment of such
Bank at such time and the denominator of which is the Total Revolving Loan
Commitment at such time; provided, that if the Percentage of any Bank is to be
--------
determined after the Total Revolving Loan Commitment has been terminated, then
the Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted CTOTB Debt" shall mean financing to be incurred to either
improve the Borrower's facilities known as the New Haven Teletrack and/or
Xxxxxxx Teletheatre located in New Haven and Windsor Locks, Connecticut,
respectively, or refinance any Indebtedness originally incurred in connection
with the acquisition or improvement of such facilities, it being understood that
such Permitted CTOTB Debt may only be incurred with the prior written consent of
the Required Banks.
-99-
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Agent in its reasonable discretion.
"Permitted Holders" shall mean Xxxxxx X. Xxx Company (or any Person
wholly-owned or controlled by Xxxxxx X. Xxx Company (a "TH Xxx Company") or any
fund or trust for which the Xxxxxx X. Xxx Company or a TH Xxx Company acts as
investment advisor or over which Xxxxxx X. Xxx Company or a TH Xxx Company has
voting control), Xxxxx X. Xxxxxxxx (or Xxxxxxxx, Xxxxxxx Xxxxxx & Xxxxx, a New
York limited partnership of which Xxxxx X. Xxxxxxxx is the general partner) and
A. Xxxxx Xxxx (or the 1989 Xxxxx Xxxx Trust).
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Permitted Preferred Stock" shall mean any preferred stock of Holdings
the terms of which (i) do not contain any mandatory put, redemption, sinking
fund or other similar provisions; (ii) do not require the payment of cash
Dividends; (iii) do not contain any covenants (other than periodic reporting
requirements); (iv) do not grant the holders thereof any voting rights except
for (x) voting rights required to be granted to such holders under applicable
law and (y) limited customary voting rights on fundamental matters such as a
merger or liquidation involving Holdings; and (v) are otherwise acceptable to
the Required Banks.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan, as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of), Holdings, the Borrower or any
of their respective Subsidiaries or an ERISA Affiliate, and each such plan for
the five year period immediately following the latest date on which Holdings,
the Borrower or any of their respective Subsidiaries or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall mean the Amended and Restated Pledge
Agreement, dated as of October 31, 1991, and amended and restated as of April
28, 1994, among the Credit Parties party thereto and the Collateral Agent, as
the same may be amended, modified or supplemented from time to time.
-100-
"Pledge Agreement Collateral" shall mean all "Collateral" as defined
in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as defined in
the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Projections" shall have the meaning provided in Section 7.05(d).
"Quarterly Payment Date" shall mean the last Business Day of each
January, April, July and October.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
-- ----
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable (i) by
reason of theft, loss, physical destruction or damage or any other similar event
with respect to any property or assets of Holdings or any of its Subsidiaries
and (ii) under any policy of insurance required to be maintained under Section
8.03.
"Register" shall have the meaning provided in Section 13.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
-101-
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, emptying, seeping, placing,
pouring and the like, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Required Banks" shall mean (A) except as provided in clause (B) of
this definition, (x) at any time when four or more Banks are party to this
Agreement, at least three Non-Defaulting Banks and (y) at all other times, one
or more Non-Defaulting Banks, in each case the sum of whose outstanding Term
Loans and Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and Adjusted Percentage of Swingline Loans and
Letter of Credit Outstandings) represent an amount greater than 50% of the sum
of all outstanding Term Loans of Non-Defaulting Banks and the Adjusted Total
Revolving Loan Commitment (or after the termination thereof, the sum of the then
total outstanding Revolving Loans of Non-Defaulting Banks and the aggregate
Adjusted Percentages of all Non-Defaulting Banks of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time) and (B) with
respect to (i) any amendment, modification or waiver of this clause (B), (ii)
any amendment, modification or waiver of Section 9.09, 9.10, 9.11 or 9.12 or
(iii) any amendment, modification or waiver of the condition precedent to
additional Credit Events under Section 6.01(i) relating to any Default or Event
of Default under Section 10.03 with respect to Section 9.09, 9.10, 9.11 or 9.12
or under Section 10.01, one or more Non-Defaulting Banks the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Adjusted Percentage of Swingline Loans
and Letter of Credit Outstandings) represent an amount greater than 59% of the
sum of all outstanding Term Loans of Non-Defaulting Banks and the Adjusted Total
Revolving Loan Commitment (or after the termination thereof, the sum of the then
total outstanding Revolving Loans of
-102-
Non-Defaulting Banks and the aggregate Adjusted Percentages of all Non-
Defaulting Banks of the total outstanding Swingline Loans and Letter of Credit
Outstandings at such time).
"Restatement Effective Date" shall have the meaning provided in
Section 13.10.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I hereto directly below the column
entitled "Revolving Loan Commitment," as same may be reduced from time to time
pursuant to Sections 3.02, 3.03 and/or 10.
"Revolving Loans" shall have the meaning provided in Section
1.01(a)(C).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"S&P" shall mean Standard & Poor's Corporation.
"Scheduled A Repayment" shall have the meaning provided in Section
4.02(b)(i).
"Scheduled B Repayment" shall have the meaning provided in Section
4.02(b)(ii).
"Scheduled Repayment" shall mean any Scheduled A Repayment or any
Scheduled B Repayment.
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Section 4.02.(f) Equity Proceeds" shall mean any cash proceeds (net
of underwriting or placement discounts and commissions and other reasonable
costs associated therewith) received on or after the Restatement Effective Date
by Holdings or any of its Subsidiaries from any capital contribution or any sale
or issuance of its equity, excluding (i) any such proceeds received by any
Subsidiary of Holdings to the extent contributed to such Subsidiary by Holdings
or by any other Subsidiary of Holdings, (ii) any such proceeds received from the
exercise of any warrants issued to any Bank (or any affiliate thereof) pursuant
to the January 1996 Warrant Agreement or the September 1995 Warrant Agreement
and (iii) up to $100,000 of such proceeds in any fiscal year of Holdings that
are
-103-
received from the exercise of options held by employees or former employees of
Holdings or any of its Subsidiaries; provided that the first $5,000,000 of such
proceeds (excluding proceeds of the type described in clauses (i), (ii) and
(iii) above) shall not constitute Section 4.02(f) Equity Proceeds.
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended and
the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Amended and Restated Security
Agreement, dated as of October 31, 1991, and amended and restated as of April
28, 1994, among the Credit Parties party thereto and the Collateral Agent, as
the same may be amended, modified or supplemented from time to time.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Document" shall mean and include the Pledge Agreement, the
Security Agreement, each Mortgage and, after the execution and delivery thereof,
each Additional Security Document.
"September 1995 Warrant Agreement" shall mean the Warrant Agreement,
dated as of September 14, 1995, among Holdings and the initial holders party
thereto.
"Signing Bank" shall have the meaning provided in Section 13.18.
"SJC Video Corporation" shall mean SJC Video Corporation, a Delaware
Corporation.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Start Date" shall have the meaning provided in the definition of
"Interest Reduction Discount."
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met); provided that
--------
the "Stated Amount" of each Letter of Credit denominated in a currency other
than Dollars shall be, on any date of calculation, the Dollar Equivalent of the
maximum amount available to be
-104-
drawn in the respective currency thereunder (determined without regard to
whether any conditions to drawing could then be met).
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partner ship, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiaries Guaranty" shall mean the Amended and Restated Subsidiary
and Affiliate Guaranty, dated as of October 31, 1991, and amended and restated
as of April 28, 1994, made by the Subsidiary Guarantors and accepted by the
Agent, as the same may be amended, modified or supplemented from time to time.
"Subsidiary Guarantor" shall mean each North American Subsidiary of
Holdings (other than the Borrower and SJC Video Corporation (but, in the case of
SJC Video Corporation, only so long as such Person is not a Wholly-Owned
Subsidiary of Holdings)) and each Foreign Subsidiary of Holdings which is
required to execute a guaranty after the Restatement Effective Date pursuant to
Section 8.11.
"Substitute Bank" shall have the meaning provided in Section 13.04(c).
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Final Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Tax Sharing Agreement" shall mean the Tax Sharing Agreement, dated as
of April 28, 1994, between Holdings and the Borrower.
"Term Loan" shall mean and include each A Term Loan and each B Term
Loan.
"Test Date" shall mean, as it relates to any Start Date, the last day
of the most recent fiscal quarter of Holdings ended immediately prior to such
Start Date.
-105-
"Test Period" shall mean (i) for any determination (other than any
determination made pursuant to Sections 9.10 and 9.11) made on and prior to July
31, 1996, the period from November 1, 1995 to the last day of the fiscal quarter
of Holdings then last ended (taken as one accounting period), and (ii) for any
determination made thereafter (and for any determination made pursuant to
Sections 9.10 and 9.11), the four consecutive fiscal quarters of Holdings then
last ended (taken as one accounting period).
"Total Revolving Loan Commitment" shall mean, at any time, the sum of
the Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time,
an amount equal to the remainder of (x) the then Total Revolving Loan Commitment
less (y) the sum of the aggregate principal amount of Revolving Loans and
Swingline Loans then outstanding plus the then aggregate amount of Letter of
Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Tranche" shall mean the respective facility and/or commitments
utilized in making or maintaining Loans hereunder, with there being four
separate Tranches, i.e., A Term Loans, B Term Loans, Revolving Loans and
----
Swingline Loans.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
----
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan, exceeds the fair market value of the assets allocable thereto,
determined in accordance with Section 412 of the Code, by more than $500,000.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less the
sum of (i) the aggregate outstanding principal amount of Revolving Loans made by
such Bank and (ii)
-106-
such Bank's Adjusted Percentage of the Letter of Credit Outstandings in respect
of Letters of Credit issued under this Agreement.
"Wellington Subordinated Debt" shall mean the 5-1/2% Convertible
Subordinated Debentures of Holdings due 2001.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
"Withdrawal Period" shall have the meaning provided in Section
13.04(d).
SECTION 12. The Agent.
---------
12.01 Appointment. The Banks hereby designate Bankers Trust Company
-----------
as Agent (for purposes of this Section 12, the term "Agent" shall include BTCo
in its capacity as Collateral Agent pursuant to the Security Documents) to act
as specified herein and in the other Credit Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
may perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
12.02 Nature of Duties. The Agent shall not have any duties or
----------------
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. Neither the Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action taken
or omitted by it or them hereunder or under any other Credit Document or in
connection herewith or therewith, unless caused by its or their gross negligence
or willful misconduct. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement
or any other Credit Document a fiduciary relationship in respect of any Bank or
the holder of any Note; and nothing in this Agreement or any other Credit
Document, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent
-107-
any obligations in respect of this Agreement or any other Credit Document
except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Agent. Independently and without
-----------------------------
reliance upon the Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of Holdings and its Subsidiaries and, except
as expressly provided in this Agreement, the Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. The Agent shall not be responsible to any Bank or
the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings and its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or the financial
condition of Holdings and its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
12.04 Certain Rights of the Agent. If the Agent shall request
---------------------------
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from the
Required Banks; and the Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks.
12.05 Reliance. The Agent shall be entitled to rely, and shall be
--------
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Agent believed to be the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Credit Document and
its duties hereunder and thereunder, upon advice of counsel selected by the
Agent.
-108-
12.06 Indemnification. To the extent the Agent is not reimbursed and
---------------
indemnified by the Borrower the Banks will reimburse and indemnify the Agent, in
proportion to their respective "percentages" as used in determining the Required
Banks, for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Agent in performing its respective duties hereunder or under any other
Credit Document, in any way relating to or arising out of this Agreement or any
other Credit Document; provided that no Bank shall be liable for any portion of
--------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct.
12.07 The Agent in its Individual Capacity. With respect to its
------------------------------------
obligation to make Loans and issue Letters of Credit under this Agreement, the
Agent shall have the rights and powers specified herein for a "Bank" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Banks," "Required Banks," "holders of Notes" or
any similar terms shall, unless the context clearly otherwise indicates, include
the Agent in its individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of banking, trust or other business
with any Credit Party or any Affiliate of any Credit Party as if they were not
performing the duties specified herein, and may accept fees and other
consideration from the Borrower or any other Credit Party for services in
connection with this Agreement and otherwise without having to account for the
same to the Banks.
12.08 Holders. The Agent shall deem and treat the payee of any Note
-------
as the owner thereof for all purposes hereof unless and until a written notice
of the assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the Agent. Any request, authority or consent of any Person
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
12.09 Resignation by the Agent. (a) The Agent may resign from the
------------------------
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice to
the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Agent hereunder or thereunder who shall be a commercial bank
or trust company reasonably acceptable to the Borrower.
-109-
(c) If a successor Agent shall not have been so appointed within such
15 Business Day period, the Agent, with the consent of the Borrower (which
consent shall not be unreasonably withheld), shall then appoint a commercial
bank or trust company with capital and surplus of not less than $500,000,000 as
successor Agent who shall serve as Agent hereunder or thereunder until such
time, if any, as the Required Banks appoint a successor Agent as provided above.
(d) If no successor Agent has been appointed pursuant to clause (b)
or (c) above by the 20th Business Day after the date such notice of resignation
was given by the Agent, the Agent's resignation shall become effective and the
Banks shall thereafter perform all the duties of the Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Banks
appoint a successor Agent as provided above.
SECTION 13. Miscellaneous.
-------------
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or
-------------------------
not the transactions herein contemplated are consummated, pay all out-of-pocket
costs and expenses of the Agent (including, without limitation, the reasonable
fees and disbursements of White & Case and local counsel) in connection with the
preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto, of the Agent in
connection with its syndication efforts with respect to this Agreement and of
the Agent and, following and during the continuation of an Event of Default,
each of the Banks in connection with the enforcement of this Agreement and the
other Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and disbursements of
counsel for the Agent and, following and during the continuation of an Event of
Default, for each of the Banks); (ii) pay and hold each of the Banks harmless
from and against any and all present and future stamp, excise and other similar
taxes with respect to the foregoing matters and save each of the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to pay
such taxes; (iii) indemnify the Agent and each Bank, and each of their
respective officers, directors, employees, representatives and agents from and
hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not the Agent or any Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of any
-110-
transactions contemplated herein or in any other Credit Document or the exercise
of any of their rights or remedies provided herein or in the other Credit
Documents, or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any Real
Property owned or at any time operated by Holdings or any of its Subsidiaries,
the generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by Holdings or any
of its Subsidiaries, the non-compliance of any Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including applicable
permits thereunder) applicable to any Real Property, or any Environmental Claim
asserted against Holdings, any of its Subsidiaries or any Real Property owned or
at any time operated by Holdings or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation, litigation
or other proceeding; and (iv) pay all fees and expenses (including costs of
investigation and reasonable legal fees and expenses) incurred by any Bank in
connection with any qualification (or exemption or waiver therefrom) of any Bank
under, or compliance with, the gaming regulations of any jurisdiction to the
extent that any such event arises in connection with this Agreement (but
excluding any losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Agent or any Bank set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to Holdings or the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of Holdings, the Borrower or any Subsidiary Guarantor
against and on account of the Obligations and liabilities of Holdings, the
Borrower or such Subsidiary Guarantor to such Bank under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations purchased by such Bank pursuant to Section 13.06(b), and all
other claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such Bank
shall have made any demand hereunder and although said Obligations, liabilities
or claims, or any of them, shall be contingent or unmatured.
-111-
13.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to Holdings, at
Holdings' address specified opposite its signature below; if to the Borrower, at
the Borrower's address specified opposite its signature below; if to any Bank,
at its address specified opposite its name on Schedule II; and if to the Agent,
at its Notice Office; or, as to any Credit Party or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties hereto and, as to each Bank, at such other address as shall be
designated by such Bank in a written notice to the Borrower and the Agent. All
such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, be effective when deposited
in the mails, delivered to the telegraph company, cable company or overnight
courier, as the case may be, or sent by telex or telecopier, except that notices
and communications to the Agent and the Borrower shall not be effective until
received by the Agent or the Borrower, as the case may be.
13.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided, however, the Borrower may not
-------- -------
assign or transfer any of its rights, obligations or interest hereunder or under
any other Credit Document without the prior written consent of the Banks and,
provided further, that, although any Bank may transfer, assign or grant
----------------
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Section 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder and, provided further, that no Bank shall transfer or grant any
----------------
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Final Maturity Date except to the extent provided in
Section 2.01(e)), in which such participant is participating, or reduce the
rate or extend the time of payment of interest or Fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Revolving Loan Commitment shall not constitute
a change in the terms of such participation, and that an increase in any
Revolving Loan Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Credit Documents) supporting the Loans hereunder in
which
-112-
such participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Revolving
Loan Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans to its parent company and/or any affiliate of such Bank
which is at least 50% owned by such Bank or its parent company or to one or more
Banks or (y) assign all, or if less than all, a portion equal to at least
$5,000,000 in the aggregate for the assigning Bank or assigning Banks, of such
Revolving Loan Commitments and outstanding Term Loans hereunder to one or more
Eligible Transferees, each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement;
provided, that: (i) at such time Schedule I shall be deemed modified to reflect
--------
the Revolving Loan Commitments and/or outstanding Term Loans, as the case may
be, of such new Bank and of the existing Banks; (ii) upon surrender of the old
Notes, new Notes will be issued, at the Borrower's expense, to such new Bank and
to the assigning Bank, such new Notes to be in conformity with the requirements
of Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Revolving Loan Commitment and/or outstanding Term Loans, as the case
may be; (iii) the consent of Agent shall be required in connection with any such
assignment (which consent shall not be unreasonably withheld); and (iv) the
Agent shall receive at the time of each such assignment, from the assigning or
assignee Bank, the payment of a non-refundable assignment fee of $2,500; and,
provided further, that such transfer or assignment will not be effective until
----------------
recorded by the Agent on the Register pursuant to Section 13.16 hereof. To the
extent of any assignment pursuant to this Section 13.04(b), the assigning Bank
shall be relieved of its obligations hereunder with respect to its assigned
Revolving Loan Commitments and/or outstanding Term Loans, as the case may be. At
the time of each assignment pursuant to this Section 13.04(b) to a Person which
is not already a Bank hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Bank shall provide to the Borrower and the
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Bank's Revolving Loan Commitment
(and related outstanding Obligations) and/or outstanding Term Loans, as the case
may be pursuant to Section 1.13 or this Section 13.04(b) would, at the time of
such assignment, result in increased costs under Section 1.10, 2.06 or 4.04 from
those being charged by the respective assigning Bank prior to such assignment,
then the Borrower shall not be obligated to pay such increased
-113-
costs (although the Borrower shall be obligated to pay any other increased costs
of the type described above resulting from changes after the date of the
respective assignment).
(c) If the Nevada gaming authorities shall determine that any Bank
does not meet the "Suitability Standards" under the Nevada gaming regulations or
any other gaming authority with jurisdiction over the business of Holdings and
its Subsidiaries shall determine that any Bank does not meet its suitability
standards (in any such case, a "Former Bank"), the Borrower shall have the right
(but not the duty) to designate an Eligible Transferee (in each case, a
"Substitute Bank," which may be any Bank or Banks that agree to become a
Substitute Bank) acceptable to the Agent and each Issuing Bank that has agreed
to assume the rights and obligations of the Former Bank under this Agreement
pursuant to an Assignment and Assumption Agreement, which assignment and
assumption shall be required to comply with, and shall become effective in
accordance with, the provisions of Section 13.04(b), provided that the purchase
--------
price to be paid by the Substitute Bank to the Administrative Agent for the
account of the Former Bank for such assignment and assumption shall equal the
sum of (i) the unpaid principal amount of any Notes held by the Former Bank plus
accrued interest thereon plus (ii) the Former Bank's pro rata share of the
--- ----
aggregate amount of Drawings under all Letters of Credit that have not been
reimbursed by the Borrower, plus accrued interest thereon, plus (iii) such
Former Bank's pro rata share of accrued Fees to the date of the assignment and
--- ----
assumption, and, provided further, the Borrower shall pay all obligations owing
----------------
to the Former Bank under the Credit Documents (including all obligations, if
any, owing pursuant to Section 1.11, but excluding those amounts in respect of
which the purchase price is being paid as provided above). Each Bank agrees
that if it becomes a Former Bank, upon payment to it by the Borrower of all such
amounts, if any, owing to it under the Credit Documents, it will execute and
deliver an Assignment and Assumption Agreement, upon payment of such purchase
price.
(d) Notwithstanding the provisions of subsection (c) of this Section
13.04, if any Bank becomes a Former Bank, and if the Borrower fails to find a
Substitute Bank pursuant to subsection (c) of this Section 13.04 within any time
period specified by the applicable gaming authorities for the withdrawal of a
Former Bank (the "Withdrawal Period"), the Borrower shall, immediately (i)
prepay in full the outstanding principal amount of each Note held by such Former
Bank, together with accrued interest thereon to the earlier of (x) the date of
payment or (y) the last day of any Withdrawal Period, and (ii) at the option of
the Borrower either (A) place an amount equal to such Former Bank's Adjusted
Percentage (I) in each Letter of Credit in a separate cash collateral account
with the Agent for each outstanding Letter of Credit which amount will be
applied by the Agent to satisfy the Borrower's reimbursement obligations to the
respective Issuing Bank in respect of Drawings under the applicable Letter of
Credit and (II) of the aggregate amount of all Swingline Loans then outstanding
in a separate cash collateral account with the Agent which amount will be
applied by the Agent to satisfy such Former Bank's obligations to BTCo in
respect of any Mandatory Borrowing made with respect to such outstanding
-114-
Swingline Loans or (B) if no Default or Event of Default then exists, terminate
the Revolving Loan Commitment of such Former Bank at which time the other Banks'
Percentages and Adjusted Percentages will be automatically adjusted as a result
thereof, provided that the option specified in this clause (B) may only be
exercised if, immediately after giving effect thereto, no Bank's outstanding
Revolving Loans, when added to the product of (a) such Bank's Adjusted
Percentage and (b) the sum of (I) the aggregate amount of all Letter of Credit
Outstandings at such time and (II) the aggregate amount of all Swingline Loans
then outstanding, would exceed such Bank's Revolving Loan Commitment at such
time.
(e) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and the Agent or any Bank
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Agent or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
-----------------
Agreement, the Agent agrees that promptly after its receipt of each payment from
or on behalf of the Borrower in respect of any Obligations hereunder, it shall
distribute such payment to the Banks (other than any Bank that has consented in
writing to waive its pro rata share of any such payment) pro rata based upon
--- ---- --- ----
their respective shares, if any, of the Obligations with respect to which such
payment was received. Notwithstanding anything to the contrary contained in this
Agreement, if at any time when a payment of principal, interest or Fees is due
and owing on any day with respect to more than one Tranche of Loans and the
Borrower repays less than the full amount of all such Obligations in respect of
all such Tranches of Loans that are due on such day, then the payment or
payments received by the Agent in respect of such Obligations shall be allocated
proportionately among the respective Tranches of Loans that have payments due on
such date based on the relative amount of Obligations of the respective Tranche
that are due on such date.
-115-
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided that if all or any portion of such excess
--------
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
(or the equivalent thereof in any country in which a Foreign Subsidiary is doing
business, as applicable) consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided that, except as otherwise specifically
--------
provided herein, all computations determining compliance with Sections 9.08
through 9.12, inclusive, shall utilize accounting principles and policies in
conformity with those used to prepare the historical financial statements
delivered to the Banks pursuant to Section 7.05(a).
(b) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest, Commitment Commission or Fees are payable.
(c) Except with respect to Letters of Credit denominated in a
currency other than Dollars, all determinations of any amount of Indebtedness
and/or any other amount denominated in a currency other than Dollars shall be
made by converting same into Dollars at (x) if an Other Hedging Agreement has
been entered into by Holdings and/or any of its Subsidiaries in connection with
such Indebtedness, and is in effect at the time of such
-116-
determination, the rate provided in such Other Hedging Agreement or (y) if the
provision of the preceding clause (x) is not applicable, the "official" exchange
rate, if applicable, or the spot exchange rate for the currency in question in
effect at the time of such determination.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
----------------------------------------------------------------
TRIAL. (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
-----
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS HOLDINGS, WITH OFFICES ON THE RESTATEMENT EFFECTIVE DATE AT 000
XXXXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS DESIGNEE, APPOINTEE AND AGENT
TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
OF HOLDINGS AND THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND
AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT. EACH OF HOLDINGS AND THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO HOLDINGS OR
THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(B) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (A) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(C) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
-117-
13.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
13.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Restatement Effective Date") on which (i) each of Holdings, the
Borrower, the Agent and the Required Banks (determined immediately prior to the
occurrence of the Restatement Effective Date pursuant to the Original Credit
Agreement) shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at its Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written or telex notice (actually received) at such
office that the same has been signed and mailed to it and (ii) all conditions
contained in Sections 5 and 6 are met to the satisfaction of the Agent and the
Required Banks (determined immediately prior to the occurrence of the
Restatement Effective Date pursuant to the Original Credit Agreement). Unless
the Agent has received actual notice from any Bank that the condition described
in clause (ii) of the preceding sentence has not been met to its satisfaction,
upon the satisfaction of the conditions described in clause (i) of the
immediately preceding sentence, the Restatement Effective Date shall be deemed
to have occurred, regardless of any subsequent determination that one or more of
the conditions thereto had not been met (although the occurrence of the
Restatement Effective Date shall not release the Borrower from any liability or
prevent the existence of an Event of Default based upon failure to satisfy one
or more of the applicable conditions contained in Sections 5 and 6). The Agent
shall give Holdings, the Borrower and each Bank written notice of the occurrence
of the Restatement Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any
-------------------------
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks; provided, that no such change, waiver, discharge or termination
--------
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)): (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Final Maturity Date (except to the
extent provided in Section 2.01(e)), or reduce the rate or extend the time of
payment of interest or Fees thereon, or reduce the principal amount thereof
(except to the extent repaid in cash); (ii) release all or substantially all of
the Collateral (except as expressly provided
-118-
in the Credit Documents) under all the Security Documents; (iii) amend, modify
or waive any provision of this Section 13.12; (iv) reduce the percentage
specified in the definition of Required Banks (it being understood that, with
the consent of the Required Banks, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Revolving Loan Commitments are
included on the Restatement Effective Date); or (v) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement; provided further, that no such change, waiver, discharge or
----------------
termination shall (v) increase the Revolving Loan Commitment of any Bank over
the amount thereof then in effect without the consent of such Bank (it being
understood that waivers or modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory reduction in the Total Revolving
Loan Commitment shall not constitute an increase of the Revolving Loan
Commitment of any Bank, and that an increase in the available portion of any
Revolving Loan Commitment of any Bank shall not constitute an increase in the
Revolving Loan Commitment of such Bank); (w) without the consent of BTCo, amend,
modify or waive any provision of Sections 1.01(b) or 1.01(c) or alter its rights
or obligations with respect to Swingline Loans; (x) without the consent of each
Issuing Bank, amend, modify or waive any provision of Section 2 or alter its
rights and obligations with respect to Letters of Credit; (y) without the
consent of the Agent, amend, modify or waive any provision of Section 12 as same
applies to the Agent or any other provision as same relates to the rights or
obligations of the Agent; or (z) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrower
shall have the right, so long as all non-consenting Banks whose individual
consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Revolving
Loan Commitment in accordance with Section 3.02(b) and 4.01(v), provided, that
--------
unless the Revolving Loan Commitments that are terminated, and Revolving Loans
that are repaid, pursuant to preceding clause (B) are immediately replaced in
full at such time through the addition of new Banks or the increase of the
Revolving Loan Commitments of existing Banks (who in each case must specifically
consent thereto), then in the case of any action pursuant to preceding clause
(B) the Required Banks (determined before giving effect to the proposed action)
shall specifically consent thereto; provided further, that in any event the
----------------
Borrower shall not have the right to replace a Bank, terminate its Revolving
Loan
-119-
Commitment or repay its Revolving Loans solely as a result of the exercise of
such Bank's rights (and the withholding of any required consent by such Bank)
pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Loans.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans
-----------------
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Confidentiality. (a) Subject to the provisions of clause (b)
---------------
of this Section 13.15, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of Holdings or the Borrower (other than to
its employees, auditors, advisors or counsel or to another Bank if the Bank or
such Bank's holding or parent company in its sole discretion determines that any
such party should have access to such information, provided such Persons shall
be subject to the provisions of this Section 13.15 to the same extent as such
Bank) any information with respect to Holdings or any of its Subsidiaries which
is now or in the future furnished pursuant to this Agreement or any other Credit
Document and which is designated by Holdings or the Borrower to the Banks in
writing as confidential (it being understood that the Projections are hereby
designated by Holdings and the Borrower as being confidential); provided, that
--------
any Bank may disclose any such information (a) as has become generally available
to the public, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Bank or to the Federal Reserve Board or
the Federal Deposit Insurance Corporation or similar organizations (whether in
the United States or elsewhere) or their successors, (c) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (e) to the Agent or the Collateral Agent and (f) to any
prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Revolving Loan
Commitment or any interest therein by such Bank; provided, that such prospective
--------
transferee agrees with such Bank to abide by the provisions contained in this
Section 13.15.
-120-
(b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Bank may share with any of its affiliates any information related to
Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries, provided such Persons shall be subject to the provisions of
this Section 13.15 to the same extent as such Bank).
13.16 Register. The Borrower hereby designates the Agent to serve as
--------
the Borrower's agent, solely for purposes of this Section 13.16, to maintain a
register (the "Register") on which it will record the Revolving Loan Commitment
from time to time of each of the Banks, the Loans made by each of the Banks and
each repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordation shall not
affect the Borrower's obligations in respect of such Loans. With respect to any
Bank, the transfer of the Revolving Loan Commitment of such Bank and the rights
to the principal of, and interest on, any Loan made by it shall not be effective
until such transfer is recorded on the Register maintained by the Agent with
respect to ownership of such Revolving Loan Commitment and Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Revolving Loan Commitment and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of the Commitments and
Loans shall be recorded by the Agent on the Register only upon the acceptance by
the Agent of a properly executed and delivered Assignment and Assumption
Agreement pursuant to Section 13.04(b). Coincident with the delivery of such an
Assignment and Assumption Agreement to the Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Bank and/or the
new Bank. The Borrower agrees to indemnify the Agent from and against any and
all losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Agent in performing its duties
under this Section 13.16, except to the extent caused by the Agent's gross
negligence or willful misconduct.
13.17 Original Notes. On the Restatement Effective Date and after
--------------
giving effect thereto, all outstanding Notes (as defined in the Original Credit
Agreement) issued by the Borrower to the Banks under the Original Credit
Agreement shall be deemed cancelled.
13.18 Agreement Among Signing Banks. Notwithstanding anything to the
-----------------------------
contrary contained in this Agreement, each of the Banks party to the Original
Credit Agreement which executes and delivers a counterpart of this Agreement
(and the successors and assigns of each such Bank) (each of the foregoing Banks
and their successors and assigns are herein called "Signing Banks") hereby
agrees with each other, for the benefit of all of the Banks, that (i) in
connection with any amendment, modification or waiver of
-121-
any Scheduled Repayment of any Tranche of Terms Loans, no such amendment,
modification or waiver of any Scheduled Repayment of such Tranche of Term Loans
shall be effective unless each Bank with outstanding Term Loans under the
affected Tranche shall have specifically consented thereto and (ii) this Section
13.18 may only be amended with the written consent of all Banks.
13.19 Miscellaneous. (a) Holdings, the Borrower and the Banks hereby
-------------
further agree to the following:
(i) notwithstanding anything to the contrary contained in this
Agreement or in the Pledge Agreement, the capital stock of Autotote Lottery
Israel, Ltd. shall not be required to be pledged under the Pledge
Agreement;
(ii) notwithstanding anything to the contrary contained in this
Agreement, SJC Video Corporation shall not be required to execute a
counterpart of the Security Agreement, the Pledge Agreement or the
Subsidiaries Guaranty until such time as it becomes a Wholly-Owned
Subsidiary of Holdings;
(iii) notwithstanding anything to the contrary contained in this
Agreement, the Security Agreement or the Pledge Agreement, certain filings
of UCC-1 Financing Statements and the delivery of certain Pledged
Securities that are required to be made or delivered by the Restatement
Effective Date pursuant to the terms of the respective Credit Document have
not been so made or delivered, and the respective Credit Parties shall have
30 days following the Restatement Effective Date to take all action as may
be necessary or, in the opinion of the Collateral Agent desirable, to
ensure that all such filings and deliveries have been accomplished in
accordance with the terms of the respective Credit Documents and that the
failure to take all such action within such 30 day period shall constitute
an Event of Default;
(iv) notwithstanding anything to the contrary contained in Section
5.01(c) of the September 1995 Warrant Agreement, Holdings may pay the fees
and expenses of the Holders (as defined in the January 1996 Warrant
Agreement) in connection with any demand registration initiated pursuant to
the September 1995 Warrant Agreement in which such Holders participate, and
the September 1995 Warrant Agreement shall be deemed amended to provide for
same;
(v) notwithstanding anything to the contrary contained in the
September 1995 Warrant Agreement or the warrants issued pursuant thereto,
no adjustment shall be made to the number of shares of common stock of
Holdings issued pursuant to the exercise of such warrants (or to the
exercise price thereof) in connection with the issuance of warrants (or
shares of common stock of Holdings subject to such
-122-
warrants) pursuant to the January 1996 Warrant Agreement, and the September
1995 Warrant Agreement shall be deemed amended to provide for same;
(vi) notwithstanding anything to the contrary contained in Section
4.9 of the warrants issued pursuant to the September 1995 Warrant
Agreement, the accountant's certificate required to be delivered pursuant
thereto shall not be required to be so delivered until 95 days after the
end of Holdings' respective fiscal year, at which time such accountant's
certificate shall certify as to the correctness of all adjustments and
calculations referred to in such Section 4.9 that have been made during
such fiscal year, and such warrants shall be deemed amended to provide for
same;
(vii) notwithstanding anything to the contrary contained in Section
4.01(b) of the warrants issued pursuant to the September 1995 Warrant
Agreement, no adjustment shall be made to the number of shares of common
stock of Holdings issued pursuant to the exercise of such warrants (or to
the exercise price thereof) in connection with any shares issued upon
conversion, exercise or exchange of "Rights" (as defined in such warrants)
issued prior to the date of the September 1995 Warrant Agreement, and such
warrants shall be deemed amended to provide for same;
(viii) notwithstanding anything to the contrary contained in Section
4.1(c) of the warrants issued pursuant to the September 1995 Warrant
Agreement, the first twenty words of such Section shall be deemed amended
to read as follows:
"In the case the Company shall distribute generally to holders
of any class of its shares of Common Stock, any"; and
(ix) the execution and delivery of this Agreement shall cure the
Events of Default that were waived pursuant to (and for the specific time
periods set forth in) the Waiver, Consent, Agreement and Seventh Amendment,
dated as of October 14, 1995, to the Original Credit Agreement.
(b) Each of Holdings and the Borrower hereby acknowledges and
agrees, and hereby represents and warrants, that it does not have any defense,
set-off or counterclaim against the Obligations and neither Holdings nor the
Borrower has any claims against the Administrative Agent, the Collateral Agent,
any Issuing Bank or any Bank arising out of, related to, or in connection with,
this Agreement, the Original Credit Agreement or any of the transactions
contemplated hereby or thereby.
-123-
SECTION 14. Holdings Guaranty.
-----------------
14.01 The Guaranty. In order to induce the Banks to enter into this
------------
Agreement and to extend (and to continue to extend) credit hereunder and in
recognition of the direct benefits to be received by Holdings from the proceeds
of the Loans and the issuance of the Letters of Credit and to induce the Banks
or any of their respective Affiliates to enter into Interest Rate Protection
Agreements or Other Hedging Agreements, Holdings hereby agrees with the Banks as
follows: Holdings hereby unconditionally and irrevocably guarantees (and
continues to guaranty) as primary obligor and not merely as surety the full
and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all of the Guaranteed Obligations of the Borrower to the
Secured Creditors. If any or all of the Guaranteed Obligations of the Borrower
to the Secured Creditors becomes due and payable hereunder, Holdings
unconditionally promises to pay such indebtedness to the Secured Creditors, on
order, or demand, together with any and all reasonable expenses which may be
incurred by the Agent or the Secured Creditors in collecting any of the
Guaranteed Obligations.
14.02 Bankruptcy. Additionally, Holdings unconditionally and
----------
irrevocably guarantees (and continues to guaranty) the payment of any and all of
the Guaranteed Obligations of the Borrower to the Secured Creditors whether or
not then due or payable by the Borrower upon the occurrence in respect of the
Borrower of any of the events specified in Section 10.05, and unconditionally
and irrevocably promises to pay such Guaranteed Obligations to the Secured
Creditors, on order, or demand, in lawful money of the United States.
14.03 Nature of Liability. The liability of Holdings hereunder is
-------------------
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder shall
not be affected or impaired by (a) any direction as to application of payment
by the Borrower or by any other party, or (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the Guaranteed Obligations of the Borrower, or (c) any payment on or in
reduction of any such other guaranty or undertaking, or (d) any dissolution,
termination or increase, decrease or change in personnel by the Borrower, or (e)
any payment made to the Agent or the Secured Creditors on the indebtedness which
the Agent or such Secured Creditors repay the Borrower pursuant to court order
in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and Holdings waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding.
14.04 Independent Obligation. The obligations of Holdings hereunder
----------------------
are independent of the obligations of any other guarantor or the Borrower, and a
separate
-124-
action or actions may be brought and prosecuted against Holdings whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other guarantor or the Borrower be joined in any such action or actions.
Holdings waives, to the fullest extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to Holdings.
14.05 Authorization. Holdings authorizes the Agent and the other
-------------
Secured Creditors without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended, renewed
or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Banks;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Secured Creditors
regardless of what liability or liabilities of Holdings or the Borrower
remain unpaid;
-125-
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements
referred to herein, or otherwise amend, modify or supplement this Agreement
or any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Section 14.
14.06 Reliance. It is not necessary for the Agent or any of the
--------
other Secured Creditors to inquire into the capacity or powers of the Borrower
or any other Credit Party or the officers, directors, partners or agents acting
or purporting to act on its or their behalf, and any Guaranteed Obligations made
or created in reliance upon the professed exercise of such powers shall be
guaranteed hereunder.
14.07 Subordination. Any of the indebtedness of the Borrower now or
-------------
hereafter owing to Holdings is hereby subordinated to the Guaranteed Obligations
of the Borrower owing to the Agent and the other Secured Creditors; and if the
Agent so requests at a time when an Event of Default exists, all such
indebtedness relating to the Guaranteed Obligations of the Borrower to Holdings
shall be collected, enforced and received by Holdings for the benefit of the
Secured Creditors and be paid over to the Agent on behalf of the Secured
Creditors on account of the Guaranteed Obligations of the Borrower to the
Secured Creditors, but without affecting or impairing in any manner the
liability of Holdings under the other provisions of this Holdings Guaranty.
Prior to the transfer by Holdings of any note or negotiable instrument
evidencing any of the indebtedness relating to the Guaranteed Obligations of the
Borrower to Holdings, Holdings shall xxxx such note or negotiable instrument
with a legend that the same is subject to this subordination.
14.08 Waiver. (a) Holdings waives any right (except as shall be
------
required by applicable statute and cannot be waived) to require the Agent or the
other Secured Creditors to (i) proceed against the Borrower, any other guarantor
or any other party, (ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party or (iii) pursue any other
remedy in the Agent's or the other Secured Creditors' power whatsoever.
Holdings waives any defense based on or arising out of any defense of the
Borrower, any other guarantor or any other party, other than payment in full of
the Guaranteed Obligations, based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full of the
Guaranteed Obligations. The Agent and the other Secured Creditors may, at their
election, foreclose on any security held by the Agent, the Collateral Agent or
the other Secured Creditors by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially
-126-
reasonable (to the extent such sale is permitted by applicable law), or exercise
any other right or remedy the Agent and the other Secured Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of Holdings hereunder except to the extent
the Guaranteed Obligations have been paid. Holdings waives any defense arising
out of any such election by the Agent and the other Secured Creditors, even
though such election operates to impair or extinguish any right of reimbursement
or subrogation or other right or remedy of Holdings against any Borrower or any
other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Holdings
Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Holdings assumes all responsibility for being
and keeping itself informed of the Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks which
Holdings assumes and incurs hereunder, and agrees that the Agent and the other
Secured Creditors shall have no duty to advise Holdings of information known to
them regarding such circumstances or risks.
(c) Without limiting the generality of the foregoing, Holdings hereby
agrees with the Agent and the other Secured Creditors that it will not exercise
any right of subrogation which it may at any time otherwise have as a result of
this Holdings Guaranty (whether contractual, under Section 509 of the Bankruptcy
Code, or otherwise) until all of the Guaranteed Obligations of the Borrower to
the Agent and the other Secured Creditors have been irrevocably paid in full in
cash.
14.09 Nature of Liability. (a) It is the desire and intent of
-------------------
Holdings and the Secured Creditors that this Holdings Guaranty shall be enforced
against Holdings to the fullest extent permissible under the laws and public
policies applied in each jurisdiction in which enforcement is sought. If,
however, and to the extent that, the obligations of Holdings under this Holdings
Guaranty shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers), then the amount of the
Guaranteed Obligations of Holdings shall be deemed to be reduced and Holdings
shall pay the maximum amount of the Guaranteed Obligations which would be
permissible under applicable law.
(b) If claim is ever made upon any Secured Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having
-127-
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Holdings Guaranty or any other
instrument evidencing any liability of the Borrower, and Holdings shall be and
remain liable to the aforesaid payees hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such payee.
* * *
-128-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date
first above written.
Address:
-------
000 Xxxxxxxx Xxxx AUTOTOTE CORPORATION
Xxxxxx, Xxxxxxxx 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By [SIGNATURE NOT LEGIBLE]
------------------------------
Attention: Xxxxxx Xxxxxx Title: Vice President
with a copy to:
Autotote Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: General Counsel
000 Xxxxxxxx Xxxx AUTOTOTE SYSTEMS, INC.
Xxxxxx, Xxxxxxxx 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000 By [SIGNATURE NOT LEGIBLE]
-----------------------------
Attention: Xxxxxx Xxxxxx Title: Vice President
with a copy to:
c/o Autotote Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: General Counsel
BANKERS TRUST COMPANY,
Individually and as Agent
By [SIGNATURE NOT LEGIBLE]
-----------------------------
Title: Vice President
BANK OF IRELAND,
GRAND CAYMAN BRANCH
By [SIGNATURE NOT LEGIBLE]
-----------------------------
Title: [NOT LEGIBLE]
BANK POLSKA KASA OPIEKI, S.A.
By_____________________________
Title:
BHF-BANK AKTIENGESELLSCHAFT
By_____________________________
Title:
By_____________________________
Title:
CREDITANSTALT CORPORATE
FINANCE, INC.
By_____________________________
Title:
By_____________________________
Title:
DELAWARE TRUST COMPANY
By______________________________
Title:
BANK OF IRELAND,
GRAND CAYMAN BRANCH
By_____________________________
Title:
BANK POLSKA KASA OPIEKI, S.A.
By /s/ Xxxxxxx X. Xxxx
----------------------------
Title: XXXXXXX X. XXXX
Vice President
Senior Lending Officer
BHF-BANK AKTIENGESELLSCHAFT
By_____________________________
Title:
By_____________________________
Title:
CREDITANSTALT CORPORATE
FINANCE, INC.
By_____________________________
Title:
By_____________________________
Title:
DELAWARE TRUST COMPANY
By______________________________
Title:
BANK OF IRELAND,
GRAND CAYMAN BRANCH
By_____________________________
Title:
BANK POLSKA KASA OPIEKI, S.A.
By_____________________________
Title:
BHF-BANK AKTIENGESELLSCHAFT
By [SIGNATURE NOT LEGIBLE]
-----------------------------
Title: Vice President
By [SIGNATURE NOT LEGIBLE]
-----------------------------
Title: Vice President
CREDITANSTALT CORPORATE
FINANCE, INC.
By_____________________________
Title:
By_____________________________
Title:
DELAWARE TRUST COMPANY
By_____________________________
Title:
BANK OF IRELAND,
GRAND CAYMAN BRANCH
By_____________________________
Title:
BANK POLSKA KASA OPIEKI, S.A.
By_____________________________
Title:
BHF-BANK AKTIENGESELLSCHAFT
By_____________________________
Title:
By_____________________________
Title:
CREDITANSTALT CORPORATE
FINANCE, INC.
By [SIGNATURE NOT LEGIBLE]
-----------------------------
Title: Vice President
By [SIGNATURE NOT LEGIBLE]
----------------------------
Title: Vice President
DELAWARE TRUST COMPANY
By______________________________
Title:
BANK OF IRELAND,
GRAND CAYMAN BRANCH
By_______________________________
Title:
BANK POLSKA KASA OPIEKI, S.A.
By_______________________________
Title:
BHF-BANK AKTIENGESELLSCHAFT
By_______________________________
Title:
By_______________________________
Title:
CREDITANSTALT CORPORATE
FINANCE, INC.
By_______________________________
Title:
By_______________________________
Title:
DELAWARE TRUST COMPANY
By [SIGNATURE NOT LEGIBLE]
------------------------------
Title: [NOT LEGIBLE]
EUROPEAN AMERICAN BANK
By [SIGNATURE NOT LEGIBLE]
------------------------------
Title: Vice President
FLEET BANK OF MASSACHUSETTS, N.A.
By_______________________________
Title:
GIROCREDIT BANK AG DER
SPARKASSEN, GRAND CAYMAN
ISLAND BRANCH
By_______________________________
Title:
EUROPEAN AMERICAN BANK
By_______________________________
Title:
FLEET BANK OF MASSACHUSETTS, N.A.
By [SIGNATURE NOT LEGIBLE]
------------------------------
Title: Senior Vice President
GIROCREDIT BANK AG DER
SPARKASSEN, GRAND CAYMAN
ISLAND BRANCH
By______________________________
Title
EUROPEAN AMERICAN BANK
By [SIGNATURE NOT LEGIBLE]
------------------------------
Title: Vice President
FLEET BANK OF MASSACHUSETTS, N.A.
By_______________________________
Title:
GIROCREDIT BANK AG DER
SPARKASSEN, GRAND CAYMAN
ISLAND BRANCH
By /s/ Xxxx Xxxxxx
------------------------------
Title: XXXX XXXXXX
VICE PRESIDENT
By /s/ Sharad Gusta
------------------------------
SHARAD GUSTA
CHIEF CREDIT OFFICER
SCHEDULE I
----------
COMMITMENTS
-----------
A B Revolving
Term Term Loan
Bank Loans Loans Commitment
---- ----- ----- ----------
Bankers Trust Company $21,000,000 $5,000,000 $24,000,000
Bank of Ireland, $2,000,000 0 $3,000,000
Grand Cayman Branch
Bank Polska Kasa Opieki, S.A. $2,000,000 0 $3,000,000
BHF-Bank Aktiengesellschaft $4,000,000 0 $6,000,000
Creditanstalt Corporate $6,000,000 0 $9,000,000
Finance, Inc.
Delaware Trust Company $4,000,000 0 $6,000,000
European American Bank $6,000,000 0 $9,000,000
Fleet Bank of Massachusetts, N.A. $6,000,000 0 $9,000,000
Girocredit Bank AG Der Sparkassen, $4,000,000 0 $6,000,000
Grand Cayman Island Branch
Total: ----------- ---------- -----------
$55,000,000 $5,000,000 $75,000,000
SCHEDULE II
-----------
BANK ADDRESSES
--------------
Bankers Trust Company 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxxxx Xxxxxxx
Bank of Ireland, 000 Xxxxx Xxxxxx
Xxxxx Xxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
Bank Polska Kasa Opieki, S.A. 000 Xxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxx
BHF-Bank Aktiengesellschaft 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxxx
Creditanstalt Corporate 2 Greenwich Plaza
Finance, Inc. Xxxxxxxxx, Xxxxxxxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxxxx
Delaware Trust Company 0000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
SCHEDULE II
Page 2
European American Bank 0 XXX Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx
Fleet Bank of Massachusetts, N.A. 00 Xxxxxxxxxxx Xxxxxx
Mail Code: R10PT05A
X.X. Xxx 000
Xxxxxxxxxx, Xxxxx Xxxxxx 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxxx
Girocredit Bank XX Xxx 00 Xxxx 00xx Xxxxxx
Sparkassen, Grand Cayman 00xx Xxxxx
Xxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxxxx
Schedule III - Existing Letters of Credit
Reference Section 2.01(a)
LC # Beneficiary Expiration Currency Amount
---- ----------- ---------- -------- ------
S10169 Reliance Insurance Company 30-Jun-96 * USD 500,000
S10189 American Bankers Insurance Company 13-Oct-96 * USD 125,000
S10201 International Fidelity Insurance Company 13-Oct-96 * USD 50,000
S10231 Reliance Insurance Company 18-Oct-96 * USD 500,000
S10275 Compagnie Financiere Xxxxxx xx Xxxxxxxxxx Banque 18-Oct-95 * FF 1,800,000
S10276 Compagnie Financiere Xxxxxx xx Xxxxxxxxxx Banque 18-Nov-94 * FF 600,000
S10277 Compagnie Financiere Xxxxxx xx Xxxxxxxxxx Banque 20-Apr-95 * FF 600,000
* Contains automatic extension provision.
Schedule IV - Undisclosed Liabilities
Reference Section 7.05(c)
Company Issuer Beneficiary Expiration Amount
------- ------ ----------- ---------- ------
BANK GUARANTEES
---------------
Autotote Worldwide Svcs. Allied Irish Bank Customs & Excise Taxation $ 48,000
SURETY BONDS
------------
Autotote Corporation Reliance State of Connecticut 30-Jun-95 $ 2,000,000
Autotote Lottery Reliance State of Connecticut 9-May-98 $ 2,000,000
Autotote Lottery American Bankers Insurance Co. of FL State of Delaware 17-May-94 $ 175,000
Autotote Lottery International Fidelity Insurance Co. State of Delaware 29-DEC-94 $ 125,000
OTHER LIABILITIES
-----------------
Autotote Corporation guarantee of the State of Connecticut Off-Track Betting
System Purchase Agreement.
Autotote Corporation guarantee of TeleControl's obligations to IDJ in connection
with German lottery contracts.
Autotote Corporation guarantee of FF4,000,000 of SEPMO bank indebtedness.
Autotote Corporation guarantee of $2.1 million CBS mortgage.
Xxxxxx X. Xxxxxxxx Productions, Inc. guarantee of SJC Video Corporation
equipment four term loans totaling $640,000.
Schedule V - Tax Matters
Reference Section 7.09
1. Return for year ended 31 October 1995 is on extension until 15 July 1996
2. Retail sales tax audit in progress by the Ministry of Revenue, Province
of Ontario, Canada related to OJC equipment. A tax liability of $100,000
has been recorded and reflected in the 31 October 1995 financial
statements.
3. The following tax audits are in progress or have been scheduled. No
material exposure is expected as a result of these audits.
- Notice received of planned IRS audit of Xxxxxx X. Xxxxxxxx
Productions, Inc. for the tax years 1992 and 1993.
- New York State Sales & Use tax audit scheduled to begin in March
1996 for the tax years 1993 through 1996.
- Delaware State Gross Tax Receipts audit in progress for Autotote
Systems, Inc. tax years 1993 and 1994.
- Florida State Sales & Use tax audit in progress for the tax
years 1990 through 1994.
- Canada General Sales Tax audit in progress for Autotote Systems,
Inc. and Autotote Canada, Inc. for the tax years 1991 through
1994.
Schedule VI - Real Property
Reference Section 7.12
1. Autotote Corporation
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
2. Autotote Systems, Inc
000 Xxxxxxxx Xxxx 000 Xxxxx Xxxxxx 0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000-0000 Santa Monica, CA 90402 Xxxxx, XX 00000
Xxxxxx 000 xxx 000 000 Xxxxxxxxxxx Xxxx.
0000 Xxxxxxxxxx Xxxxx Xxxxx Xxxxxx, XX 00000
Xxxxxxxxxx, XX 00000
3. Autotote Lottery Corporation
00000 Xxxxxxxx Xxxxx 00 Xxxxxx Xxxx
Xxxxxx Xxxxx, XX 00000 Xxxxx Xxxx, XX 00000
00 Xxxxxx Xxxx 0000 Xxxxx Xxxxx Xxxx., Xxxxx X
Xxxxx Xxxx, XX 00000 Xxxxxxx, XX 00000
4. Autotote Enterprises, Inc
00 Xxxxxx Xxxx 00 Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000 Xxxxxxx, XX 00000
Norwalk Mall Pathmark Plaza
Xxxxxxx Blvd. 000 Xxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxx Xxxxx, XX 00000
000-000 Xxxxxx Xxx. * 00 Xxxxxxxxxxxxx Xx.
Xxxx Xxxxx, XX 00000 Xxxxxxx Xxxxx, XX 00000
0000 Xxxxx Xxxxx Xxxxxx 0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Newbrite Plaza Colonial Plaza
East Main Street Thomaston Avenue
New Xxxxxxx, CT 06000 Xxxxxxxxx, XX 00000
000 Xxxxxxx Xxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
* 000 Xxxx Xxxxx Xxxxx
Xxx Xxxxx, XX 00000
Schedule VI - Real Property - Continued
Reference Section 7.12
5. Autotote CBS, Inc
* 000 Xxxx Xxxxx Xxxx
Xxx Xxxxx, XX 00000
6. Autotote Worldwide Services, Ltd.
Xxxxxxx Xxxx, Xxxxxxxxxx
Xxxxxx Xxxxxxxx, Xxxxxxx
7. ETAG Electronic Totalisator AG
Xxxxxxxxxxxxx 00, X.X. Xxx 000
XX 0000 Xxx
Xxxxxxxxxxx
8. TEK Turfelektronik GMBH
Xxxxxxxxxxxx 00
0000 Xxxxx
Xxxxxxx
9. Datek Toto Dienstleistung GMBH
Xxxxxxxxxxxxxxx 000-000
00000 Xxxxxxx
Xxxxxxx
10. Tele Control
* Xxxxxxxxxxxxxx 00/0/0-00/0/0 Xxxxxxxxxxxx 2-4
A-1130 Vienna X-0000 Xxxxxx
Xxxxxxx Austria
11. Autotote Communication Services, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000 24922 Anza Drive 000 Xxxxx Xxxx
Xxx Xxxx, XX 00000 Unit E Englewood, NJ 07631
Xxxxxxxx, XX 00000
11. SOFINAX
* Parc de Buzenval * 00 Xxx Xxxxxxxx
0 Xxx xx xx Xxxxxxxxxx Xxxxx 17eme
92563 Rueil-Malmaison Cedex France
France
* Owned property
SCHEDULE VII - CAPITALIZATION
Reference Section 7.13
Common Stock (Class A) Authorized 99,300,000
Issued 30,950,183
Treasury 7,888
Outstanding 30,942,295
Common Stock (Class B) Authorized 700,000
Issued 0
Outstanding 0
Preferred Stock Authorized 2,000,000
Issued 0
Outstanding 0
Warrants to purchase Class A Common Stock
1991 Warrants 2,264,493 (1)(2)
1995 Lender Warrants 385,716 (1)
1996 Lender Warrants, issued pursuant to Credit Agreement 525,000 (1)
Warrants to purchase Class B Common Stock 146,793 (1)
Management Incentive Compensation Plan (MICP)
Deferred compensation to purchase Class A Common Stock 53,250 (1)
Shares issuable upon conversion of 5.5% Subordinated Convertible Debentures 2,000,000 (1)
Unexercised stock options granted under the 1984 Stock Option Plan 416,002 (1)
Other unexercised stock options 1,245,000 (1)
Unexercised stock rights granted under the 1992 Equity Incentive Plan 1,295,634 (1)
Authorized but ungranted stock rights under the 1992 Equity Incentive Plan 1,588,667 (1)
Unexercised stock rights granted under the 1995 Equity Incentive Plan 263,072 (1)
Authorized but ungranted stock rights under the 1995 Equity Incentive Plan 1,736,928 (1)
Holders of the 5.5% Subordinated Convertible Debentures maturing 2001 will receive
unregistered shares in lieu of cash in payment for interest due on 2/15/96.
(1) Subject to anti-dilution provisions.
(2) Will be increased as a result of the issuance of warrants to the Banks
concurrently herewith.
SCHEDULE VIII - SUBSIDIARIES
Reference Section 7.14
Sub Level
---------
1 Autotote Corporation (Delaware)
2 Autotote Management Corporation (Delaware) (100%)
2 Newark Holdings, Inc. (Delaware) (100%)
3 Autotote Systems, Inc. (Delaware) (100%)
4 Autotote International, Inc. (Delaware) (100%)
4 Autotote Canada, Inc. (Ontario) (100%)
4 Autotote Europe, Ltd. (Ireland) (100%)
4 Autotote Worldwide, Ltd. (Non-Resident Ireland) (99%, 1% NHI)
5 Autotote Worldwide Services, Ltd. (Ireland) (100%)
5 Autotote International, Ltd. (Ireland) (100%) (Inactive)
3 Autotote Products, Inc. (Delaware) (100%) (Inactive)
4 HTP, Inc. (Pennsylvania) (100%) (Inactive)
2 Autotote Enterprises, Inc. (Connecticut) (100%)
2 Autotote Keno Corporation (Nebraska) (100%)
2 Autotote Lottery Corporation (Delaware) (100%)
3 Autotote Lottery Canada, Inc. (Quebec) (100%)
3 Autotote Israel Ltd. (Israel) (80%)
2 Autotote UK Limited (UK) (100%)
2 Autotote CBS, Inc. (Nevada) (100%)
3 Megasports, Inc. (Nevada) (50%)
2 ETAG Electronic Totalisator AG (Switzerland) (100%)
3 TEK Turfelektronik GMBH (Germany) (100%)
4 Datek Toto Dienstleistung GMBH (Germany) (50%)
3 ETAG Electronic Totalisator GesMBH (Austria) (100%)
2 Tele Control Kommunikations und Computersysteme GesMBH (Austria) (100%)
2 Autotote Communication Services, Inc., formerly Autotote Simulcast Corporation (Delaware)(100%)
2 Xxxxxx X. Xxxxxxxx Productions, Inc. (New York) (100%)
3 SJC Video Corporation (California) (66.67%)
2 Racing Technology, Inc. (New York) (100%)
2 SOFINAX (France)(85%)
3 SEPMO (France)(100%)
4 REALM (France)(78%)(22% held by SOFINAX directly)
3 SASO (France)(100%)
3 Microdyne Flocam (France)(54%)
2 Autotote Mexico Ltd.(Delaware) (100%)
2 Autotote Manufacturing Corporation (Delaware) (100%)
SCHEDULE IX - EXISTING INDEBTEDNESS
Reference Section 7.21 and 9.05
Principal
Amount
BORROWER/LESSEE LENDER/LESSOR GUARANTOR DESCRIPTION (IN $000)
--------------- ------------- --------- ----------- ---------
Autotote Worldwide Services Irish Development Auth. Capital Grant Obligation $ 533
Autotote Worldwide Services AIB Leasing Capital Lease for Equipment $ 256
Autotote Lottery Corporation U.S. Leasing Int'l Capital Lease for Equipment $ 188
Autotote Lottery Corporation U.S. Leasing Int'l Capital Lease for Equipment $ 180
Autotote Lottery Corporation U.S. Leasing Int'l Capital Lease for Equipment $ 380
Autotote Lottery Corporation Xxxxxx Financial Capital Lease for Equipment $ 114
Autotote Lottery Corporation Xxxxxx Financial Capital Lease for Equipment $ 779
Autotote CBS, Inc. Standard Life & Accident Autotote Corporation Mortgage Loan $ 2,086
SJC Video Corp. City National Bank M.H.S.P., Inc. Term Loans $ 640
SJC Video Corp. Sony Electronics Term Loan $ 74
SOFINAX CCF Edouard VII Term Loan FF 667
SOFINAX Banque Hervet Term Loan FF 4,933
SOFINAX Societe Generale Credit Line FF 2,000
SOFINAX Banque Nationale De Paris Credit Line FF 1,600
SEPMO Credit Industriel de l'Ouest Credit Line FF 700
SEPMO CEPME Term Loan FF 392
SEPMO Banque Nationale De Paris Autotote Corporation Revolver FF 2,000
SEPMO Societe Generale Autotote Corporation Revolver FF 2,000
SEPMO Leasing Equipment Lease FF 611
ETAG (Zug) Swiss Credit Bank Overdraft Facility SFr 130
Various intercompany notes.
SCHEDULE X - INSURANCE
Reference Section 8.03(a)
-------------------------
COVERAGE INSURANCE COMPANY POLICY # AMOUNT
-------- ----------------- -------- ------
NORTH AMERICA AND INTERNATIONAL SALES
-------------------------------------
Errors & Omissions St. Xxxx TE06400263 $11,000,000 Each Error/Aggregate
Workers' Compensation St. Xxxx WVA6400210 Statutory Benefits
Executive Risk National Union SRGL6496519 $1,000,000 Limit of Liability
Fiduciary Liability/Crime Chubb 81224201C
Fiduciary $1,000,000 Each Loss
Crime $5,000,000 Employee Theft
Directors and Officers Liability Reliance NDA0126605 $5,000,000 Limit of Liability
American Alliance TDX9823992 $5,000,000 excess of $5,000,000
Zurich Insurance DOC8389591 $5,000,000 excess of $10,000,000
Nonowned Aircraft liability XXXXX 000XX000000 $5,000,000 Combined Single Limit
Mexico Property Chubb Group IN 232019 $1,083,334 Hippo De Aqua Caliente
$1,027,778 Xxxxxx Turf Club
$2,000,000 Various Locations
Panama Property Chubb Group TBD $1,013,600 Hipodrome President Remon Track
Workers' Compensation Continental 28C881712793J Massachusetts Employees Benefits Statutory
Exporters Package Chubb 35315445 Personal Property - El Muavo Commendante Race Track
$1,605,993
Political Risk Chubb 78410005 Mexico-Expropriatory Action
$1,570,790 Any One Loss
Political Risk Chubb 78410008 Panama-Expropriatory Action
$1,200,000 Any One Loss
Ocean Cargo Commercial Union CPC400510 $1,000,000 Any One Vessel
$1,500,000 Any One Aircraft
Commercial Package St. Xxxx TE09000503
Property Blanket Building, Contents, including Property of
Others $44,378,967
Computer Equipment $11,063,000, $2,500,000 any one track.
General Liability $2,000,000 General Aggregate/$1,000,000 per occurance
Automobile Liability/Physical Damage $1,000,000 Liability/Uninsured Motorist
Umbrella Liability $10,000,000
Excess Umbrella Liability Chubb (00)00000000 Limit of Liability $9,000,000 beyond St. Paul's
$10,000,000
License Bond American Bankers 0000000
Comercial Package - Canada St. Xxxx 177DP1881
Property Per track limits - maximum $2,758,000
General Liability General/Personal Injury Aggregate $2,000,000/$1,000,000
per occurance
Business Automobile-Canada St. Xxxx 277JG3962 Third Party Liability $1,000,000
SCHEDULE X - INSURANCE - CONTINUED
Reference Section 8.03(a)
-------------------------
COVERAGE INSURANCE COMPANY POLICY # AMOUNT
-------- ----------------- -------- ------
ETAG (ZUG)
----------
Commercial Package Alpina Insurance 5'422'321 Property Damage - SFr 80,000
Business Interruption - SFr 50,000
Liability Alpina Insurance 2'101'187.0 SFr 5,000,000
Pension Liability Helvetia-Patria 1301.V.0.36147 Statutory Coverage
Workers' Compensation Alpina Insurance 3'007'150 Statutory Coverage
TELECONTROL
-----------
Commercial Package Niederosterr. 7.2.11.474/8 AS 24,050,000
Third Party Liability $1,000,000
Transportation Xxxxxxx 64/21028/52 AS 500,000
Computer Equipment Niederosterr. 43.874/3 AS 14,000,000
Property Niederosterr. 7.212.142/0 AS 1,200,000
Business Automobiles Niederosterr. Various AS 12,000,000
AUTOTOTE WORLDWIDE SERVICES LTD.
--------------------------------
Commercial Package Chubb 3531 3264 Material damage - $3,700,880 - any one loss
Public Liability - $1,600,000 - any one event/unlimited any one
period
Product Liability - $1,600,000 - any one event/period
Employers Liability Irish National 01/5063283/ELP $16,000,000 per event
LXE 00051 $8,000,000 excess coverage
Commercial Vehicles Irish National 01/5064238/mps $400,000
Motor Contingency Norwich Union MCL 9335768 (Personal autos on business use.)
Engineering Irish National 01/5068325/INP Inspection Fee
Marine Cargo Irish National 01/5065695/ITP $750,000 exports/$250,000 imports
Travel Lloyds GCHT 07918 $8,000,000 Medical/$80,000 Accident
ETAG GMBH (VIENNA)
------------------
Electrical Equipment Zurich Kosmos 46/0070-0 AS 10,377,060
Glass Insurance Zurich Kosmos 86/11939-0 AS 103,985
Liability - Operations Zurich Kosmos 77/54674-5 AS 5,000,000
Liability - Automobiles Zurich Kosmos 3/00000-0 XX 00,000,000
Telephone Zurich Kosmos 16/1106475 AS 46,000
Liability - Automobiles Zurich Kosmos 02249696-4 AS 15,000,000
SCHEDULE X - INSURANCE - CONTINUED
Reference Section 8.03(a)
-------------------------
SOFINAX GROUP
-------------
General Liability (Staff) Xxxxxxx Xxxxx 0000000 FF 2,000,000
After Delivery Damage FF 5,000,000
Damages & Indirect Loss FF 5,000,000
Damages & Indirect Loss - PMU UAP Paris 51635629 FF 20,000,000
All Risk - Equipment (PMU) UAP Paris 375036751718 FF 9,250,000
All Risk - Equipment (Other) AZUR Paris 13739053ZC FF 26,576,000
AZUR Paris 11062902ZZ FF 1,963,000
All Risk - Fiduciary Cash AZUR Paris 1793533ZY According to balance
Property AZUR Paris 11987900W Replacement Value; FF400,000 Deductible
13796424ZN Fixtures FF1,300,000
Autotmobile Damage AZUR Paris 1101370 Various
TEK TURFELEKTRONIC GMBH
-----------------------
Electronic Equipment Agrippina Vers. AG Various Replacement Cost
Electronic Equipment Wurttembergische TV27-626453802 Replacement Cost
Liability Agrippina Vers. AG 810191074027
D & O Agrippina Vers. AG 400191555714
Automobile - Liability Agrippina Vers. AG Various
Automobile - Theft Agrippina Vers. AG 500190597043
Baggage Agrippina Vers. AG 500190597078
Schedule XI - Existing Liens
Reference Section 9.01(iii)
Lender/Lessor Obligation Encumbered Asset/Property
Irish Development Authority Capital Grant Capital Equipment Autotote Worldwide Services
Allied Irish Bank Capital Lease Capital Equipment Autotote Worldwide Services
U.S. Leasing International Capital Leases Computer Equipment and Software Autotote Lottery Corporation
Xxxxxx Financial Capital Leases Equipment Autotote Lottery Corporation
Standard Life & Accident Ins. Co. Mortgage Las Vegas Office Facility Autotote CBS
Sony Electronics Term Loan Video Equipment SJC Video Corp.
City National Bank Term Loan Blanket lien on all assets SJC Video Corp.
Banque Hervet Mortgage Parc de Buzenval SOFINAX
CIO, BNP and SoGen. Mortgage Rue Cardinet SEPMO
Service America Corp. Purchase Money Security Interest Food Service Operation Assets Autotote Enterprises
Liens related to operating leases permitted under the Credit Agreement.
Liens related to performance bonds permitted under the Credit Agreement.
Liens scheduled on Annex A to the Security Agreement.
EXHIBIT A
---------
NOTICE OF BORROWING
-------------------
[Date]
Bankers Trust Company, as
Agent for the Banks party
to the Credit Agreement
referred to below
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _____________
Gentlemen:
The undersigned, an Authorized Representative of Autotote Systems,
Inc. (the "Borrower"), refers to the Credit Agreement, dated as of October 31,
1991, and amended and restated as of October 30, 1992, and amended and restated
as of June 4, 1993, and amended and restated as of April 28, 1994, and further
amended and restated as of January 26, 1996 (as further modified, supplemented
and amended from time to time, the "Credit Agreement", the terms defined therein
being used herein as therein defined), among the Borrower, Autotote Corporation,
various Banks from time to time party thereto, and you, as Agent for such Banks,
and hereby gives you notice, irrevocably, pursuant to Section 1.03(a) of the
Credit Agreement, that the undersigned hereby requests a Borrowing of Revolving
Loans under the Credit Agreement, and in that connection sets forth below the
information relating to such Borrowing (the "Proposed Borrowing") as required by
Section 1.03 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _______, 19__. 1/
-
(ii) The aggregate principal amount of the Proposed Borrowing is
$___________.
______________________________
1/ Shall be a Business Day at least one Business Day in the case of Base
-
Rate Loans and three Business Days in the case of Eurodollar Rate Loans, in
each case, after the date hereof.
EXHIBIT A
Page 2
(iii) The Revolving Loans to be made pursuant to the Proposed
Borrowing shall be initially maintained as [Base Rate Loans] [Eurodollar
Loans].
[(iv) The initial Interest Period for the Proposed Borrowing is
___ month(s).]2/
-
The undersigned hereby certifies that the following statements are
true and correct on the date hereof, and will be true and correct on the date of
the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date); and
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
[AUTOTOTE CORPORATION]
[AUTOTOTE SYSTEMS, INC.]
By____________________________
Name:
Title:
______________________________
2/ To be included for a Proposed Borrowing of Eurodollar Loans.
-
EXHIBIT B-1
-----------
A TERM NOTE
-----------
$__________ New York, New York
________ __, 1996
FOR VALUE RECEIVED, AUTOTOTE SYSTEMS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of________________________
(the "Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Bankers Trust Company (the "Agent") located at
Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the A Term Loan Maturity
Date (as defined in the Agreement referred to below) the principal sum of
_____________ DOLLARS ($__________) or, if less, the then unpaid principal
amount of all A Term Loans (as defined in the Agreement) made by the Bank
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the A Term Notes referred to in the Credit
Agreement, dated as of October 31, 1991, and amended and restated as of October
30, 1992, and amended and restated as of June 4, 1993, and amended and restated
as of April 28, 1994, and further amended and restated as of January 26, 1996,
among the Borrower, Autotote Corporation, the lenders from time to time party
thereto (including the Bank) and Bankers Trust Company, as Agent (as from time
to time in effect, the "Agreement"), and is entitled to the benefits thereof and
the other Credit Documents (as defined in the Agreement). This Note is secured
by the Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Guaranties (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the A Term Loan Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. The Borrower hereby further waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Note.
This Note evidences certain loans that were initially made by the Bank
pursuant to the Original Credit Agreement (as defined in the Agreement) and
which remain outstanding on the date hereof under (and as provided in) the
Agreement.
EXHIBIT B-1
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
AUTOTOTE SYSTEMS, INC.
By____________________________
Title:
EXHIBIT B-2
-----------
B TERM NOTE
$__________ New York, New York
________ __, 1996
FOR VALUE RECEIVED, AUTOTOTE SYSTEMS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of
___________________________________(the "Bank"), in lawful money of the United
States of America in immediately available funds, at the office of Bankers Trust
Company (the "Agent") located at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 on the B Term Loan Maturity Date (as defined in the Agreement referred to
below) the principal sum of _____________ DOLLARS ($__________) or, if less, the
then unpaid principal amount of all B Term Loans (as defined in the Agreement)
made by the Bank pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the B Term Notes referred to in the Credit
Agreement, dated as of October 31, 1991, and amended and restated as of October
30, 1992, and amended and restated as of June 4, 1993, and amended and restated
as of April 28, 1994, and further amended and restated as of January 26, 1996,
among the Borrower, Autotote Corporation, the lenders from time to time party
thereto (including the Bank) and Bankers Trust Company, as Agent (as from time
to time in effect, the "Agreement"), and is entitled to the benefits thereof and
the other Credit Documents (as defined in the Agreement). This Note is secured
by the Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Guaranties (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the B Term Loan Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. The Borrower hereby further waives all
right to a trial by jury in any action proceeding or counterclaim arising out of
or relating to this Note.
This Note evidences certain loans that were initially made by the Bank
pursuant to the Original Credit Agreement (as defined in the Agreement) and
which remain outstanding on the date hereof under (and as provided in) the
Agreement.
EXHIBIT B-2
-----------
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
AUTOTOTE SYSTEMS, INC.
By____________________________
Title:
EXHIBIT B-3
-----------
REVOLVING NOTE
--------------
$___________ New York, New York
________ __, 1996
FOR VALUE RECEIVED, AUTOTOTE SYSTEMS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of ______________________
(the "Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Bankers Trust Company (the "Agent") located at
Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the Final Maturity Date (as
defined in the Agreement referred to below) the principal sum of _______________
DOLLARS ($______________) or, if less, the then unpaid principal amount of all
Revolving Loans (as defined in the Agreement) made by the Bank pursuant to the
Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, dated as of October 31, 1991, and amended and restated as of October
30, 1992, and amended and restated as of June 4, 1993, and amended and restated
as of April 28, 1994, and further amended and restated as of January 26, 1996,
among the Borrower, Autotote Corporation, the lenders from time to time party
thereto (including the Bank) and Bankers Trust Company, as Agent (as from time
to time in effect, the "Agreement"), and is entitled to the benefits thereof and
the other Credit Documents (as defined in the Agreement). This Note is secured
by the Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Guaranties (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the Final Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. The Borrower hereby further waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Note.
This Note evidences certain loans that were initially made by the Bank
under the Original Credit Agreement (as defined in the Agreement) and which
remain outstanding on the date hereof under (and as provided in) the Agreement,
as well as all additional Revolving Loans made by the Bank on or after the date
hereof pursuant to the Agreement.
EXHIBIT B-3
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
AUTOTOTE SYSTEMS, INC.
By_____________________________
Title:
EXHIBIT B-4
-----------
SWINGLINE NOTE
--------------
$__________ New York, New York
________ __, 1996
FOR VALUE RECEIVED, AUTOTOTE SYSTEMS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of BANKERS TRUST COMPANY
(the "Bank"), in lawful money of the United States of America in immediately
available funds, at the office of Bankers Trust Company (the "Agent") located at
Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on the Swingline Expiry Date
(as defined in the Agreement referred to below) the principal sum of
_____________ DOLLARS ($__________) or, if less, the then unpaid principal
amount of all Swingline Loans (as defined in the Agreement) made by the Bank
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is the Swingline Note referred to in the Credit Agreement,
dated as of October 31, 1991, and amended and restated as of October 30, 1992,
and amended and restated as of June 4, 1993, and amended and restated as of
April 28, 1994, and further amended and restated as of January 26, 1996, among
the Borrower, Autotote Corporation, the lenders from time to time party thereto
(including the Bank) and Bankers Trust Company, as Agent (as from time to time
in effect, the "Agreement"), and is entitled to the benefits thereof and the
other Credit Documents (as defined in the Agreement). This Note is secured by
the Security Documents (as defined in the Agreement) and is entitled to the
benefits of the Guaranties (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the Swingline Expiry Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. The Borrower hereby further waives all
rights to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Note.
This Note evidences certain loans that were initially made by the Bank
under the Original Credit Agreement (as defined in the Agreement) and which
remain outstanding on the date hereof under (and as provided in) the Agreement,
as well as all additional Swingline Loans made by the Bank on or after the date
hereof pursuant to the Agreement.
EXHIBIT B-4
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
AUTOTOTE SYSTEMS, INC.
By____________________________
Title:
EXHIBIT C
---------
LETTER OF CREDIT REQUEST
------------------------
No. /1/ Dated /2/
----- ---------
Bankers Trust Company, as Agent
under the Credit Agreement, dated as of
October 31, 1991, and amended and restated
as of October 30, 1992, and amended and
restated as of June 4, 1993, and amended and
restated as of April 28, 1994, and further
amended and restated as of January 26, 1996
(as further amended, modified or supplemented
from time to time, the "Credit Agreement"),
among Autotote Corporation, Autotote Systems,
Inc., the lenders from time to time party
thereto and Bankers Trust Company, as Agent
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: ______________
[NAME AND ADDRESS
OF ISSUING BANK]
[Attention:______________]
Dear Sirs:
The undersigned, an Authorized Representative of Autotote Systems,
Inc., hereby requests that [Name of Issuing Bank], in its individual capacity,
issue a [Standby][Trade] Letter of Credit for the account of Autotote Systems,
Inc. on /3/ (the
------
____________________________
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Date of Issuance which shall be at least 5 Business Days from the date
hereof (or such shorter period as is acceptable to the respective Issuing
Bank).
EXHIBIT C
Page 2
"Date of Issuance") in the aggregate Stated Amount of /4/ . The requested
--------
Letter of Credit shall be denominated in /5/ .
--------
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be /6/ ,
-------
and such Letter of Credit will be in support of /7/ and will have a stated
---------
expiration date of /8/ .
---------
[The requested Letter of Credit will be subject to the provisions of
Section 2.01(e) of the Credit Agreement, and the undersigned hereby agrees to
take any and all actions required to be taken in connection with maintaining
such requested Letter of Credit pursuant to the terms and conditions of Section
2.01(e) of the Credit Agreement.]/9/
--
______________________________
(4) Aggregate initial Stated Amount of Letter of Credit.
(5) Specify U.S. Dollars, Deutsche Marks, French Francs, Canadian Dollars,
Dutch Guilders, British Pounds Sterling, Japanese Yen, Korean Won, Hong
Kong Dollars, Mexican Pesos or such other currency which is acceptable to
the Agent and the Issuing Bank.
(6) Insert name and address of beneficiary.
(7) Insert description of L/C Supportable Indebtedness and describe
obligation to which it relates.
(8) Insert last date upon which drafts may be presented which may not be later
than (A) in the case of Standby Letters of Credit, the earliest of (x) the
date which occurs 12 months after the Date of Issuance, (y) the Final
Maturity Date and (z) in the case of a Standby Letter of Credit subject to
Section 2.01(e) of the Credit Agreement, the date which occurs 6 months
after the Final Maturity Date and (B) in the case of Trade Letters of
Credit, the earlier of (x) the date which occurs 180 days after the Date
of Issuance and (y) the date which occurs 30 days prior to the Final
Maturity Date.
(9) To be inserted for requested Standby Letters of Credit with an
expiration date
(continued...)
EXHIBIT C
Page3
The undersigned hereby certifies that:
(1) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents will be true and correct in all
material respects, both before and after giving effect to the issuance of
the Letter of Credit requested hereby, as though made on such date (it being
understood and agreed that any representation or warranty which by its terms
is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date); and
(2) no Default or Event of Default has occurred and is continuing or,
after giving effect to the issuance of the Letter of Credit requested
hereby, would such a Default or Event of Default occur.
Copies of all documentation with respect to the supported transaction
are attached hereto.
[AUTOTOTE CORPORATION]
[AUTOTOTE SYSTEMS, INC.]
By_____________________________
Name:
Title:
______________________________
/(9)/(...continued)
occurring after the Final Maturity Date.
EXHIBIT D
---------
Section 4.04(b)(ii) Certificate
-------------------------------
Reference is hereby made to the Credit Agreement, dated as of October
31, 1991, and amended and restated as of October 30, 1992, and amended and
restated as of June 4, 1993, and further amended and restated as of April 28,
1994, as further modified, supplemented and amended to the date hereof (the
"Credit Agreement"), among Autotote Corporation, Autotote Systems, Inc., the
lenders from time to time party thereto and Bankers Trust Company, as Agent.
Pursuant to the provisions of Section 4.04(b)(ii) of the Credit Agreement, the
undersigned hereby certifies that it is not a "bank" as such term is used in
Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By________________________
Title:
Date:
EXHIBIT E
---------
WARRANT AGREEMENT
WARRANT AGREEMENT (as amended, modified or supplemented from time to
time, this "Agreement"), dated as of January 26, 1996, among Autotote
Corporation, a corporation incorporated under the laws of the State of Delaware
(with its successors, the "Company") and the undersigned initial holders of the
Warrants referred to below (the "Initial Holders").
W I T N E S S E T H :
-------------------
WHEREAS, the Company, Autotote Systems, Inc. (the "Borrower"), certain
lenders from time to time party thereto (the "Banks"), and Bankers Trust
Company, as agent for such Banks, are parties to a Credit Agreement, dated as of
October 31, 1991, and amended and restated as of October 30, 1992, and amended
and restated as of June 4, 1993, and amended and restated as of April 28, 1994,
and further amended and restated as of January 26, 1996 (as so amended and
restated, and as the same may be further modified, amended or supplemented from
time to time, the "Credit Agreement");
WHEREAS, in order to induce the Banks to enter into the Credit
Agreement, the Company had agreed to issue the Warrants to the Initial Holders;
WHEREAS, the Company has authorized the issuance of the Warrants which
are exercisable, pursuant to the terms and conditions thereof, for shares of
Class A Common Stock (as hereinafter defined) of the Company; and
WHEREAS, the Initial Holders now desire to subscribe for, and the
Company now desires to issue to the Initial Holders, upon the terms and
conditions set forth herein, the Warrants substantially in the form of Exhibit A
hereto;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
EXHIBIT E
Page 2
Section I. Definitions.
-----------
A. Definitions. The following terms, as used herein, shall have the following
-----------
respective meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly controls, or is under common control with, or is
controlled by, such Person, it being understood that in any event the Borrower
and its Affiliates shall be considered Affiliates of the Company. As used in
this definition, "control" (including, with its correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of power to direct or
cause the direction of the management and policies of such Person (whether
through ownership of securities or partnership or other ownership interests,
contract or otherwise), provided that, in any event (other than for purposes of
--------
Section 4.04 hereof), any Person which owns, directly or indirectly, more than
10% of the securities having ordinary voting power for the election of directors
or other governing body of a corporation or more than 10% of the partnership or
other ownership interests of any Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
Notwithstanding the foregoing, neither the Initial Holders nor any of their
Affiliates shall be deemed to be an Affiliate of the Company.
"Bank Holder" shall mean the Initial Holders and any other Holder that
becomes a Bank under the Credit Agreement or is an Affiliate of a Bank.
"Banks" shall have the meaning provided in the first recital hereof.
"Borrower" shall have the meaning provided in the first recital
hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or any
other day on which commercial banks are required by law or authorized to close
in New York City.
"Class A Common Stock" shall mean and include the Company's authorized
Class A Common Stock, $.01 par value, as constituted on the date hereof.
"Commission" shall have the meaning provided in Section 4.06 hereof.
"Company" shall have the meaning provided in the first paragraph
hereof.
EXHIBIT E
Page 3
"Credit Agreement" shall have the meaning provided in the first
recital hereof.
"Demand Registration" shall have the meaning provided in Section
5.01(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exercise Period" shall mean the period of time from January 26, 1996
until 5:00 P.M., local time in New York City, on April 30, 1998.
"Exercise Price" shall have the meaning provided in the Warrants.
"Existing Rights Holder" shall mean any Person to whom the Company has
issued warrants to purchase common stock of the Company prior to the date hereof
but only if such warrants contain registration rights provisions requiring the
Company not to effect any public sale or distribution of its securities during
specified periods prior to and after the registration of such common stock
pursuant to the exercise of such registration rights.
"GAAP" shall mean generally accepted accounting principles as in
effect from time to time in the United States.
"Holder" initially shall mean each Initial Holder and each other
holder of any Warrant or Warrant Share that is a direct or indirect transferee
of one of the Initial Holders or any other Holder unless, with respect to any
such Warrant or Warrant Share, such Warrant or Warrant Share is acquired in a
public distribution pursuant to a registration statement under the Securities
Act or pursuant to a transaction exempt from registration under the Securities
Act if securities sold in such transaction may be resold without subsequent
registration under the Securities Act.
"Initial Holders" shall have the meaning provided in the first
paragraph hereof.
"Xxxxxx Demand Rights" shall have the meaning provided in Section 5.03
hereof.
EXHIBIT E
Page 4
"Xxxxxx Shares" shall have the meaning provided in Section 5.03
hereof.
"Xxxxxx Warrants" shall have the meaning provided in Section 5.03
hereof.
"Person" shall mean an individual, a corporation, a limited liability
company, a company, a voluntary association, a general partnership, a limited
partnership, a trust, an unincorporated organization or a government or any
agency, instrumentality or political subdivision thereof.
"Piggy-Back Registration" shall have the meaning provided in Section
5.02 hereof.
"Registrable Securities" shall mean any Warrants or Warrant Shares
until (i) one or more registration statements covering any such Warrants and
Warrant Shares has become effective under the Securities Act and all such
Warrants and Warrant Shares have been disposed of pursuant to such effective
registration statement, (ii) such Warrants or Warrant Shares are sold under
circumstances in which all of the applicable conditions of Rule 144 (or any
similar provisions then in force) under the Securities Act are met or under
which such Warrants and Warrant Shares may be sold pursuant to Rule 144(k),
(iii) the Company has delivered a new certificate or other evidence of ownership
for such Warrants or Warrant Shares not bearing any legend relating to
restrictions on transfer and such Warrants or Warrant Shares may be resold
without subsequent registration under the Securities Act or (iv) such Warrants
and Warrant Shares are no longer outstanding.
"Registration Expenses" shall have the meaning ascribed to such term
in Section 5.05 hereof.
"Regulation Y" shall mean the Regulation Y promulgated by the Board of
Governors of the Federal Reserve System or any successor regulation.
"Required Holders" shall mean the Holders of more than 50% of all
Warrant Shares (assuming the full exercise thereof), provided that the term
Required Holders shall mean the Holders of all Warrant Shares in the case of any
amendment, modification or waiver to this Agreement or any Warrant which would
shorten the Exercise Period, increase the Exercise Price or reduce the number of
Warrant Shares issuable upon the exercise of any Warrant.
"Securities Act" shall mean the Securities Act of 1933, as amended.
EXHIBIT E
Page 5
"Suspension Period" shall have the meaning provided in Section 5.01(f)
hereof.
"Warrant" shall mean a Warrant substantially in the form of Exhibit A
hereto, and any Warrant or Warrants issued upon transfer thereof or in
substitution therefor.
"Warrantholder" shall mean the holder of any Warrant.
"Warrant Share" shall mean any share of Class A Common Stock issued or
issuable upon exercise of any Warrant. For purposes of this Agreement, a
Warrant Share shall be "outstanding" from and after the date hereof until the
redemption or cancellation of such Warrant Share (or, if the related Warrant has
not been exercised, the expiration, repurchase or cancellation of such Warrant)
by the Company.
B. Accounting Terms and Determinations. Unless otherwise specified herein,
-----------------------------------
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters required to be
delivered hereunder shall be prepared, in accordance with GAAP.
Section II. Terms and Conditions of Issuance of Warrants.
--------------------------------------------
A. Issuance of the Warrants. In consideration of the premises and other good
------------------------
and valuable consideration, the Company hereby agrees to issue on the date
hereof to each Initial Holder Warrants to purchase that number of shares of
Class A Common Stock (as such number may be adjusted as provided in the
Warrants) as is set forth on Schedule A hereto for each such Initial Holder.
Section III. Representations and Warranties of the Company. The
---------------------------------------------
Company represents and warrants to each Holder as follows:
A. Authorization. The Company has all necessary power and authority to
-------------
execute, deliver and perform its obligations under this Agreement and the
Warrants and to issue and deliver the Warrants and Warrant Shares; the
execution, delivery and performance by the Company of this Agreement and the
Warrants have been duly authorized by all necessary action; each of this
Agreement and each of the Warrants has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the
EXHIBIT E
Page 6
Company enforceable in accordance with its terms, subject, as to enforceability,
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws relating to creditors' rights generally and to
general equitable principles.
B. Valid Issuances. The Warrants, when issued and delivered pursuant hereto,
---------------
and the Warrant Shares when issued and delivered pursuant to the Warrants, will
be validly issued, fully paid and non-assessable, with no liability on the part
of the Holders thereof, and are not subject to any preemptive rights, rights of
first refusal or rights of first offer. Except as set forth on Schedule B
hereto and except for the registration rights as set forth in this Agreement,
the Company is not under any obligation to cause the registration under the
Securities Act of any of its presently outstanding securities or any of its
securities which hereafter may be issued.
C. No Breach. Except for the filing of a listing application with the NASDAQ
---------
National Market System in respect of the Warrant Shares issuable upon exercise
of the Warrants (which filing will be made within 15 days after the date
hereof), none of the execution and delivery of this Agreement and the Warrants,
the consummation of the transactions herein or therein contemplated, including
the issuance and delivery of the Warrants and, upon the exercise of the
Warrants, the Warrant Shares, nor compliance with the terms and provisions
hereof or thereof will conflict with or result in a breach of, or require any
consent under, the Certificate of Incorporation or By-Laws of the Company, or
any applicable law or regulation, or any order, writ, injunction or decree of
any court or governmental authority or agency, or any agreement or instrument to
which the Company is a party or by which it is bound or to which any of its
properties or assets is subject, or constitute a default under any such
agreement or instrument or result in the creation or imposition of any lien upon
any of the revenues or assets of the Company pursuant to the terms of any such
agreement or instrument.
D. Approvals. Except for the filing of a listing application with the NASDAQ
---------
National Market System in respect of the Warrant Shares issuable upon exercise
of the Warrants (which filing will be made within 15 days after the date
hereof), no authorizations, approvals or consents of, and no filings or
registrations with, any governmental or regulatory authority or agency, which
have not already been made or obtained, are necessary to be obtained by the
Company for the execution, delivery or performance by the Company of this
Agreement and the Warrants, the consummation by the Company of the transactions
contemplated herein and therein or the validity or enforceability hereof or
thereof.
EXHIBIT E
Page 7
E. Capitalization. The authorized capital stock of the Company on the date
--------------
hereof consists of (99,300,000 shares of Class A Common Stock, of which
30,942,295 shares are issued and outstanding and 68,357,705 shares are held in
the treasury of the Company, (ii) 700,000 shares of Class B Nonvoting Common
Stock, $.01 par value, of which no shares are issued and outstanding, and (i
2,000,000 shares of Preferred Stock, $1.00 par value, of which no shares are
issued and outstanding, all as more fully set forth on Schedule C hereto. There
are no other outstanding shares of capital stock of the Company and, except for
the Warrants and as set forth on Schedule C hereto, no outstanding options or
warrants to acquire any shares of capital stock of the Company and there will be
no securities convertible into or exchangeable for, or options or other rights
to acquire from the Company or other obligations of the Company to issue,
directly or indirectly, any shares of capital stock of the Company.
F. Offer of Warrants. Neither the Company nor any Person acting on its
-----------------
behalf has directly or indirectly offered the Warrants or any part thereof or
any similar securities for sale to, or solicited any offer to buy any of the
same from, or otherwise approached or negotiated in respect thereof with, any
Person other than a Holder. Neither the Company nor any Person acting on its
behalf has taken or will take any action which would subject the issuance and
sale of the Warrants to the provisions of Section 5 of the Securities Act, or to
the provisions of any state securities law requiring registration of
securities, notification of the issuance or sale thereof or confirmation of
the availability of any exemption from such registration except pursuant to this
Agreement.
Section IV. Covenants.
---------
A. Maintenance of Existence; Conduct of Business. The Company will preserve
---------------------------------------------
and maintain its corporate existence as a corporation under the Delaware General
Corporation Law and all of its rights, privileges and franchises necessary in
the ordinary course of its business, and will conduct its business in a regular
manner.
B. Inspection. The Company covenants and agrees that it will permit each
----------
Holder and its representatives to inspect the properties of the Company, to
examine and make extracts and copies from the books and records of the Company
during normal business hours and to discuss with management the business and
affairs of the Company, in each case on the same basis as a shareholder of the
Company may exercise such rights or to the extent reasonably necessary to
protect such Holder's rights under this Agreement or to ensure such Holder's
compliance with applicable law.
EXHIBIT E
Page 8
C. Information. The Company covenants and agrees that it will deliver to
-----------
each Holder such financial statements and other information regarding the
Company or any of its subsidiaries that the Company is obligated to prepare and
deliver to any shareholder of the Company, in each case at the same time such
financial statements and other information are delivered to any such
shareholder. The Company hereby acknowledges and agrees that each Holder may
share with any of its Affiliates any information related to the Company and any
of its subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Company and its subsidiaries),
subject to appropriate confidentiality arrangements.
D. Repurchase of Common Stock. The Company covenants and agrees that it will
--------------------------
not, without the prior written consent of each affected Bank Holder, to the
extent that such Bank Holder is subject to the provisions of the Bank Holding
Company Act of 1956, as amended (including Regulation Y promulgated thereunder),
directly or indirectly, purchase, redeem, retire or otherwise acquire any shares
of capital stock of the Company if, as a result of such purchase, redemption,
retirement or other acquisition, any Bank Holder, together with its Affiliates,
will own, or be deemed to own, Warrant Shares or other shares of capital stock
of the Company representing capital equal to 5% or more of the aggregate shares
of capital stock of the Company then outstanding (assuming the full exercise of
all Warrants then held by such Bank Holder and its Affiliates).
E. Regulatory Matters. The Company agrees to cooperate in good faith with
------------------
and assist any Bank Holder or any of the Bank Holder's Affiliates as such Bank
Holder may reasonably request in connection with any United States regulatory
issues that may arise from time to time with respect to the Company. Anything
herein or in the Warrants to the contrary notwithstanding, in the event that any
Bank Holder or any of such Bank Holder's Affiliates shall determine that it is
illegal or unduly burden some, by reason of regulatory restriction, for such
Bank Holder or such Affiliate to continue to hold some or all of the Warrants or
its Warrant Shares or any other securities of the Company held by it, such Bank
Holder or such Affiliate, as the case may be, may sell or otherwise dispose of
that portion of its Warrants or Warrant Shares, as the case may be, that such
Bank Holder or such Affiliate determines to be appropriate in light of such
regulatory restrictions in as prompt and orderly a manner as is reasonably
necessary. The Company shall cooperate with and assist such Bank Holder or such
Affiliate, as the case may be, in disposing of such Warrants or Warrant Shares,
and (without limiting the foregoing) at the request of such Bank Holder or such
Affiliate, as the case may be, the Company shall provide (and authorize such
Bank Holder or such Affiliate, as the case may be, to provide) financial and
other information concerning the Company to any prospective purchaser of
EXHIBIT E
Page 9
the Warrants or Warrant Shares owned by such Bank Holder or such Affiliate, as
the case may be, subject to appropriate confidentiality arrangements. The
provisions of this Section 4.05 shall inure solely to the benefit of such Bank
Holders and their Affiliates which are subject to the provisions of the Bank
Holding Company Act of 1956, as amended (including Regulation Y promulgated
thereunder).
F. Rules 144 and 144A. The Company covenants that it will file any reports
------------------
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Required Holders may reasonably
request, all to the extent required from time to time to enable the Holders to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rules 144 and 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rules or regulations or regulations hereafter adopted by the Securities
and Exchange Commission (the "Commission"). Upon the request of any Holder, the
Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
Section V. Registration Rights.
-------------------
A. Demand Registration Rights. Demand Registrations. At any time
-------------------------- --------------------
after September 14, 1996 and prior to the expiration of the Exercise Period, the
Required Holders may make a written request to the Company for registration of
Registrable Securities under the Securities Act with the Commission (or any
successor entity) for a public offering of Registrable Securities (a "Demand
Registration"). The Holders shall have the right, in the aggregate, to one (1)
Demand Registration of all or any part of their Registrable Securities (which
Demand Registration may be on Form S-2 or S-3 or other short-forms if the
Company then qualifies for such short form registration), provided, however,
-------- -------
that the Company shall not be required to effect a registration pursuant to this
Section 5.01 with respect to any Registrable Securities unless the request for
registration covers Registrable Securities representing at least 50% of all
Registrable Securities then outstanding and held by the Holders. Whenever the
Company shall receive a request for a Demand Registration, the Company will
promptly give written notice of such registration to all Holders and shall as
expeditiously as is reasonable, use its best efforts to effect the registration
under the Securities Act of the Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 30 Business
Days after such notice is given. All requests made pursuant to this Section
5.01(a) will specify the number of shares of Registrable Securities to be
registered and will also specify the intended methods of disposition thereof.
EXHIBIT E
Page 10
1. Effective Registration. A registration initiated as a Demand Registration
----------------------
shall not be deemed a Demand Registration (i) until a registration statement
with respect thereto has become effective and has remained effective for the
period of time in which the Company is required to keep such registration
statement effective under this Agreement (without giving effect to any
Suspension Period), provided, however, that a registration that does not become
-------- -------
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal to proceed of the Holders shall be
deemed to have been effected by the Company, unless the Holders shall have
elected (without any obligation) to pay, and in fact pay (within 30 days after
the Company receives notice of such refusal to proceed of the Holders), all
Registration Expenses in connection with such registration, (ii) if after such
registration statement has become effective, such registration statement is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason and, as a
result thereof, the offering of Registrable Securities is terminated prior to
the sale thereof, unless after giving effect to any termination the Holders had
a period of 120 consecutive days during which they were permitted to sell their
Registrable Securities pursuant to such registration statement, (iii) if after
such registration statement has become effective, the Company exercises any of
its rights under Section 5.01(f) hereof, unless after giving effect to any
termination of a Suspension Period the Holders had a period of 120 consecutive
days during which they were permitted to sell their Registrable Securities
pursuant to such registration statement or (iv) if conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied or waived, other than solely
by reason of some act or omission of the Holders.
2. No Right of Company or Other Person to Piggyback on Demand Registrations.
------------------------------------------------------------------------
Neither the Company nor any Person owning any of its securities (other than the
Holders) shall have the right to include any of the Company's securities in a
registration statement initiated as a Demand Registration under this Section
5.01, unless (i) such securities are of the same class and type as the
Registrable Securities being registered and (ii) if such Demand Registration is
an underwritten offering, the Company or such Person, as applicable, agree in
writing to sell their securities on the same terms and conditions as apply to
the Registrable Securities being sold. Subject to the registration rights
granted by the Company prior to the date hereof, if any Person owning any
securities of the Company (other than any Holder) registers securities of the
Company in a Demand Registration (in accordance with the provisions of this
Section 5.01(c)), such Person shall pay the fees and expenses of counsel to such
Person and its pro rata share of the Registration Expenses if the Registration
--- ----
Expenses for such registration are not paid by the Company for any reason. The
Company covenants that it shall not grant any registration rights to any
EXHIBIT E
Page 11
Person which rights would conflict or be inconsistent with the provisions of
this Section 5.01(c) or which would otherwise adversely affect the rights of any
Holder under this Agreement, and in the event of such a conflict or
inconsistency, the terms of this Section 5.01(c) shall prevail.
3. Selection of Underwriters and Counsel, Etc. If the Required Holders so
-------------------------------------------
elect, the offering of such Registrable Securities pursuant to such Demand
Registration shall be in the form of an underwritten offering. If a Demand
Registration involves an underwritten offering, (i) the Company shall have the
right to select the investment banker or bankers and manager or managers to
administer the offering (provided that such investment bankers and managers must
be reasonably satisfactory to the Required Holders) and (ii) the Required
Holders shall have the right to select the counsel to represent the Holders.
4. The Company may delay the filing of a registration statement for up to 60
days (120 days in the case of clauses (iv) and (v) of this Section 5.01(e)) if
at the time of a request for registration under Section 5.01(a) above, (i) the
Company is a party to a transaction involving the purchase, sale, conversion or
issuance of securities of the Company (other than a transaction which is
specifically not prohibited in Rule 10b-6 promulgated by the Commission under
the Exchange Act), (ii) there is material undisclosed information concerning the
Company or any subsidiary of the Company which cannot be disclosed for bona fide
and significant business reasons, (iii) financial statements required to be
included or incorporated in the registration statement have not been prepared or
are otherwise not available, (iv) the Company is about to commence an offering
of securities of the Company and the investment banker for the Company shall
advise the Company in writing (with a copy to the Holders) that, in its opinion,
the offering contemplated by the Company would be materially and adversely
affected by the sale of Registrable Securities by the Holders or (v) the Company
estimates in good faith that it will file within 30 days after such request a
registration statement pursuant to a demand made by an Existing Rights Holder or
pursuant to which an Existing Rights Holder will include shares of common stock
of the Company held by it. The Company shall promptly notify the Holders of any
delay in such filing, the reasons for such delay and proposed length of such
delay.
5. The Company may suspend the effectiveness of any registration statement or,
without suspending such effectiveness, instruct the Holders that no sales of
Registrable Securities included in such registration statement may be made (and
the Holders shall forthwith discontinue disposition of any such Registrable
Securities) if, in the Company's reasonable good faith judgment, the Company
would be required to disclose any actions taken or
EXHIBIT E
Page 12
proposed to be taken by the Company, which disclosure would have a material
adverse effect on the Company or on such actions (a "Suspension Period") by
providing the Holders with written notice of such Suspension Period and the
reasons therefor. The Company shall use its best efforts to provide such notice
a reasonable number of days prior to the commencement of a Suspension Period,
provided that in any event the Company shall provide such notice no later than
the commencement of such Suspension Period. The Suspension Period shall not
exceed 90 days in any consecutive 365 day period during the Exercise Period,
provided that no more than one Suspension Period may be commenced in any such
365 day period. The Company shall give prompt written notice to the Holders of
the termination of any Suspension Period.
B. Piggy-Back Registration. If, at any time or from time to time while any
-----------------------
Registrable Securities are outstanding, the Company proposes to register any of
its securities (whether for its own or others' account) to be offered for cash
or cash equivalents in a public offering under the Securities Act (other than by
a registration statement on Form S-8 or other form that does not include
substantially the same information as would be required in a form for the
general registration of securities or that would not be available for
registration of Registrable Securities), the Company shall, as expeditiously as
is reasonably possible (but in no event later than 45 days prior to any such
registration), give written notice to the Holders of the Company's intention to
effect such registration. If, within 30 days after receipt of such notice, any
Holder submits a written request to the Company specifying the Registrable
Securities such Holder proposes to sell or otherwise dispose of (a "Piggy-Back
Registration"), the Company shall include the number of shares of Registrable
Securities specified in such Holder's request in such registration statement and
the Company shall use its best efforts to keep each such registration statement
in effect and to maintain compliance with each Federal and state law and
regulation for the period necessary for such Holder to effect the proposed sale
or other disposition, provided, however, that if, at any time after giving
-------- -------
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine not to register or to delay
registration of such securities, the Company shall give written notice of such
determination to the Holders and, thereupon, (i) in the case of a determination
not to register any securities, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from any obligation of the Company to pay the Registration Expenses in
connection therewith), and (ii) in the case of a determination to delay
registering any securities, the Company shall be permitted to delay registering
any Registrable Securities, for the same period as the delay in registering such
other securities; and, provided, further, that if, after any such registration
-------- -------
statement has been declared
EXHIBIT E
Page 13
effective, the Company reasonably determines that it would be required to
disclose any actions taken or proposed to be taken by the Company, which
disclosure would have a material adverse effect on the Company or on such
actions, the Company shall, subject to discontinuance of sales of all other
securities covered by the registration statement, be entitled to suspend the
effectiveness of such registration statement, or without suspending such
effectiveness, to request that each Holder forthwith discontinue the disposition
of such Registrable Securities and each such Holder agrees that it will
discontinue the disposition of such Registrable Securities pursuant to such
registration statement (so long as the disposition of all other such securities
is also discontinued) and thereupon the Company shall be relieved of its
obligation under this Section 5.02 with respect to such registration (but not
from its obligation to pay the Registration Expenses in connection therewith to
the extent provided in Section 5.05). Any Holder participating in an
underwritten offering pursuant to this Section 5.02 shall, if required by the
managing underwriter or underwriters of such offering, enter into an
underwriting agreement in a form customary for underwritten offerings of the
same general type as such offering.
C. Reduction of Offering. Notwithstanding anything contained herein, if the
---------------------
managing underwriter or underwriters of an offering described in Section 5.01 or
5.02 hereof delivers a written opinion to the Holders that the size of the
offering that the Holders, the Company or any other Person intends to make or
the kind or combination of securities that the Holders, the Company and any
other Persons intend to include in such offering are such that the success of
the offering would be materially and adversely affected by inclusion of the
Registrable Securities requested to be included, then:
(x) in the case of a Demand Registration, the amount of any securities
proposed to be offered shall be reduced or excluded from the offering as
follows:
if shares of common stock of the Company issued or issuable
pursuant to the warrants heretofore issued to Xxxxxx Brothers
Finances S.A. and Pilgrim Prime Rate Trust (such warrants, the
"Xxxxxx Warrants", and such shares, the "Xxxxxx Shares") are
proposed to be included in the underwriting as a result of the
exercise of incidental registration rights previously granted
under the Xxxxxx Warrants, then the number of shares that shall
be included in the underwriting shall be allocated as follows:
(a) one Xxxxxx Share shall be included for each share held by the
Holders and all other holders of common stock of the Company
possessing registration rights whose shares are to be included in
the under writing and any shares to be sold for the account of
the Company (collectively, the "Non-Xxxxxx
EXHIBIT E
Page 14
Shares") until either the limit is reached or all the Xxxxxx
Shares are included in the underwriting and (b) any excess shares
up to such limitation shall be Non-Xxxxxx Shares. In allocating
Non-Xxxxxx Shares under clauses (a) and (b) of the immediately
preceding sentence, or in the event that no Xxxxxx Shares are
proposed to be included in the underwriting, the amount allocated
shall be such that each holder of Non-Xxxxxx Shares may include
in the underwriting that portion of the amount to be allocated
which the number of shares proposed to be included by such holder
bears to the aggregate number of shares proposed to be included
by holders of all Non-Xxxxxx Shares, provided that,
notwithstanding the foregoing provisions of this sentence, all of
the Non-Xxxxxx Shares held by the Holders shall be included in
any such Demand Registration before any Non-Xxxxxx Shares held by
the Company or the holders of any Non-Xxxxxx Shares that have
been granted piggy-back registration rights after the date hereof
are included in such Demand Registration; provided, further, that
-------- -------
if any Non-Xxxxxx Shares held by the holders thereof under the
September 1995 Warrant Agreement (as defined in the Credit
Agreement) are proposed to be included in the underwriting then
all such Non-Xxxxxx Shares shall be included (together with any
other Non-Xxxxxx Shares entitled to be included with the Non-
Xxxxxx Shares held by such holders) before any Non-Xxxxxx Shares
held by the Holders are included; and
(y) in the case of a Piggy-Back Registration, the amount of any
securities proposed to be offered shall be reduced or excluded from the
offering as follows:
(i) if the registration is initiated as a result of the exercise
by a holder of Xxxxxx Shares of demand registration rights
("Xxxxxx Demand Rights"), then the number of shares to be
included in the underwriting shall be allocated as follows: (a)
all Xxxxxx Shares to be sold shall be included and (b) any
additional shares to be included shall be allocated pursuant to
the last sentence of 5.03(x) above and (ii) if the registration
is not initiated as a result of the exercise of Xxxxxx Demand
Rights, then the number of shares of Non-Xxxxxx holders not
initiating the registration which may be included therein shall
be allocated as set forth in the last sentence of 5.03(x) above,
subject to Section 5.03(x)(a) above if Xxxxxx Shares are included
as a result of the exercise of incidental registration rights
relating thereto; provided, that, in each case, if any Non-Xxxxxx
Shares held by the holders thereof under the September 1995
Warrant Agreement are proposed to be
EXHIBIT E
Page 15
included in the underwriting then all such Non-Xxxxxx Shares
shall be included (together with any other Non-Xxxxxx Shares
entitled to be included with the Non-Xxxxxx Shares held by such
holders) before any Non-Xxxxxx Shares held by the Holders are
included.
D. Registration Procedures. Whenever the Required Holders
-----------------------
request that any Registrable Securities be registered pursuant to this Section
5, the Company will, subject to the limitations otherwise provided in this
Agreement, use its best efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof as quickly as is reasonably practicable, and in connection with any such
request:
1. The Company will as expeditiously as possible prepare and file with the
Commission a registration statement on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof, and
use its best efforts to cause such filed registration statement to become and
remain effective for a period of not less than 120 days or until all of such
Registrable Securities have been disposed of (if earlier).
2. The Company will, if requested, prior to filing a registration statement or
prospectus or any amendment or supplement thereto, furnish to the Holders
requesting registration of Registrable Securities and each underwriter, if any,
of the Registrable Securities covered by such registration statement copies of
such registration statement as proposed to be filed, and thereafter furnish to
the Holders requesting registration of Registrable Securities and underwriter,
if any, such number of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents as
the Holders requesting registration of Registrable Securities or underwriter may
reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Holders.
3. After the filing of the registration statement, the Company will promptly
notify the Holders of any stop order issued or threatened by the Commission and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
4. The Company will use its best efforts to (i) register or qualify the
Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the United
EXHIBIT E
PAGE 16
States as the Holders requesting registration of Registrable Securities
reasonably (in light of such Holders' intended plan of distribution) request and
(ii) cause such Registrable Securities to be registered with or approved by such
other governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other acts and things
that may be reasonably necessary or advisable to enable the Holders to
consummate the disposition of the Registrable Securities owned by the Holders;
provided that the Company will not be required to (A) qualify generally to do
--------
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (d), (B) subject itself to taxation in any such
jurisdiction or (C) consent to general service of process in any such
jurisdiction.
5. The Company will immediately notify the Holders, at any time when a
prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the purchasers
of such Registrable Securities, such prospectus will not contain an untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
promptly make available to the Holders any such supplement or amendment.
6. The Company will enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities.
7. The Company will make available for inspection by the Holders requesting
registration of Registrable Securities, any underwriter participating in any
disposition pursuant to such registration statement and any attorney, accountant
or other professional retained by such Holders or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any Inspectors in connection with
such registration statement. Records which the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the release of such Records is ordered pursuant
to a subpoena or other order from a court of competent jurisdiction. Each Holder
agrees that information obtained by it as a result of such inspections shall be
deemed confidential and
EXHIBIT E
Page 17
shall not be used by it as the basis for any market transactions in the
securities of the Company or its Affiliates unless and until such is made
generally available to the public.
8. The Company will furnish to the Holders requesting registration of
Registrable Securities and to each underwriter, if any, a signed counterpart,
addressed to such Holders or underwriter, of (i) an opinion or opinions of
counsel to the Company and (ii) a comfort letter or comfort letters from the
Company's independent public accountants, each in customary form and covering
such matters of the type customarily covered by opinions or comfort letters, as
the case may be.
9. The Company will otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available to the
Holders, as soon as reasonably practicable, an earnings statement covering a
period of 12 months, beginning within three months after the effective date of
the registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act.
10. The Company will (at its own expense) use its best efforts to cause all
such Registrable Securities to be listed on each securities exchange on which
similar securities issued by the Company are then listed if the listing of such
Registrable Securities is then permitted by the rules of such exchange.
The Company may require the Holders requesting registration of
Registrable Securities to promptly furnish in writing to the Company such
information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as
may be legally required in connection with such registration.
The Holders agree that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 5.04(c) or (e)
hereof, the Holders will forthwith discontinue disposition of any Registrable
Securities registered pursuant to this Section 5 pursuant to the registration
statement covering such Registrable Securities until any such stop order (if
entered) has been removed or the Holders' receipt of the copies of the
supplemented or amended prospectus contemplated by Section 5.04(e) hereof, and,
if so directed by the Company, the Holders will deliver to the Company all
copies, other than permanent file copies then in such Holders' possession, of
the most recent prospectus covering such Registrable Securities at the time of
receipt of such notice. In the event the Company shall give such notice, the
Company shall extend the period during which such registration statement shall
be maintained effective (including the period
EXHIBIT E
Page 18
referred to in Section 5.04(a) hereof) by the number of days during the period
from and including the date of the giving of notice pursuant to Section 5.04(c)
or (e) hereof, as the case may be, to the date when the Company shall have
removed any stop order that has been entered or the date that the Company shall
make available to the Holder a prospectus supplemented or amended to conform
with the requirements of Section 5.04(e) hereof, as the case may be.
E. Registration Expenses. In connection with any registration statement
---------------------
required to be filed hereunder, the Company shall pay the following registration
expenses incurred in connection with the registration hereunder (the
"Registration Expenses"): (i) all registration and filing fees, (ii) all fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv)
internal expenses of the Company (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), (v) the fees and expenses incurred in connection with the listing of
the Registrable Securities, (vi) fees and disbursements of counsel for the
Company and customary fees and expenses for independent certified public
accountants retained by the Company (in including the expenses of any comfort
letters or costs associated with the delivery by independent certified public
accountants of a comfort letter or comfort letters requested pursuant to Section
5.04(h) hereof), (vii) the fees and expenses of any special experts retained by
the Company in connection with such registration, and (viii) the reasonable fees
and expenses of one counsel (who shall be reasonably acceptable to the Company)
for the Holders. The Company shall have no obligation to pay any underwriting
fees, discounts or commissions attributable to the sale of Registrable
Securities, or any out-of-pocket expenses of Holders (other than as provided in
clause (viii) above) selling Registrable Securities under this Section 5 (or any
of the agents who manage any Holder's account).
F. Indemnification and Contribution. In connection with each registration
--------------------------------
statement relating to the disposition of Registrable Securities, the Company
shall indemnify and hold harmless each of the Holders, each underwriter of
Registrable Securities, each partner, officer, director or employee of each of
the Holders or any such underwriter and each Person, if any, who controls
(within the meaning of either the Securities Act or the Exchange Act) any of the
Holders or any such underwriter against all losses, claims, damages or
liabilities, joint or several, to which any of the Holders, such under writer or
any such Person may be subject arising out of or based upon (A) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement or the prospectus included therein (or any supplement or
amendment thereto) or a preliminary
EXHIBIT E
Page 19
prospectus, or (B) any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the state statements
therein not misleading, and the Company shall reimburse each of the Holders and
each of such other Persons for any reasonable legal or other expenses incurred
in connection with the investigation or defense thereof (any such reimbursement
to be made as such expenses are incurred); provided, however, that the Company
-------- -------
shall not be liable in any such instance to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue statement
or omission or alleged untrue statement or omission made in any such
registration statement, preliminary prospectus, or prospectus (or amendment or
supplement) in reliance upon and in con conformity with information relating to
any Person referred to above who would be indemnified by the Company pursuant to
this Section 5.06(a) to the extent that any such information is furnished in
writing to the Company by such Person expressly for use therein.
1. In connection with each registration relating to the disposition of
Registrable Securities, each Holder shall severally indemnify the Company, each
director of the Company, each officer of the Company who signs the registration
statement and any Person who controls the Company (within the meaning of either
the Securities Act or the Exchange Act) to the same extent as the indemnity from
the Company provided in Section 5.06(a) hereof, but only with respect to
information relating to such Holder furnished in writing to the Company by such
Holder expressly for use in any such registration statement, preliminary
prospectus or prospectus (or amendment or supplement). The maximum liability of
any Holder under this Section 5.06(b) shall be limited to the aggregate amount
of all sales proceeds actually received by such Holder upon the sale of such
Holder's Registrable Securities in connection with such registration.
2. In case any proceeding (including any governmental investigation) shall be
instituted involving any Person in respect of which indemnity may be sought
pursuant to subsections (a) or (b) of this Section 5.06, such Person (the
"indemnified party") shall promptly notify the Person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the indemnified party, and shall assume the
payment of all fees and disbursements related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (x) the indemnifying party and indemnified party
shall have mutually agreed to the retention of such counsel or (y) the named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and
EXHIBIT E
Page 20
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm (in addition to any local counsel) at
any time for all such indemnified parties, and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate firm
for the indemnified parties, such firm shall be designated in writing by the
indemnified parties. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent (which consent
shall not be unreasonably withheld or delayed) but if settled with such consent,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability arising out
of such proceeding.
3. If the indemnification provided for in this Section 5.06 is unavailable to
the indemnified parties in respect of any losses, claims, damages or liabilities
referred to herein, then each such indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities as
between the Company on the one hand and the respective Holder on the other, in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and such Holder on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the respective Holder on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by such party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and each Holder agree that it would not be just and
equitable if contribution pursuant to this Section 5.06(d) were determined by
pro rata allocation or by any other method of allocation which does not take
--- ----
account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities
EXHIBIT E
Page 21
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5.06(d), no Holder shall be required to contribute any amount in excess
of the amount of all sales proceeds actually received by such Holder upon the
sale of such Holder's Registrable Securities in connection with such
registration. No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
G. Participation in Underwritten Registrations. Subject to the registration
-------------------------------------------
rights granted by the Company prior to the date hereof, no Person may
participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Company and the Required Holders and
(b) completes and executes all question questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and these registration rights.
H. Holdback Agreement. (a) The Company and its Affiliates agree not to
------------------
effect any public sale or distribution of any Registrable Securities or any
securities similar to the Registrable Securities, or any securities convertible
into or exchangeable or exercisable for Registrable Securities or any securities
similar to the Registrable Securities, during the 14 days prior to, and during
the 90-day period beginning on, the later of the effective date of any
registration statement filed pursuant to Section 5.01 or 5.02 of this Agreement
(except as part of such registration statement where the Required Holders
consent) or the commencement of a public distribution of Registrable Securities;
provided, however, that the provisions of this paragraph shall not prevent the
-------- -------
(x) conversion or exchange of any securities pursuant to their terms into or for
other securities (it being understood that the foregoing includes the exercise
of warrants or options) or (y) issuance of securities pursuant to the Company's
employee benefit plans.
(b) To the extent not inconsistent with applicable law, each Holder
agrees not to effect any public sale or distribution of the issue being
registered or any similar security of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, during the 14 days
prior to and during the 90-day period beginning on the effective date of such
registration statement (except in any case as part of such registration), if and
to the extent requested by the Company in the case of a non-
EXHIBIT E
Page 22
underwritten public offering or if and to the extent requested by the managing
underwriter or underwriters in the case of an underwritten public offering.
I. Specific Enforcement. The Company and each of the Holders acknowledge
--------------------
that remedies at law for the enforcement of this Section 5 may be inadequate and
intend that this Section 5 shall be specifically enforceable in accordance with
Section 7.04 hereof.
Section VI. Compliance with the Securities Act.
----------------------------------
A. Representations and Warranties. Each Holder by its acceptance of the
------------------------------
Warrants represents and warrants as follows:
1. Such Holder is acquiring the Warrants and the related Warrant Shares for its
own account and not as nominee or agent for any other Person and not for offer
or sale in any manner that would be in violation of the securities laws of the
United States of America or any state thereof, without prejudice, however, to
its right at all times to sell or otherwise dispose of all or any part of said
Warrants or Warrant Shares under a registration under the Securities Act or any
applicable state securities laws or under an exemption from such registration
available under such Act or any applicable state securities laws.
2. Such Holder is an "accredited" investor within the meaning of Regulation D
promulgated under the Securities Act.
B. Transfer Restriction; Legend. No Holder will sell, transfer or otherwise
----------------------------
dispose of any Warrant or Warrant Share other than to an Affiliate of such
Holder or in a transaction that complies with the registration requirements of
Section 5 of the Securities Act or pursuant to an exemption (including, without
limitation, sales under Rules 144 and 144A promulgated under the Securities Act)
therefrom. Each Warrant or certificate or instrument (if any) representing the
Warrant Shares issued upon exercise of the Warrants (and each Warrant or
certificate or instrument (if any) representing the Warrant Shares issued to
transferees of such Warrant or certificate or instrument (if any)), unless at
such time as the same is no longer required under the applicable requirements of
the Securities Act, shall bear the following legends:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SECURITIES MAY NOT BE SOLD OR
EXHIBIT E
Page 23
TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER
SAID ACT."
Section VII. Miscellaneous.
-------------
A. Expenses. The Company agrees to pay all fees and disbursements of the
--------
Holders (including the reasonable fees and expenses of their counsel) in
connection with the purchase and sale of the Warrants as contemplated by this
Agreement or any amendments hereto and the fees and disbursements of the Holders
(including the reasonable fees and expenses of their counsel) in connection with
the negotiation, execution, delivery and enforcement of this Agreement and the
Warrants or any waiver or consent hereunder or thereunder or any amendment
hereof or thereof. In addition, the Company agrees to pay any and all stamp,
transfer and other similar taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement, any Warrants or
the issuance or transfer of the Warrants.
B. Notices. All notices and other communications provided for herein
-------
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telex, telegraph, telecopy,
cable or other writing and telexed, telecopied, telegraphed, cabled, mailed or
delivered to the intended recipient at the "Address for Notices" specified below
its name on the signature pages hereof; or, as to any party, at such other
address as shall be designated by such party in a notice to the Company given in
accordance with this Section 7.02. All such communications shall be deemed to
have been duly given when transmitted by telex or telecopier, delivered to the
telegraph or cable office or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
C. Exclusion. This Agreement and the Warrants shall be binding upon, and
---------
inure solely to the benefit of the Company and the Holders, and no other Person
shall acquire or have any right under or by virtue of this Agreement or the
Warrants (other than any such Person to whom such Holders have transferred an
interest in the Warrants pursuant to the terms thereof and hereof).
D. Specific Performance. The Company and each Holder acknowledge and agree
--------------------
that in the event of any breach of this Agreement or the Warrants by the Company
or such Holder, the non-defaulting party would be irreparably harmed and could
not be made whole by monetary damages. The Company and each Holder accordingly
agree (i) to waive the defense in any action for specific performance that a
remedy at law would be
EXHIBIT E
Page 24
adequate, and (ii) that the Company and each Holder, in addition to any other
remedy to which they may be entitled at law or in equity, shall be entitled to
compel specific performance of this Agreement or the Warrants in any action
instituted in the United States District Court for the Southern District of New
York, or, in the event such Court would not have jurisdiction for such action,
in any court of the United States or any state thereof having subject matter
jurisdiction for such action.
E. Warrantholder Not a Stockholder. Prior to the exercise of any of its
-------------------------------
Warrants, no Warrantholder shall, except as specifically provided herein, be
entitled to any of the rights of, or be deemed to be, a stockholder in the
Company.
F. No Waivers. No failure or delay by any party in exercising any rights,
----------
power or privilege hereunder or under the Warrants shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided herein shall be cumulative and not exclusive of
any rights or remedies provided by law.
G. Amendments and Waivers. Any provision of this Agreement or the Warrants
----------------------
may be amended or waived if, but only if, such amendment or waiver is in writing
and signed by the Company and the Required Holders.
H. Governing Law. This Agreement and the Warrants shall be governed by and
-------------
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflict of laws thereof.
I. Counterparts. This Agreement may be signed in two or more counterparts,
------------
each of which shall be an original, with the same effect as if the signatories
thereto and hereto were upon the same instrument.
* * *
EXHIBIT E
Page 25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
AUTOTOTE CORPORATION
By____________________________
Title:
Address for Notices:
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Telephone No. : (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
with a copy to:
Autotote Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: General Counsel
BANKERS TRUST COMPANY
By__________________________
Title:
EXHIBIT E
Page 26
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No : (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxxxxx Xxxxxxx
BANK OF IRELAND, GRAND CAYMAN BRANCH
By__________________________
Title:
Address for Notices:
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxxxx Xxxxxxx
BANK POLSKA KASA OPIEKI, S.A.
By__________________________
Title:
Address for Notices:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxxxxxx Xxxx
EXHIBIT E
Page 27
BHF-BANK AKTIENGESELLSCHAFT
By__________________________
Title:
By__________________________
Title:
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxxx Xxxxxxx
CREDITANSTALT CORPORATE FINANCE, INC.
By__________________________
Title:
By__________________________
Title:
Address for Notices:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: X.X. Xxxxxx
EXHIBIT E
Page 28
DELAWARE TRUST COMPANY
By__________________________
Title:
Address for Notices:
x/x Xxxxxxxx Xxxx
00xx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxxxx Xxxxxxx
EUROPEAN AMERICAN BANK
By__________________________
Title:
Address for Notices:
0 XXX Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxxx
FLEET BANK OF MASSACHUSETTS, N.A.
By__________________________
Title:
Address for Notices:
EXHIBIT E
Page 29
mail code: R10PT05A
X.X. Xxx 000
00 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000-0000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxxx Xxxxxxx
GIROCREDIT BANK AG DER SPARKASSEN,
GRAND CAYMAN ISLAND BRANCH
By__________________________
Title:
Address for Notices:
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. : (000) 000-0000
Telecopier No. : (000) 000-0000
Attention: Xxxx Xxxxxx
SCHEDULE A
----------
NUMBER OF SHARES OF CLASS A
COMMON STOCK ISSUABLE TO INITIAL
HOLDERS PURSUANT TO THE WARRANTS
--------------------------------
Bank Number of Shares
---- ----------------
Bankers Trust Company 194,444
Bank of Ireland, Grand Cayman Branch 19,445
Bank Polska Kasa Opieki, S.A. 19,445
BHF-Bank Aktiengesellschaft 38,889
Creditanstalt Corporate Finance, Inc. 58,333
Delaware Trust Company 38,889
European American Bank 58,333
Fleet Bank of Massachusetts, N.A. 58,333
Girocredit Bank AG Der Sparkassen, 38,889
Grand Cayman Island Branch
======
Total: 525,000
-----
EXHIBIT A
---------
--------------------------------------------------------------------------------
THE SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH SECURITIES MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT.
--------------------------------------------------------------------------------
AUTOTOTE CORPORATION
Class A Common Stock Purchase Warrant
Representing Right To Purchase ___________ shares of Class A Common
Stock of Autotote Corporation.
No. ___
FOR VALUE RECEIVED, AUTOTOTE CORPORATION, a Delaware corporation (the
"Company"), hereby certifies that _______________________, or its registered
assigns (the "Holder"), is entitled, subject to the provisions of this Warrant,
to purchase from the Company, at any time or from time to time during the
Exercise Period (as hereinafter defined), up to a total of ________ shares (as
such number of shares may be adjusted pursuant to Section 2 and/or 4 below, the
"Warrant Shares") of Class A Common Stock (as hereinafter defined), at a price
per share equal to the Exercise Price (as hereinafter defined). This Warrant is
issued to the Holder (together with such other warrants as may be issued in
exchange, transfer or replacement of this Warrant, the "Warrants") and entitles
the Holder to purchase the Warrant Shares (as hereinafter defined).
Section 1. Definitions. Terms defined in the Warrant Agreement (as
-----------
hereinafter defined) and not otherwise defined herein have, as used herein, the
respective
EXHIBIT A
Page 2
meanings provided for therein. The following additional terms, as used herein,
have the following respective meanings:
"Class A Common Stock" shall mean and include the Company's authorized
Class A Common Stock, $.01 par value per share, as constituted on the date
hereof.
"Date of Issuance" shall have the meaning ascribed to such term in
Section 8 hereof.
"Distributions" shall have the meaning ascribed to such term in
Section 4.1(c) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exercise Period" shall mean the period of time from January 26, 1996
until 5:00 P.M., local time in New York City, on April 30, 1998.
"Exercise Price" shall be $1.25, as adjusted pursuant to Sections
4.1(d) and 4.3 hereof.
"Fair Market Value" shall mean, as of any date of determination
thereof, with respect to any class of equity security of the Company (including
any equity security issuable upon exercise of any warrant (including the
Warrants) or option to acquire such equity security, (x) if there is a Qualified
Public Market for such class of equity security the value determined pursuant to
clause (i) or (ii) below of this definition or (y) if there is no such Qualified
Public Market, the value determined pursuant to clause (iii) below of this
definition:
(i) if such equity security is listed on a national securities
exchange or admitted to unlisted trading privileges on such an exchange,
the average last reported sale price of a share of such equity security
over a 21-day period prior to the date of determination or if no such sale
is made on any such day, the mean of the closing bid and asked prices for
such day on such exchange; or
(ii) if such equity security is not so listed or admitted to
unlisted trading privileges, the average mean of the last bid and asked
prices reported for
EXHIBIT A
Page 3
a share of such equity security over a 21-day period prior to the date of
determination (A) by the National Association of Securities Dealers
Automatic Quotation System or (B) if reports are unavailable under clause
(A) above by the National Quotation Bureau Incorporated; or
(iii) if such equity security is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported,
the Fair Market Value for a share of such equity security shall be the Fair
Market Value as determined by an Independent Financial Expert selected by
the Required Holders from a group consisting of three Independent Financial
Experts chosen by the Company, it being understood and agreed that in
determining such Fair Market Value, the Independent Financial Expert shall
calculate such Fair Market Value as if all outstanding shares of capital
stock of the Company (assuming the exercise of all warrants and options to
acquire such shares of capital stock of the Company) were sold in their
entirety on such date of determination to an unaffiliated third party with
neither the buyer nor seller under any compulsion to act, based on
financial information of the Company, as of the date of determination, but
taking into account all relevant factors of the capital stock and without
giving effect to any discount for the lack of liquidity of such or to the
fact that the Company may have no equity securities registered under the
Exchange Act or that the holder has a minority interest in the Company. The
costs and expenses of any such Independent Financial Expert making such
valuation shall be paid by the Company.
"Independent Financial Expert" shall mean a nationally recognized
appraiser or investment banking firm that does not (and whose Affiliates do not)
have a direct or indirect financial interest in the Company or any of the
Holders (other than in its trading accounts or as a participating underwriter in
an offering of securities), that has not been, and at the time it is called upon
to determine Fair Market Value, is not (and none of whose Affiliates is) a
promoter, director or officer of the Company or any of its Affiliates or any of
the Holders or an underwriter with respect to any of the securities of the
Company, and that has not provided any advice or opinions to the Company during
the two years prior to the date it is called upon to serve as Independent
Financial Expert except as an Independent Financial Expert pursuant hereto;
provided, that if any Holder is a commercial bank, an institutional
--------
investor or an Affiliate thereof, the conduct by such investment banking firm of
investment banking transactions in the ordinary course of its business
(including, without limitation, underwritings of securities, private placements,
broker-dealer transactions and mergers and acquisitions) in which such
EXHIBIT A
Page 4
Holder is a participant shall not by itself result in the disqualification of
such firm from being an Independent Financial Expert pursuant hereto.
"Offering Price" shall have the meaning ascribed to such term in
Section 4.1(b) hereof.
"Qualified Public Market" shall mean with respect to Class A Common
Stock or other equity securities in the Company, an active trading market on a
national securities exchange or over-the-counter market which consists of such
publicly held Class A Common Stock or other equity securities in the Company,
with a minimum market value of $10,000,000 for such Class A Common Stock or
other equity securities. A "Qualified Public Market" shall be deemed to exist if
the financial parameters set forth in the immediately preceding sentence have
been met for the Class A Common Stock or such other equity securities for a
period of 21 consecutive days.
"Warrant Agreement" shall mean the Warrant Agreement, dated as of
January 26, 1996, among the Company and the Initial Holders, as such agreement
shall be modified, amended and supplemented and in effect from time to time.
"Wellington Subordinated Debt" shall mean the 5.11% Convertible
Subordinated Debentures of the Company due 2001.
Section 2. Exercise of Warrant; Cancellations of Warrant. This
------------------------------------- -------
Warrant may be exercised in whole or in part, at any time or from time to time,
during the Exercise Period, by presentation and surrender hereof to the Company
at its principal office at the address set forth on the signature page hereof
(or at such other address as the Company may after the date hereof notify the
Holder in writing), or at the office of its transfer agent or warrant agent, if
any, with the Purchase Form annexed hereto duly executed and accompanied by
either (at the option of the Holder) proper payment in cash or certified or
official bank check equal to the Exercise Price for the Warrant Shares for which
this Warrant is being exercised; provided, however, that the Holder shall not be
-------- -------
entitled to exercise this Warrant to the extent that, as a result of such
exercise, the Holder and its Affiliates, directly or indirectly, would, in the
Holder's sole judgment, own, control or have power to vote a greater quantity of
securities of any kind issued by the Company than the Holder and its Affiliates
shall be permitted to own, control or have power to vote under any law or under
any regulation, rule or other requirement of any government authority at the
time applicable to the Holder and its Affiliates (including, without limitation,
any applicable provision of Regulation Y). Notwithstanding the
EXHIBIT A
Page 5
foregoing, if less than all of this Warrant is to be exercised, the Holder may,
at its option, in lieu of delivery of the check or cash described in the
immediately preceding sentence, elect to exercise this Warrant and to pay the
Exercise Price by delivering to the Company a duly completed and executed
Purchase Form providing for the payment of the Exercise Price by cancellation of
a number of Warrant Shares having a Fair Market Value equal to the Exercise
Price of the Warrant Shares issuable upon such exercise.
Upon receipt by the Company of this Warrant and such Purchase Form,
together with the Exercise Price for the Warrant Shares for which this Warrant
is being exercised, the Holder shall be deemed to be the holder of record of the
number of Warrant Shares specified in such Purchase Form, notwithstanding that
the transfer books of the Company shall then be closed or that certificates (if
any) representing the Warrant Shares shall not then be actually delivered to the
Holder. The Company shall pay any and all documentary stamp or similar issue
taxes payable in respect of the issue of the Warrant Shares. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant, execute and deliver a new Warrant evidencing the rights of the Holder
thereof to purchase the balance of the Warrant Shares issuable hereunder.
Section 3. Exchange, Transfer, Assignment or Loss of Warrant. This
-------------------------------------------------
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company for other Warrants of different
denominations, entitling the Holder to purchase in the aggregate the same number
of Warrant Shares. The Holder of this Warrant shall be entitled, without
obtaining the consent of the Company, to transfer or assign its interest in (and
related rights and obligations under) this Warrant in whole or in part to any
Person or Persons, subject to the provisions of Section 6 of the Warrant
Agreement. Upon surrender of this Warrant to the Company, with the Assignment
Form annexed hereto duly executed and funds sufficient to pay any transfer tax,
the Company shall, without charge, execute and deliver a new Warrant or Warrants
in the name of the assignee or assignees named in such instrument of assignment
and, if the Holder's entire interest is not being assigned, in the name of the
Holder, and this Warrant shall promptly be cancelled. This Warrant may be
divided or combined with other Warrants that carry the same rights upon
presentation hereof at the office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued
and signed by the Holder hereof. Upon receipt by the Company of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this
Warrant, and (in the case of loss, theft or destruction) of reasonably
EXHIBIT A
Page 6
satisfactory indemnification, and upon surrender and cancellation of this
Warrant, if mutilated, the Company shall execute and deliver a new Warrant of
like tenor and date.
Section 4.1. Adjustment of Number of Warrant Shares. The number of
--------------------------------------
Warrant Shares purchasable pursuant hereto shall be subject to adjustment from
time to time on and after the Date of Issuance as hereinafter provided in this
Section 4.1.
(a) In case the Company shall at any time after the Date of Issuance
(i) declare or pay a dividend in shares of Common Stock or make a distribution
in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock or (iv)
issue any shares of Common Stock or other assets in a reclassification or
reorganization of such shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing entity), the securities purchasable pursuant hereto
shall be adjusted to the number of Warrant Shares and amount of any other
securities, cash or other property of the Company which the Holder would have
owned or have been entitled to receive after the happening of any of the events
described above, had this Warrant been exercised immediately prior to the
happening of such event or any record date with respect thereto. An adjustment
made pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event, retroactive to the record date, if any, for such
event. Any Warrant Shares purchasable as a result of such adjustment shall not
be issued prior to the effective date of such event. If, as a result of an
adjustment made pursuant to this Section 4.1(a), the Holder of any Warrant
thereafter surrendered for exercise shall become entitled to receive shares of
two or more classes of securities of the Company, the Board of Directors of the
Company (with the consent of the Required Holders) shall determine the
allocation of the adjusted Exercise Price between or among shares of such
classes of securities.
(b) In case the Company shall issue shares of Common Stock or issue
rights, options or warrants to subscribe for or purchase, or other securities
exchangeable for or convertible into, shares of Common Stock (any such rights,
options, warrants or other securities being herein called "Rights") (excluding
(i) shares issued in a transaction covered by Section 4.1(a) hereof, (ii) shares
issued upon conversion, exercise, or exchange of Rights issued after the date
hereof (provided that appropriate adjustments were made hereunder upon the
issuance of such Rights), (iii) the Warrants and any Warrant Shares issued on
exercise thereof, (iv) shares issued upon conversion, exercise or exchange of
Rights issued prior to the date hereof, (v) shares issued to the holders of
EXHIBIT A
Page 7
the Wellington Subordinated Debt in respect of the interest payment that is due
on February 15, 1996 for such Debt and (vi) shares issued pursuant to an
employee benefit plan of the Company that has been approved by the Board of
Directors of the Company) at an issuance, subscription, offering, exercise or
conversion price (the "Offering Price") per share which is lower than the Fair
Market Value on the date such shares of Common Stock or Rights, as the case may
be, are issued, whether or not such Rights are immediately exercisable or
convertible, the number of Warrant Shares shall be adjusted and shall be
determined by multiplying the number of Warrant Shares immediately prior to any
adjustment in connection with such issuance by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding (exclusive of
any treasury shares) immediately prior to the date of issuance of such shares of
Common Stock or Rights (assuming that all shares of Common Stock into which all
outstanding rights, options, warrants and convertible securities excluding the
Rights are exercisable or convertible are outstanding) plus the number of
additional shares of Common Stock issued and the number of shares of Common
Stock that would be issued upon exercise of the Rights, and the denominator of
which shall be the number of shares of Common Stock outstanding (exclusive of
any treasury shares) immediately prior to the date of issuance of such Common
Stock or Rights (assuming that all shares of Common Stock into which all
outstanding rights, options, warrants and convertible securities excluding the
Rights are exercisable or convertible is outstanding) plus the number of shares
which the aggregate Offering Price of the total number of shares of Common Stock
so offered would purchase at the Fair Market Value on the date of such issuance;
provided that to the extent any such Rights so issued expire or are cancelled or
--------
redeemed without having been exercised or converted, the number of Warrant
Shares issuable hereunder shall again be adjusted to reflect such expiration,
cancellation or redemption of such Rights. Such adjustment shall be made
whenever such shares of Common Stock or Rights are issued. For purposes of this
paragraph (b), the "Offering Price" per share of Common Stock shall in the case
of Rights be determined by dividing (x) the total amount received or receivable
by the Company in consideration of the issuance of such Rights plus the total
consideration payable to the Company upon exercise thereof by (y) the total
number of shares of Common Stock covered by such Rights.
(c) In case the Company shall distribute generally to holders of any
class of its shares of Common Stock, any rights, options, warrants to subscribe
for or purchase, or other securities exchangeable for or convertible into,
shares of Common Stock, evidences of its indebtedness or assets (including
securities and cash dividends), but excluding dividends or distributions
referred to in paragraph (a) above or rights, options, warrants or other
securities referred to in paragraph (b) above (collectively,
EXHIBIT A
Page 8
"Distributions"), then the number of Warrant Shares issuable hereunder after any
such Distribution shall be adjusted and shall be determined by multiplying the
number of Warrant Shares by a fraction, the numerator of which shall be the Fair
Market Value on the record date for such Distribution, and the denominator of
which shall be such Fair Market Value, less the then fair market value (as
reasonably determined in good faith by the Board of Directors of the Company) of
the portion of the assets or evidences of indebtedness so distributed applicable
to one share of Common Stock. Such adjustments shall be made successively
whenever any such Distribution is made and shall become effective on the date of
Distribution retroactive to the record date for the determination of
stockholders entitled to receive such Distribution. In the event that the
Required Holders disagree with the Company's determination of the fair market
value of any assets or evidences of indebtedness pursuant to this subsection
4.1(c), then such fair market value shall be determined by an Independent
Financial Expert selected by the Required Holders and the Company in accordance
with the procedure set forth in the first sentence of clause (iii) of the
definition of "Fair Market Value". The Company shall bear the costs of the
Independent Financial Expert.
(d) Whenever the number of Warrant Shares are adjusted as herein
provided, the Exercise Price payable upon exercise of this Warrant shall be
adjusted by multiplying such Exercise Price immediately prior to such adjustment
by a fraction, the numerator of which shall be the number of Warrant Shares
immediately prior to such adjustment, and the denominator of which shall be the
number of Warrant Shares immediately thereafter.
(e) No adjustment in the number of Warrant Shares shall be required
hereunder unless such adjustment would result in an increase or decrease of at
least one percent (1%) of the Exercise Price; provided, however, that any
-------- -------
adjustments which by reason of this subsection (e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest one-hundredth of a cent or to the
nearest one-thousandth of a share, as the case may be.
(f) For the purpose of this subsection 4.1 and subsection 4.2 hereof,
the term "shares of Common Stock" shall mean (i) the classes of stock designated
as the Class A Common Stock or Class B Nonvoting Common Stock of the Company as
of the date hereof, (ii) any other class of stock of the Company resulting from
successive changes or reclassification of such shares consisting solely of
changes in par value, or from par value to no par value, or from no par value to
par value, or (iii) any other
EXHIBIT A
Page 9
capital stock of the Company which is not by its terms restricted in amount or
timing to the entitlement to dividends or in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.
In the event that at any time, as a result of an adjustment made pursuant to
this subsection 4.1, the Holder shall become entitled to receive any securities
of the Company other than shares of Common Stock, thereafter the number of such
other securities so receivable upon exercise of this Warrant and the Exercise
Price of such shares shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in this Section 4.
Section 4.2. Reorganization, Merger, etc. If any capital
----------------------------
reorganization, reclassification or similar transaction involving the capital
stock of the Company (other than as specified in Section 4.1(a) hereof), any
consolidation, merger or business combination of the Company with another
corporation, or the sale or conveyance of all or any substantial part of its
assets to another corporation, shall be effected in such a way that holders of
the shares of Common Stock shall be entitled to receive stock, securities or
assets (including, without limitation, cash) with respect to or in exchange for
shares of the Common Stock, then, prior to and as a condition of such
reorganization, reclassification, similar transaction, consolidation, merger,
business combination, sale or conveyance, lawful and adequate provision shall be
made whereby the Holder shall thereafter have the right to purchase and receive
upon the basis and upon the terms and conditions specified in this Warrant and
in lieu of the Warrant Shares of the Company immediately theretofore purchasable
and receivable upon the exercise of this Warrant, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding Warrant Shares equal to the number of Warrant Shares
immediately theretofore purchasable and receivable upon the exercise of the
rights represented hereby had such reorganization, reclassification, similar
transaction, consolidation, merger, business combination, sale or conveyance not
taken place. The Company shall not effect any such consolidation, merger,
business combination, sale or convey conveyance unless prior to or
simultaneously with the consummation thereof the survivor or successor
corporation (if other than the Company) resulting from such consolidation or
merger or the corporation purchasing such assets shall assume by written
instrument executed and sent to the Holder, the obligation to deliver to the
Holder such shares of stock, securities or assets as, in accordance with the
foregoing provisions, the Holder may be entitled to receive.
EXHIBIT A
Page 10
4.3. Voluntary Adjustment by the Company. The Company may at its
-----------------------------------
option, at any time during the term of this Warrant, reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company, including such reductions in the Exercise
Price as the Company considers to be advisable in order that any event treated
for Federal income tax purposes as a dividend of stock or stock rights shall not
be taxable to the recipients; provided, however, that no such adjustment in
-------- -------
Exercise Price shall affect the number of Warrant Shares.
4.4. Other Events. If any event occurs as to which the foregoing
------------
provisions of Section 4.1 or 4.2 are not strictly applicable or, if strictly
applicable, would not, in the good faith judgment of the Board of Directors of
the Company, fairly and adequately protect the purchase rights represented by
the Warrants in accordance with the essential intent and principles of such
provisions, then such Board of Directors shall make such adjustments in the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of such
Board of Directors, to protect such purchase rights as aforesaid.
4.5. Statement on Warrant Certificates. Irrespective of any
---------------------------------
adjustments in the Exercise Price or the number or kind of Warrant Shares, this
Warrant may continue to express the same price and number and kind of shares as
are stated on the front page hereof.
4.6. Exceptions to Adjustment. Anything herein to the contrary
------------------------
notwithstanding, the Company shall not be required to make any adjustment of the
number of Warrant Shares issuable hereunder in the case of the issuance of the
Warrants or the issuance of shares of the Class A Common Stock upon exercise of
the Warrants.
4.7. Treasury Shares. The number of shares of the Class A Common
---------------
Stock or any other class of capital stock of the Company outstanding at any time
shall not include shares owned or held by or for the account of the Company or
any of its subsidiaries, and the disposition of any such shares shall be
considered an issue or sale of the Class A Common Stock or such other class of
capital stock for the purposes of this Section 4.
4.8. Company to Prevent Dilution. In case at any time or from time
---------------------------
to time conditions arise by reason of action taken by the Company or any of its
subsidiaries which are not adequately covered by the provisions of this Section
4, or which might
EXHIBIT A
Page 11
adversely affect the exercise rights of the registered Warrantholders in any
material respect, the Board of Directors of the Company shall appoint a firm of
independent certified public accountants of recognized national standing, which
may be the firm regularly retained by the Company, which shall give their
opinion upon the adjustment, if any, necessary with respect to the number of
Warrant Shares into which this Warrant is exercisable, on a basis consistent
with the standards established in the other provisions of this Section 4, so as
to preserve, without dilution, the exercise rights of the registered
Warrantholders. Upon receipt of such opinion, the Board of Directors of the
Company shall forthwith make the adjustments described therein.
4.9. Adjustment Notices to Holder. Upon any increase or decrease in
----------------------------
the number of Warrant Shares purchasable upon the exercise of this Warrant the
Company shall, within 15 days thereafter, deliver written notice thereof to the
Holder, which notice shall state the increased or decreased number of Warrant
Shares purchasable upon the exercise of this Warrant and the changed Exercise
Price, if any, setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based. In addition, within 95 days
after the end of each fiscal year of the Company, the Company shall deliver to
the Holders a certificate of the Company's independent public accountants as to
the correctness of any such adjustments and calculations that have been made
during such fiscal year and to the effect that such adjustments and calculations
have been made in accordance with the terms hereof. If the Company shall fail to
so timely deliver any notice required pursuant to this Section 4.9, the
Exercise Period shall be extended until the Holder shall have received the
proper notification under this Section 4.9.
5.1. Special Covenants of the Company. The Company covenants and
--------------------------------
agrees that until all Warrants have been exercised in full:
(a) The Company will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, directly or indirectly avoid or seek to avoid the
observance or performance of any of the terms of this Warrant or the
Warrant Agreement, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the Holder
against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (i) will not increase the par value of any
shares of stock receivable upon the exercise of the Warrants above the
Exercise Price
EXHIBIT A
Page 12
payable therefor upon such exercise, and (ii) will take all such action as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable shares of stock upon the
exercise of all Warrants from time to time outstanding (including as a
result of a reduction in the purchase price pursuant to the terms hereof).
(b) If any Warrant Shares required to be reserved for the purposes of
exercise of this Warrant require registration with or approval of any
governmental authority under any federal law (other than the Securities
Act) or under any state law before such Warrant Shares may be issued upon
exercise of this Warrant, the Company will, at its expense, as
expeditiously as possible use its best efforts to cause such Warrant Shares
to be duly registered or approved, as the case may be.
(c) At any time the Class A Common Stock is listed on any national
securities exchange (as defined in the Exchange Act), the Company will, at
its expense, obtain and maintain the approval for listing on each such
exchange upon official notice of issuance of all Warrant Shares receivable
upon the exercise of the Warrants at the time outstanding and maintain the
listing of such Warrant Shares after their issuance; and the Company will
so list on such national securities exchange, will register under the
Exchange Act (and any similar state statute then in effect), and will
maintain such listing of, any other securities that at any time are
issuable upon exercise of the Warrants, if and at the time that any
securities of the same class shall be listed on such national securities
exchange by the Company.
(d) The Company will give notice to the Holder within five days after
the Company shall have filed with the Commission or with any national
securities exchange an application to register any securities of the
Company pursuant to the Exchange Act.
(e) The Company covenants and agrees to give the Holder prior written
notice of the expiration of the Exercise Period of the Warrants. Such
notice shall be delivered not less than thirty (30) days but not more than
sixty (60) days prior to such expiration; provided, that if the Company
--------
fails to give such notice, the expiration of such Exercise Period shall not
occur, until thirty (30) days after such notice is delivered.
EXHIBIT A
Page 13
5.2. Pro Rata Purchase. If at any time the Company or any of its
-----------------
Affiliates shall offer to purchase any shares of Class A Common Stock, the
Company shall make each offer pro rata to all holders of outstanding Warrant
--- ----
Shares and Warrants, and any purchase shall be allocated pro rata among the
--- ----
holders of Warrant Shares and Warrants accepting the offer to purchase.
Section 6. Notification by the Company. In case at any time:
---------------------------
(i) the Company shall declare any dividend or make any distribution
upon its Class A Common Stock or any other class of its capital stock; or
(ii) the Company shall offer for subscription pro rata to the holders
--- ----
of its Class A Common Stock or any other class of its capital stock any
additional shares of stock of any class or any other securities convertible
into or exchangeable for shares of stock or any rights or options to
subscribe thereto; or
(iii) the Board of Directors of the Company shall authorize any
capital reorganization, reclassification or similar transaction involving
the capital stock of the Company, or a sale or conveyance of all or a
substantial part of the assets of the Company, or a consolidation, merger
or business combination of the Company with another Person; or
(iv) actions or proceedings shall be authorized or commenced for a
voluntary or involuntary dissolution, liquidation or winding-up of the
Company;
then, in any one or more of such cases, the Company shall give written notice to
the Holder, at the earliest time legally and reasonably practicable (and not
less than 20 days before any record date or other date set for definitive
action) of the date on which (A) the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights or
options or (B) such reorganization, reclassification, sale, conveyance,
consolidation, merger, dissolution, liquidation or winding-up shall take place
or be voted on by stockholders of the Company, as the case may be. Such notice
shall also specify the date as of which the holders of the Class A Common Stock
of record shall participate in said dividend, distribution, subscription rights
or options or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification, sale,
conveyance, consolidation, merger, dissolution, liquidation or winding-up, as
the case may be. If the action in
EXHIBIT A
Page 14
question or the record date is subject to the effectiveness of a registration
statement under the Securities Act or to a favorable vote of stockholders, the
notice required by this Section 6 shall so state.
Section 7. No Voting Rights; Limitations of Liability. Prior to
------------------------------------------
exercise, this Warrant will not entitle the Holder to any voting rights or other
rights as a stockholder of the Company. No provision hereof, in the absence of
affirmative action by the Holder to purchase Class A Common Stock, and no
enumeration herein of the rights or privileges of the Holder shall give rise to
any liability of the Holder for the purchase price of Class A Common Stock
acquirable by exercise hereof or as a stockholder of the Company.
Section 8. Date of Issuance. The date the Company initially issues
----------------
this Warrant will be deemed to be the "Date of Issuance" hereof and of each new
Warrant issued in exchange, transfer or replacement hereof, regardless of the
number of times new certificates representing the unexpired and unexercised
rights formerly represented by this Warrant shall be issued.
Section 9. Amendment and Waiver. (a) No failure or delay of the
--------------------
Holder in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise have. The
provisions of this Warrant may be amended, modified or waived with (and only
with) the written consent of the Company and the Required Holders.
(b) Any such amendment, modification or waiver effected pursuant to
this Section 9 shall be binding upon the Holder and the holders of all others
Warrants and Warrant Shares, upon each future holder thereof, upon the Company
and its stockholders. In the event of any such amendment, modification or
waiver, the Company shall give prompt written notice thereof to all
Warrantholders and, if appropriate, notation thereof shall be made on all
Warrants thereafter surrendered for registration of transfer or exchange.
(c) No notice or demand on the Company in any case shall entitle the
Company to any other or further notice or demand in similar or other
circumstances.
EXHIBIT A
Page 15
Section 10. No Fractional Warrant Shares. The Company shall not be
----------------------------
required to issue stock certificates representing fractions of Warrant Shares,
but may at its option in respect of any final fraction of a Warrant Share make a
payment in cash based on the then current market price of the Class A Common
Stock (as determined in accordance with Section 4.1(c) hereof) after giving
effect to the full exercise or conversion of the Warrants.
Section 11. Reservation of Warrant Shares. The Company will
-----------------------------
authorize, reserve and keep available at all times, free from preemptive rights,
a sufficient number of Warrant Shares to satisfy the requirements of this
Warrant and any other outstanding Warrants.
Section 12. Notices. All notices, requests, consents and other
-------
communications hereunder shall be in writing (including, telegraphic, telex,
facsimile or cable communication) and delivered, mailed, telegraphed, telexed,
telecopied or cabled:
(i) if to the Holder, to its address as set forth in records of the
Company or the warrant agent for the Warrants, if a warrant agent is
appointed; and
(ii) if to the Company, to Autotote Corporation, at 000 Xxxxxxxx
Xxxx, Xxxxxx, Xxxxxxxx 00000-0000, Telecopier No.: 000-000-0000, Attention:
Xxxxxx Xxxxxx, with a copy to Autotote Corporation, at 000 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Telecopier No.: 000-000-0000, Attention:
General Counsel or at such other addresses as may have been furnished to
the Holder in writing by the Company.
All such notices and communications shall, when mailed, telegraphed,
telexed, facsimiled, or cabled or sent by overnight courier, be effective 3
Business Days after deposited in the mails, certified, return receipt requested,
when delivered to the telegraph company or cable company or one day following
delivery to an overnight courier, as the case may be, or sent by telex or
facsimile device.
Section 13. Headings. The headings of the Sections and
--------
subsections of this Warrant are inserted for convenience only and shall not be
deemed to constitute a part of this Warrant.
EXHIBIT A
Page 16
Section 14. Governing Law; Consent to Jurisdiction. THIS WARRANT
--------------------------------------
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK. If any action or proceeding shall be brought by the Holder or the
Company in order to enforce any right or obligation in respect of this Warrant,
the Company and the Holder hereby consent and will submit to the jurisdiction of
any state or federal court of competent jurisdiction sitting within the area
comprising the Southern District of New York on the date of this Warrant, and
agree that venue will be proper in any such court.
Section 15. Binding Effect. The terms and provisions of this Warrant
--------------
shall inure to the benefit of the original Holder and its successors and assigns
and shall be binding upon the Company and its successors and assigns, including,
without limitation, any Person succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets.
Section 16. Registration Rights. Each Warrantholder shall be
-------------------
entitled to the benefits of registration rights pursuant to the Warrant
Agreement subject to the restrictions on sale or transfer of this Warrant or the
Warrant Shares subject hereto, as the case may be, pursuant to the Warrant
Agreement.
EXHIBIT A
Page 17
IN WITNESS WHEREOF, the signature of a duly authorized officer of the
Company has been affixed hereto as of January 26, 1996.
AUTOTOTE CORPORATION
By_____________________________
Title:
Attest: _________________
PURCHASE FORM
-------------
Dated ________________
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing ___ shares of the Class A Common Stock
issuable hereunder and hereby makes payment [of $________ in payment of the
exercise price thereof] [by cancellation of a number of Warrant Shares subject
to the Warrant having a Fair Market Value equal to the Exercise Price for the
Warrant Shares being purchased pursuant to this Purchase Form].
_________________
INSTRUCTIONS FOR REGISTRATION OF
COMMON STOCK
--------------------------------
Name ________________________________________________________
(please typewrite or print in block letters)
Address ____________________________________________________
Signature _____________________________________________
ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, ____________________________ hereby sells, assigns
and transfers unto
Name ________________________________________________________
(please typewrite or print in block letters)
Address _____________________________________________________
its right to purchase ___ shares of the Class A Common Stock represented by this
Warrant and does hereby irrevocably constitute and appoint ______ Attorney, to
transfer the same on the books of the Company, with full power of substitution
in the premises.
Date: ________________________
Signature ________________________
EXHIBIT F-1
-----------
[OPINION OF KRONISH, LIEB, WIENER & XXXXXXX LLP]
[Restatement Effective Date]
To the Agent
and each of the Banks party to the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as special counsel to Autotote Corporation, a Delaware
corporation ("Holdings"), Autotote Systems, Inc., a Delaware corporation (the
"Borrower") and each other Subsidiary of Holdings party to any Credit Document
(collectively, the "Subsidiary Guarantors," and together with Holdings and the
Borrower, the "Credit Parties," and each a "Credit Party"), in connection with
(i) the execution and delivery of the Credit Agreement, dated as of October 31,
1991, and amended and restated as of October 30, 1992, and amended and restated
as of June 4, 1993, and amended and restated as of April 28, 1994, and further
amended and restated as of January __, 1996 (the "Credit Agreement"), among
Holdings, the Borrower, the lenders from time to time party thereto (the
"Banks"), and Bankers Trust Company, as Agent (the "Agent"), and the
transactions contemplated thereby and (ii) the execution and delivery of the
Warrant Agreement, dated as of January __, 1996 (the "Warrant Agreement"), among
Holdings and the Banks and the transactions contemplated thereby, including the
issuance by Holdings of Warrants (the "Warrants", and together with the Warrant
Agreement, the "Warrant Documents") to purchase up to ____ shares of Class A
Common Stock, par value $.01 per share, of Holdings. Unless otherwise indicated
herein, capitalized terms used herein but not otherwise defined herein shall
have the respective meanings set forth in the Credit Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents as we
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including, without limitation, the following (collectively, the
"Documents"): (a) the Credit Documents executed on or before the date hereof,
(b) the Warrant Documents and (c) such other public and corporate documents and
records as we deem necessary or appropriate in connection with this opinion.
In our examination, we have assumed the genuineness of all signatures
(other than as to any Credit Party), the authenticity of all documents submitted
to us as originals, the conformity to original documents of all documents
submitted to us as certified or photostatic
EXHIBIT F-1
Page 2
copies and the authenticity of the originals of such copies. As to questions of
fact not independently verified by us we have relied, to the extent we deemed
appropriate, upon certificates of officers of each Credit Party, public
officials and other appropriate persons.
Based upon the foregoing, we are of the opinion that:
1. Each Credit Party has the corporate power and authority to
execute, deliver and perform the terms and provisions of each of the Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of such Documents. Each
Credit Party has duly executed and delivered each of the Documents to which it
is a party, and each of such Documents con constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally affecting
creditors' rights and by equitable principles (regardless of whether enforcement
is sought in equity or at law).
2. Neither the execution, delivery or performance by any Credit Party
of the Documents to which it is a party (including, without limitation, the
granting of Liens pursuant to the Security Documents), nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any law,
statute, rule or regulation (including, without limitation, Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System), (ii) will
conflict with or result in any breach of, any of the terms, coven ants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of such Credit Party or any of its Subsidiaries
pursuant to the terms of the Wellington Subordinated Debt or (iii) will violate
any provision of the Certificate of Incorporation or By-Laws of such Credit
Party or any of its Subsidiaries.
3. After giving effect to the delivery to, or the continued
possession by, the Collateral Agent of the Pledged Stock and Pledged Notes (as
such terms are defined in the Pledge Agreement) and assuming the continued
possession by the Collateral Agent of such Pledged Stock and Pledged Notes under
the Pledge Agreement, all actions will have been taken to create and perfect a
valid and enforceable first security interest in such Pledged Securities in
favor of the Collateral Agent for the benefit of the Secured Creditors under the
Pledge Agreement. No filings or recordings are required in order to perfect (or
maintain the perfection and priority of) the security interest created in the
Pledged Securities under the Pledge Agreement.
EXHIBIT F-1
Page 3
4. The Liens created by the Security Agreement prior to the
Restatement Effective Date with respect to the Security Agreement Collateral
covered thereby continue in effect to secure the Obligations secured by the
Security Agreement, and no amendments to the UCC-1 financing statements filed in
connection with the Original Credit Agreement are required to continue the
perfection and priority of the Liens created under the Security Agreement to the
extent that such Security Agreement Collateral consists of the type of property
in which a security interest may be perfected by filing a financing statement
under the UCC of the relevant jurisdictions.
5. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with (except as have been obtained or
made on or prior to the Restatement Effective Date), or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document or (ii) the legality, validity, binding
effect or enforceability of any such Document.
6. No Credit Party nor any of its Subsidiaries is an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
7. No Credit Party nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
8. The Loans and other Obligations under the Credit Agreement and the
other Credit Documents are within the definition of "Senior Indebtedness"
included in the Wellington Subordinated Debt.
We are members of the Bar of the State of New York and, except as
described in the following sentence, we do not hold ourselves out as being
conversant with, and express no opinion as to, the laws of any jurisdiction
other than those of the United States of America, the State of New York and the
general corporate law of the State of Delaware. Our opinion set forth in
paragraph 4 above (to the extent governed by the law other than that of the
United States of America and the State of New York) is based upon a review of
the generally available compilations of the law relating to such matters.
EXHIBIT F-1
Page 4
This opinion is being furnished only to the addresses and is solely
for their benefit and the benefit of their participants and assigns in
connection with the above transaction. This opinion may not be relied upon for
any other purpose, or relied upon by any other person, firm or corporation for
any purpose, without our prior written consent.
Very truly yours,
EXHIBIT F-2
-----------
[OPINION OF XXXXXX X. XXXXXXX, ESQ.]
[Restatement Effective Date]
To the Agent
and each of the Banks party to the
Credit Agreement referred to below
Ladies and Gentlemen:
I am the Vice President and General Counsel of Autotote Corporation, a
Delaware corporation ("Holdings"), and in such capacity, I have acted as counsel
to Holdings, Autotote Systems, Inc., a Delaware corporation (the "Borrower") and
each other Subsidiary of Holdings party to any Credit Document (collectively,
the "Subsidiary Guarantors," and together with Holdings and the Borrower, the
"Credit Parties," and each a "Credit Party"), in connection with (i) the
execution and delivery of the Credit Agreement, dated as of October 31, 1991,
and amended and restated as of October 30, 1992, and amended and restated as of
April 28, 1994, and further amended and restated as of January __, 1996 (the
"Credit Agreement"), among Holdings, the Borrower, the lenders from time to time
party thereto (the "Banks"), and Bankers Trust Company, as Agent (the "Agent"),
and the transactions contemplated thereby and (ii) the execution and delivery of
the Warrant Agreement, dated as of January __, 1996 (the "Warrant Agreement"),
among Holdings and the Banks and the transactions contemplated thereby,
including the issuance by Holdings of Warrants (the "Warrants," and together
with the Warrant Agreement, the "Warrant Documents") to purchase up to ____
shares of Class A Common Stock, par value $.01 per share, of Holdings (the
"Common Stock"). Unless otherwise indicated herein, capitalized terms used
herein but not otherwise defined herein shall have the respective meanings set
forth in the Credit Agreement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to my satisfaction, of such documents as I
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including, without limitation, the following (collectively, the
"Documents"): (a) the Credit Documents executed on or before the date hereof,
(b) the Warrant Documents and (c) such other public and corporate documents and
records as I have deemed necessary or appropriate in connection with this
opinion.
EXHIBIT F-2
Page 2
In my examination, I have assumed the genuineness of all signatures
(other than as to any Credit Party), the authenticity of all documents submitted
to me as originals, the conformity to original documents of all documents
submitted to me as certified or photostatic copies and the authenticity of the
originals of such copies. As to questions of fact not independently verified by
me, I have relied, to the extent I deemed appropriate, upon certificates of
officers of each Credit Party, public officials and other appropriate persons.
Based upon the foregoing, I am of the opinion that:
1. Each Credit Party and each of its Subsidiaries (i) is a duly
organized and validly existing corporation in good standing under the laws of
the jurisdiction of its incorporation, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage in and (iii) is duly qualified
and is authorized to do business and is in good standing in each jurisdiction
where the conduct of its business requires such qualification, except for
failures to be so qualified which, individually or in the aggregate, could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings, the Borrower or of Holdings and its Subsidiaries taken as
a whole.
2. Neither the execution, delivery or performance by any Credit Party
of the Documents to which it is a party (including, without limitation, the
granting of Liens pursuant to the Security Documents), nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any
order, writ, injunction or decree of any court or governmental instrumentality
applicable to such Credit Party, or (ii) will conflict with or result in any
breach of, any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of such Credit Party or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, to which such Credit Party or any of its Subsidiaries is a party or
by which it or any of its property or assets is bound or to which it may be
subject.
3. There are no actions, suits or proceedings pending or, to the best
of my knowledge, threatened (i) with respect to any Document, (ii) with respect
to any material Indebtedness of any Credit Party or any of its Subsidiaries or
(iii) that could reasonably be expected to materially and adversely affect the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings, the Borrower or of holdings and its
Subsidiaries taken as a whole.
EXHIBIT F-2
Page 3
4. The corporations listed on Schedule VIII of the Credit Agreement
are the only Subsidiaries of Holdings. Schedule VIII of the Credit Agreement
correctly sets forth the percentage ownership (direct and indirect) of Holdings
in each class of capital stock of each of its Subsidiaries and also identifies
the direct owners thereof. All such capital stock of such Subsidiaries have been
duly and validly issued, are fully paid and non-assessable and have been issued
free of preemptive rights. All of the shares of Common Stock issuable upon the
exercise of the Warrants (i) have been duly authorized and duly reserved for
issuance upon such exercise and (ii) when issued and delivered upon the exercise
of the Warrants in accordance with their terms, will be validly issued and
outstanding, will be fully paid and non-assessable, and the holders thereof will
have no personal liability as such under the General Corporation Law of the
State of Delaware. Except as set forth on Schedule VII to the Credit Agreement,
as of the Restatement Effective Date, Holdings does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or any
call, commitment or claims of any character relating to, its capital stock.
5. Each Credit Party is the record owner of all of the Pledged Stock
and Pledged Notes (as each such term is defined in the Pledge Agreement) listed
on Annex B and Annex C, respectively, to the Pledge Agreement.
I am a member of the Bar of the State of New York and I do not hold
myself out as being conversant with, and express no opinion as to, the laws of
any jurisdiction other than those of the United States of America and the State
of New York and the general corporate law of the State of Delaware.
This opinion is being furnished only to the addresses and is solely
for their benefit and the benefit of their participants and assigns in
connection with the above transaction. This opinion may not be relied upon for
any other purpose, or relied upon by any other person, firm or corporation for
any purpose, without my prior written consent.
Very truly yours,
EXHIBIT G
---------
FORM OF OFFICER'S CERTIFICATE
-----------------------------
I, the undersigned, [Chairman of the Board/President/Vice
President/Treasurer] of [Name of Credit Party], a corporation organized and
existing under the laws of the State of ___________ (the "Company"), do hereby
certify that:
This Certificate is furnished pursuant to Section 5 of the Credit
Agreement, dated as of October 31, 1991, and amended and restated as of October
30, 1992, and amended and restated as of June 4, 1993, and amended and restated
as of April 28, 1994, and further amended and restated as of January 26, 1996,
among Autotote Corporation, Autotote Systems, Inc., the lenders from time to
time party thereto and Bankers Trust Company, as Agent (such Credit Agreement,
as in effect on the date of this Certificate, being herein called the "Credit
Agreement"). Unless other wise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Credit Agreement.
The following named individuals are elected officers of the Company,
each holds the office of the Company set forth opposite his name and has held
such office since __________, 19__./1/ The signature written opposite the
-
name and title of each such officer is his correct signature.
Name/2// Office Signature
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
Attached hereto as Exhibit A is a certified copy of the Certificate of
Incorporation of the Company as filed in the Office of the Secretary of State of
the
_____________________________
/1/ Insert a date prior to the time of any corporate action relating to the
-
Credit Agreement or any other Credit Document.
/2/ Include name, office and signature of each officer who will sign any
-
Credit Document, including the officer who will sign the certification at
the end of this Certificate.
EXHIBIT G
Page 2
of ________ on ___________, 19__, together with all amendments thereto adopted
through the date hereof.
Attached hereto as Exhibit B is a true and correct copy of the By-Laws
of the Company which were duly adopted, are in full force and effect on the date
hereof, and have been in effect since _____________, 19__.
Attached hereto as Exhibit C is a true and correct copy of resolutions
which were duly adopted on __________, 19__ [by unanimous written consent of the
Board of Directors of the Company] [by a meeting of the Board of Directors of
the Company at which a quorum was present and acting throughout], and said
resolutions have not been rescinded, amended or modified. Except as attached
hereto as Exhibit C, no resolutions have been adopted by the Board of Directors
of the Company which deal with the execution, delivery or performance of any of
the Credit Documents to which the Company is party.
Attached hereto as Exhibit D is a true and correct copy of the Tax
Sharing Agreement.
On the date hereof, all of the conditions in Sections 5.09, 5.10 and
6.01 of the Credit Agreement have been satisfied.]/3//
[6.] On the date hereof, the representations and warranties contained
in the Credit Agreement and in the other Credit Documents are true and correct
in all material respects, both before and after giving effect to each Credit
Event to occur on the date hereof and the application of the proceeds thereof
(it being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
[7.] On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from the Credit Events to occur on the date
hereof or from the application of the proceeds thereof.
___________________________
/3/ Insert items 6 and 7 only in the certificate delivered by Holdings.
[8.] There is no proceeding for the dissolution or liquidation of the
Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
__________, 1994.
______________________________
Name:
Title:
EXHIBIT G
Page 4
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby
certify that:
l. [Name of Person making above certifications] is the duly elected
and qualified [Chairman of the Board/President/Vice President/Treasurer] of the
Company and the signature above is his genuine signature.
2. The certifications made by [name of Person making above
certifications] in Items 2, 3, 4, 5 and [8][10] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of
_________, 1994.
____________________________
Name:
Title:
EXHIBIT H
---------
FIRST AMENDMENT TO THE AMENDED
AND RESTATED SUBSIDIARY
AND AFFILIATE GUARANTY
---------------------------------------
FIRST AMENDMENT TO THE AMENDED AND RESTATED SUBSIDIARY AND AFFILIATE
GUARANTY (this "Amendment"), dated as of January 26, 1996, among each of the
undersigned guarantors (each a "Guarantor" and, collectively, the "Guarantors")
and Bankers Trust Company, as Agent (the "Agent"). Except as otherwise defined
herein, capitalized terms used herein and defined in the Credit Agreement (as
hereinafter defined) shall be used herein as so defined.
W I T N E S S E T H :
-------------------
WHEREAS, Autotote Corporation ("Holdings"), Autotote Systems, Inc.
(the "Borrower"), the lenders (the "Banks") from time to time party thereto, and
the Agent, have entered into a Credit Agreement, dated as of October 31, 1991,
and amended and restated as of October 30, 1992, and amended and restated as of
June 4, 1993, and further amended and restated as of April 28, 1994 (as the same
has been amended, modified or supplemented to, but not including, the date
hereof, the "Original Credit Agreement");
WHEREAS, Holdings, the Borrower, the Banks and the Agent have further
amended and restated the Original Credit Agreement as of January 26, 1996 (as so
amended and restated and as further amended, modified or supplemented from time
to time, the "Credit Agreement");
WHEREAS, in connection with the execution of the Original Credit
Agreement, the Guarantors entered into an Amended and Restated Subsidiary and
Affiliate Guaranty, dated as of October 31, 1991, and amended and restated as of
April 28, 1994 (as amended, modified or supplemented from time to time, the
"Subsidiaries Guaranty");
WHEREAS, the Credit Agreement constitutes the "Credit Agreement" for
all purposes of, and as defined in, the Subsidiaries Guaranty;
WHEREAS, each Guarantor has obtained, and will continue to obtain,
benefits as a result of the extensions of credit to the Borrower under the
Credit Agreement;
WHEREAS, it is a condition precedent to the conversion and/or making
of Loans and the issuance of Letters of Credit to the Borrower pursuant to the
Credit
Agreement that the Guarantors shall have executed and delivered to the Agent
this Amendment to the Subsidiaries Guaranty; and
WHEREAS, each Guarantor desires to execute this Amendment to satisfy
the conditions described in the preceding paragraph and to further amend the
Subsidiaries Guaranty as provided herein;
NOW, THEREFORE, IT IS AGREED:
1. The Credit Agreement constitutes the "Credit Agreement" for all purposes
of, and as defined in, the Subsidiaries Guaranty.
2. Clauses (a) and (b) of Section 12 of the Subsidiaries Guaranty are hereby
amended by deleting the information set forth therein in its entirety and
inserting the following information in lieu thereof:
"(a) if to any Guarantor, to such Guarantor at:
c/o Autotote Corporation
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx
with a copy to:
Autotote Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
EXHIBIT H
Page 3
(b) if to the Agent at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx".
3. Section 20 of the Subsidiaries Guaranty is hereby amended by deleting the
words "Section 8.11, 9.15(c) or 9.16" appearing therein and inserting the words
"Section 8.11, 9.16(c) or 9.17" in lieu thereof.
4. Each Guarantor hereby acknowledges and agrees that the Subsidiaries
Guaranty remains in full force and effect, and each Guarantor hereby affirms,
ratifies and reaffirms its respective obligations under the Subsidiaries
Guaranty.
5. This Amendment is limited as specified and shall not constitute a
modification, amendment or waiver of any other provision of the Subsidiaries
Guaranty.
6. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed or delivered shall be an original, but all of which shall together
constitute one and the same instrument. A complete set of counterparts shall be
lodged with each Guarantor and the Agent.
7. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
8. This Amendment shall become effective as of the date first written above on
the date (the "Amendment Effective Date") when (i) each of the Guarantors shall
have signed a counterpart hereof (whether the same or different counterparts)
and shall have delivered (including by way of facsimile transmission) the same
to the Agent at its Notice Office and (ii) the Restatement Effective Date shall
have occurred under, and as defined in, the Credit Agreement.
9. From and after the Amendment Effective Date all references in the
Subsidiaries Guaranty and the other Credit Documents to the Subsidiaries
Guaranty shall be deemed to be references to the Subsidiaries Guaranty as
amended hereby.
IN WITNESS WHEREOF, each of the parties hereby has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
GUARANTORS
----------
AUTOTOTE LOTTERY CORPORATION
By___________________________
Title:
AUTOTOTE ENTERPRISES, INC.
By___________________________
Title:
AUTOTOTE KENO CORPORATION
By___________________________
Title:
AUTOTOTE CBS, INC.
By___________________________
Title:
NEWARK HOLDINGS, INC.
By___________________________
Title:
AUTOTOTE LOTTERY CANADA, INC.
By___________________________
Title:
AUTOTOTE PRODUCTS, INC.
By___________________________
Title:
AUTOTOTE CANADA, INC.
By___________________________
Title:
AUTOTOTE INTERNATIONAL, INC.
By___________________________
Title:
AUTOTOTE MANAGEMENT
CORPORATION
By___________________________
Title:
AUTOTOTE MEXICO, LTD.
By____________________________
Title:
AUTOTOTE MANUFACTURING
CORPORATION
By_____________________________
Title:
HTP, INC.
By_____________________________
Title:
AUTOTOTE COMMUNICATION SERVICES, INC
By_____________________________
Title:
RACING TECHNOLOGY, INC.
By_____________________________
Title:
XXXXXX X. XXXXXXXX PRODUCTIONS, INC.
By______________________________
Title:
Accepted and Agreed to:
BANKERS TRUST COMPANY,
As Agent for the Banks
By________________________
Title:
EXHIBIT I
---------
FIRST AMENDMENT TO THE AMENDED
AND RESTATED PLEDGE AGREEMENT
-----------------------------
FIRST AMENDMENT TO THE AMENDED AND RESTATED PLEDGE AGREEMENT (this
"Amendment"), dated as of January 26, 1996, among each of the undersigned
pledgors (each a "Pledgor" and, collectively, the "Pledgors") and Bankers Trust
Company, as Collateral Agent (the "Pledgee") under the Pledge Agreement referred
to below. Except as otherwise defined herein, capitalized terms used herein and
defined in the Credit Agreement (as hereinafter defined) shall be used herein as
so defined.
W I T N E S S E T H :
-------------------
WHEREAS, Autotote Corporation ("Holdings"), Autotote Systems, Inc.
(the "Borrower"), the lenders (the "Banks") from time to time party thereto, and
Bankers Trust Company, as Agent (the "Agent"), have entered into a Credit
Agreement, dated as of October 31, 1991, and amended and restated as of October
30, 1992, and amended and restated as of June 4, 1993, and further amended and
restated as of April 28, 1994 (as the same has been amended, modified or
supplemented to, but not including, the date hereof, the "Original Credit
Agreement");
WHEREAS, Holdings, the Borrower, the Banks and the Agent have further
amended and restated the Original Credit Agreement as of January 26, 1996 (as so
amended and restated and as further amended, modified or supplemented from time
to time, the "Credit Agreement");
WHEREAS, in connection with the execution of the Original Credit
Agreement, the Pledgors and the Pledgee entered into an Amended and Restated
Pledge Agreement, dated as of October 31, 1991, and amended and restated as of
April 28, 1994 (as amended, modified or supplemented from time to time, the
"Pledge Agreement");
WHEREAS, the Credit Agreement constitutes the "Credit Agreement" for
all purposes of, and as defined in, the Pledge Agreement;
WHEREAS, it is a condition precedent to the conversion and/or making
of Loans and the issuance of Letters of Credit to the Borrower pursuant to the
Credit Agreement that the Pledgors shall have executed and delivered to the
Collateral Agent this Amendment to the Pledge Agreement; and
EXHIBIT I
Page 2
WHEREAS, each of the Pledgors desires to execute this Amendment to
satisfy the conditions described in the preceding paragraph and to further amend
the Pledge Agreement as provided herein;
NOW, THEREFORE, IT IS AGREED:
1. The Credit Agreement constitutes the "Credit Agreement" for all purposes
of, and as defined in, the Pledge Agreement.
2. Clauses (a) and (b) of Section 19 of the Pledge Agreement is hereby amended
by deleting the information set forth therein in its entirety and inserting the
following information in lieu thereof:
"(a) if to any Pledgor, to such Pledgor at:
c/o Autotote Corporation
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx
with a copy to:
Autotote Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
(b) if to the Agent at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx".
3. Section 23 of the Pledge Agreement is hereby amended by (i) deleting the
words "Section 8.11, 9.15(c) or 9.16" appearing therein and inserting the words
"Section 8.11, 9.16(c) or 9.17" in lieu thereof and (ii) deleting the word
"Pledge" appearing therein and substituting the word "Pledgee" therefor..
EXHIBIT I
Page 3
4. Annexes A, B and C to the Pledge Agreement are hereby amended by deleting
the information contained in such Annexes A, B and C and replacing such
information with the information contained in Annexes A, B and C attached
hereto. Each Pledgor represents and warrants, as to the stock of corporations
and promissory notes owned by such Pledgor, that on the Amendment Effective Date
(as hereinafter defined), (a) each Subsidiary of such Pledgor, and the direct
ownership thereof, is listed on Annex A hereto; (b) the Stock (as defined in the
Pledge Agreement) owned by such Pledgor consists of the number and type of
shares of the stock of the corporations as described on Annex B hereto; (c) such
Stock constitutes that percentage of the issued and outstanding capital stock of
the issuing corporation as is set forth on Annex B hereto; (d) the Notes (as
defined in the Pledge Agreement) held by such Pledgor consist of the promissory
notes as described on Annex C hereto; (e) such Pledgor is the holder of record
and sole beneficial owner of the Stock and Notes and there exist no options or
preemptive rights in respect of any of the Stock; and (f) all of the
representations and warranties contained in the Pledge Agreement are true and
correct in all material respects.
5. Each Pledgor hereby acknowledges and agrees that the Pledge Agreement
remains in full force and effect, and each Pledgor hereby ratifies, affirms and
reaffirms its respective obligations under the Pledge Agreement.
6. This Amendment is limited as specified and shall not constitute a
modification, amendment or waiver of any other provision of the Pledge
Agreement.
7. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed or delivered shall be an original, but all of which shall together
constitute one and the same instrument. A complete set of counterparts shall be
lodged with each Pledgor and the Pledgee.
8. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
9. This Amendment shall become effective as of the date first written above on
the date (the "Amendment Effective Date") when (i) each Pledgor and the Pledgee
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Collateral Agent at its Notice Office and (ii) the
Restatement Effective Date shall have occurred under, and as defined in, the
Credit Agreement.
10. From and after the Amendment Effective Date all references in the Pledge
Agreement and the other Credit Documents to the Pledge Agreement shall be deemed
to be references to the Pledge Agreement as amended hereby.
EXHIBIT I
Page 4
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
PLEDGORS
--------
AUTOTOTE CORPORATION,
as a Pledgor
By__________________________
Title:
AUTOTOTE SYSTEMS, INC.,
as a Pledgor
By__________________________
Title:
AUTOTOTE LOTTERY CORPORATION,
as a Pledgor
By__________________________
Title:
AUTOTOTE ENTERPRISES, INC.,
as a Pledgor
By__________________________
Title:
EXHIBIT I
Page 5
AUTOTOTE KENO CORPORATION,
as a Pledgor
By__________________________
Title:
AUTOTOTE CBS, INC.,
as a Pledgor
By__________________________
Title:
NEWARK HOLDINGS, INC.,
as a Pledgor
By__________________________
Title:
AUTOTOTE LOTTERY CANADA, INC.
as a Pledgor
By__________________________
Title:
AUTOTOTE PRODUCTS, INC.,
as a Pledgor
By__________________________
Title:
EXHIBIT I
Page 6
AUTOTOTE CANADA, INC.,
as a Pledgor
By__________________________
Title:
AUTOTOTE INTERNATIONAL, INC.,
as a Pledgor
By__________________________
Title:
AUTOTOTE MANAGEMENT CORPORATION,
as a Pledgor
By__________________________
Title:
AUTOTOTE MEXICO, LTD.,
as a Pledgor
By__________________________
Title:
EXHIBIT I
Page 7
AUTOTOTE MANUFACTURING CORPORATION,
as a Pledgor
By__________________________
Title:
HTP, INC.,
as a Pledgor
By__________________________
Title:
AUTOTOTE COMMUNICATIONS SERVICES, INC.,
as a Pledgor
By__________________________
Title:
RACING TECHNOLOGY, INC.,
as a Pledgor
By__________________________
Title:
XXXXXX X. XXXXXXXX PRODUCTIONS, INC.,
as a Pledgor
By__________________________
Title:
EXHIBIT I
Page 8
PLEDGEE
-------
BANKERS TRUST COMPANY,
as Collateral Agent,
as Pledgee
By_______________________
Title:
EXHIBIT J
---------
FIRST AMENDMENT TO THE
AMENDED AND RESTATED
SECURITY AGREEMENT
------------------------
FIRST AMENDMENT TO THE AMENDED AND RESTATED SECURITY AGREEMENT (this
"Amendment"), dated as of January 26, 1996, among each of the undersigned
assignors (each an "Assignor" and, collectively, the "Assignors") and Bankers
Trust Company, as Collateral Agent (the "Collateral Agent") under the Security
Agreement referred to below. Except as otherwise defined herein, capitalized
terms used herein and defined in the Credit Agreement (as hereinafter defined)
shall be used herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Autotote Corporation ("Holdings"), Autotote Systems, Inc.
(the "Borrower"), the lenders (the "Banks") from time to time party thereto and
Bankers Trust Company, as Agent (the "Agent"), have entered into a Credit
Agreement, dated as of October 31, 1991, and amended and restated as of October
30, 1992, amended and restated as of June 4, 1993, and further amended and
restated as of April 28, 1994 (as the same has been amended, modified or
supplemented to, but not including, the date hereof, the "Original Credit
Agreement");
WHEREAS, Holdings, the Borrower, the Banks and the Agent have further
amended and restated the Original Credit Agreement as of January 26, 1996 (as so
amended and restated and as further amended, modified or supplemented from time
to time, the "Credit Agreement");
WHEREAS, in connection with the execution of the Original Credit
Agreement, the Assignors and the Collateral Agent entered into an Amended and
Restated Security Agreement, dated as of October 31, 1991, and amended and
restated as of April 28, 1994 (as amended, modified or supplemented from time to
time, the "Security Agreement");
WHEREAS, the Credit Agreement constitutes the "Credit Agreement" for
all purposes of, and as defined in, the Security Agreement;
WHEREAS, it is a condition precedent to the conversion and/or making
of Loans and the issuance of Letters of Credit to the Borrower pursuant to the
Credit Agreement that each Assignor shall have executed and delivered to the
Collateral Agent this Amendment; and
EXHIBIT J
Page 2
WHEREAS, each Assignor desires to execute and deliver this Amendment
to the Collateral Agent in order to satisfy the conditions described in the
preceding paragraph and to further amend the Security Agreement;
NOW, THEREFORE, IT IS AGREED:
1. The Credit Agreement constitutes the "Credit Agreement" for all purposes
of, and as defined in, the Security Agreement.
2. Clauses (a) and (b) of Section 11.1 of the Security Agreement is hereby
amended by deleting the information set forth therein in its entirety and
inserting the following information in lieu thereof:
"(a) if to any Assignor, to such Assignor at:
c/o Autotote Corporation
000 Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxx
with a copy to:
Autotote Corporation
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel
(b) if to the Collateral Agent at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx Xxxxxxx".
3. Section 11.9 of the Security Agreement is hereby amended by deleting the
last sentence appearing in clause (a) thereof and inserting the following new
sentence in lieu thereof:
"As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Revolving Loan Commitment and all Interest Rate
Protection Agreements or Other Hedging Agreements have been terminated, no
Note under the Credit Agreement is outstanding (and all Loans have been
repaid in full), all Letters
EXHIBIT J
Page 3
of Credit have been terminated and all Obligations then owing have been
paid in full."
4. Section 11.11 of the Security Agreement is hereby amended by deleting the
words "Section 8.11, 9.15(c) or 9.16" appearing therein and inserting the words
"Section 8.11, 9.16(c) or 9.17" in lieu thereof.
5. Annexes B, C, D, E, F, G and H to the Security Agreement are hereby amended
by deleting the information contained in such Annexes B, C, D, E, F, G and H and
replacing such information with the information contained in Annexes B, C, D, E,
F, G and H attached hereto. Each Assignor (i) represents and warrants that on
the Amendment Effective Date (as hereinafter defined) all the information set
forth on Annexes B, C, D, E, F, G and H hereto is of the type required to be
delivered by such Assignor pursuant to the Security Agreement and that all such
information is true and correct with respect to such Assignor on and as of the
Amendment Effective Date and (ii) makes each of the representations and
warranties contained in the Security Agreement with respect to itself and hereby
represents and warrants that same are true and correct in all material respects
on and as of the Amendment Effective Date.
6. Each Assignor acknowledges and agrees that the Security Agreement remains
in full force and effect, and each Assignor hereby ratifies, affirms and
reaffirms all of its obligations under the Security Agreement.
7. This Amendment is limited as specified and shall not constitute a
modification, amendment or waiver of any other provision of the Security
Agreement.
8. This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed or delivered shall be an original, but all of which shall together
constitute one and the same instrument. A complete set of counterparts shall be
lodged with the Assignors and the Collateral Agent.
9. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.
10. This Amendment shall become effective as of the date first written above
on the date (the "Amendment Effective Date") when (i) each Assignor and the
Collateral Agent shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Collateral Agent at its Notice Office and (ii) the
Restatement Effective Date shall have occurred under, and as defined in, in the
Credit Agreement.
11. From and after the Amendment Effective Date all references in the
Security Agreement and the other Credit Documents to the Security Agreement
shall be deemed to be references to the Security Agreement as amended hereby.
IN WITNESS WHEREOF, each of the parties hereby has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
ASSIGNORS
---------
AUTOTOTE CORPORATION,
as an Assignor
By___________________________
Title:
AUTOTOTE SYSTEMS, INC.,
as an Assignor
By___________________________
Title:
AUTOTOTE LOTTERY CORPORATION,
as an Assignor
By___________________________
Title:
AUTOTOTE ENTERPRISES, INC.,
as an Assignor
By___________________________
Title:
AUTOTOTE KENO CORPORATION,
as an Assignor
By___________________________
Title:
AUTOTOTE CBS, INC.,
as an Assignor
By___________________________
Title:
NEWARK HOLDINGS, INC.,
as an Assignor
By___________________________
Title:
AUTOTOTE LOTTERY CANADA, INC.,
as an Assignor
By___________________________
Title:
AUTOTOTE PRODUCTS, INC.,
as an Assignor
By___________________________
Title:
AUTOTOTE CANADA, INC.,
as an Assignor
By___________________________
Title:
AUTOTOTE INTERNATIONAL, INC.,
as an Assignor
By___________________________
Title:
AUTOTOTE MANAGEMENT
CORPORATION,
as an Assignor
By_____________________________
Title:
AUTOTOTE MEXICO, LTD.,
as an Assignor
By______________________________
Title:
AUTOTOTE MANUFACTURING
CORPORATION,
as an Assignor
By______________________________
Title:
HTP, INC.,
as an Assignor
By______________________________
Title:
AUTOTOTE COMMUNICATION SERVICES, INC.,
as an Assignor
By______________________________
Title:
RACING TECHNOLOGY, INC.,
as an Assignor
By______________________________
Title:
XXXXXX X. XXXXXXXX PRODUCTIONS, INC.,
as an Assignor
By______________________________
Title:
COLLATERAL AGENT
----------------
BANKERS TRUST COMPANY,
as Collateral Agent
By_______________________________
Title:
EXHIBIT K
---------
[LETTERHEAD OF AGENT FOR SERVICE OF PROCESS]
[Date]
To the Agent and the
Banks party to the
Credit Agreement referred
to below:
Ladies and Gentlemen:
Reference is made to (i) the Credit Agreement, dated as of October 31,
1991, and amended and restated as of October 30, 1992, and amended and restated
as of June 4, 1993, and amended and restated as of April 28, 1994, and further
amended and restated as of January 26, 1996, among Autotote Corporation
("Holdings"), Autotote Systems, Inc. (the "Borrower"), the lenders from time to
time party thereto (the "Banks") and Bankers Trust Company, as Agent (the
"Agent") (as such Credit Agreement may be further modified, supplemented or
amended from time to time, the "Credit Agreement") and (ii) the Amended and
Restated Subsidiary and Affiliate Guaranty, dated as of October 31, 1991, and
amended and restated as of April 28, 1994, and further amended and restated as
of January 26, 1996, made by certain Subsidiaries of Holdings (each a
"Subsidiary Guarantor") (as such Amended and Restated Subsidiary and Affiliate
Guaranty may be modified, supplemented or amended from time to time, the
"Subsidiaries Guaranty").
Each of Holdings and the Borrower, pursuant to Section 13.08 of the
Credit Agreement, and each Subsidiary Guarantor, pursuant to Section 14 of the
Subsidiaries Guaranty, have irrevocably designated, appointed and empowered the
undersigned, __ ___________________, with offices currently located at
_____________, New York, New York _____, as their authorized designee, appointee
and agent to receive, accept and acknowledge for and on their behalf, and in
respect of their property, service of any and all legal process, summons,
notices and documents which may be served in any such legal action or proceeding
with respect to the Credit Agreement, the Subsidiaries Guaranty or any other
Credit Document (as defined in the Credit Agreement) in the courts of the State
of New York or of the United States of America for the Southern District of New
York.
EXHIBIT K
Page 2
The undersigned hereby informs you that it irrevocably accepts such
appointment as agent as set forth in Section 13.08 of the Credit Agreement and
Section 14 of the Subsidiaries Guaranty and agrees with you that the undersigned
(i) shall inform the Agent promptly in writing of any change of its address in
New York City, (ii) shall notify the Agent of any termination of any of the
agency relationships created by Section 13.08 of the Credit Agreement and
Section 14 of the Subsidiaries Guaranty, (iii) shall perform its obligations as
such process agent in accordance with the provisions of Section 13.08 of the
Credit Agreement and Section 14 of the Subsidiaries Guaranty and (iv) shall
forward promptly to Holdings, the Borrower and each Subsidiary Guarantor any
legal process received by the undersigned in its capacity as process agent.
As process agent, the undersigned, and its successor or successors,
agree to discharge the above-mentioned obligations and will not refuse
fulfillment of such obligations under Section 13.08 of the Credit Agreement and
Section 14 of the Subsidiaries Guaranty.
Very truly yours,
_____________________
By____________________________
Title:
EXHIBIT L
---------
INTERCOMPANY NOTE
-----------------
New York, New York
_________ __, 199_
FOR VALUE RECEIVED, [Name of North American Subsidiary] (the "Payor"),
hereby promises to pay on demand to the order of [Autotote Corporation] [Name of
Wholly-Owned North American Subsidiary] or its assigns (the "Payee"), in lawful
money of the United States of America in immediately available funds, at such
location in the United States of America as the Payee shall from time to time
designate, the unpaid principal amount of all loans and advances made by the
Payee to the Payor.
The Payor promises also to pay interest on the unpaid principal amount
hereof in like money at said office from the date hereof until paid at such rate
per annum as shall be agreed upon from time to time by the Payor and Payee.
Upon the commencement of any bankruptcy, reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar proceeding of any jurisdiction relating to the Payor, the unpaid
principal amount hereof shall become immediately due the payable without
presentment, demand, protest or notice of any kind in connection with this Note.
This Note evidences certain permitted intercompany indebtedness
referred to in the Credit Agreement, dated as of October 31, 1991, and amended
and restated as of October 30, 1992, and amended and restated as of June 4,
1993, and amended and restated as of April 28, 1994, and further amended and
restated as of January 26, 1996 (as further modified, supplemented or amended
from time to time, the "Credit Agreement"), among the lenders from time to time
party thereto and Bankers Trust Company, as Agent, and is subject to the terms
thereof, and shall be pledged by the Payee pursuant to the Pledge Agreement (as
defined in the Credit Agreement). The Payor hereby acknowledges and agrees that
the Collateral Agent pursuant to and as defined in the Pledge Agreement, as in
effect from time to time, may exercise all rights provided therein with respect
to this Note.
The Payee is hereby authorized to record all loans and advances made
by it to the Payor (all of which shall be evidenced by this Note), and all
repayments or prepayments thereof, in its books and records, such books and
records constituting prima facie evidence of the accuracy of the information
contained therein.
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
EXHIBIT L
Page 2
The Payor hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
[NAME OF PAYOR]
By___________________________
Title:
Pay to the order of
________________________________
Date: ____________________
[NAME OF PAYEE]
By_______________________________
Title:
EXHIBIT M
---------
SUBORDINATION PROVISIONS
------------------------
Each promissory note evidencing Indebtedness (as defined in the Credit
Agreement to which this Exhibit M is attached) incurred by Holdings or a North
American Subsidiary (the "Payor"), owing to any Non-North American Subsidiary
shall have the following subordination provisions attached as Annex A thereto,
and shall include in the text of such promissory note the language: "THE
INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATE AND JUNIOR IN RIGHT OF
PAYMENT TO ALL SENIOR INDEBTEDNESS (AS DEFINED IN ANNEX A HERETO) TO THE EXTENT
PROVIDED IN ANNEX A."
ANNEX A
TO PROMISSORY NOTE
------------------
Section 1.01. Subordination of Liabilities. [AUTOTOTE CORPORATION]
----------------------------
[NAME OF NORTH AMERICAN SUBSIDIARY] ("Payor"), for itself, its successors and
assigns, covenants and agrees and each holder of the promissory note to which
this Annex A is attached (the "Note") by its acceptance thereof likewise
covenants and agrees that the payment of the principal of, and interest on, and
all other amounts owing in respect of, the Note is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, to the
prior payment in full in cash of all Senior Indebtedness (as defined in Section
1.07 hereof). The provisions of this Annex A shall constitute a continuing
offer to all persons who, in reliance upon such provisions, become holders of,
or continue to hold, Senior Indebtedness, and such provisions are made for the
benefit of the holders of Senior Indebtedness, and such holders are hereby made
obligees hereunder to the same extent as if their names were written herein as
such, and they and/or each of them may proceed to enforce such provisions.
Section 1.02. Payor Not to Make Payments with Respect to Notes in
---------------------------------------------------
Certain Circumstances. (a) Upon the maturity of any Senior Indebtedness
---------------------
(including interest thereon or fees or any other amounts owing in respect
thereof), whether at stated maturity, by acceleration or otherwise, all
principal thereof and premium, if any, and interest thereon (including, without
limitation, any interest accruing subsequent to the filing of a petition in
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) or fees
or any other amounts owing in respect thereof, shall first be paid in full in
cash
EXHIBIT M
Page 2
before any payment of any kind of character (whether in cash, property of
securities) is made on account of the principal of (including installments
thereof), or interest on, or any amount otherwise owing in respect of, the Note.
Each holder of the Note hereby agrees that, so long as an Event of Default (as
defined below), or event which with notice or lapse of time or both would
constitute an Event of Default, in respect of any Senior Indebtedness exists, it
will not ask, demand, xxx for, or otherwise take, accept or receive, any amounts
owing in respect of the Note. As used herein, the term "Event of Default" shall
mean any Event of Default, under and as defined in, the relevant documentation
governing any Senior Indebtedness.
(b) In the event that notwithstanding the provisions of the preceding
sub section (a) of this Section 1.02, the Payor shall make any payment on
account of the principal of, or interest on, or amounts otherwise owing in
respect of, the Note, at a time when payment is not permitted by said subsection
(a), such payment shall be held by the holder of the Note, in trust for the
benefit of, and shall be paid forthwith over and delivered to, the holders of
Senior Indebtedness or their representative or representatives under the
agreements pursuant to which the Senior Indebtedness may have been issued, as
their respective interests may appear, for application pro rata to the payment
of all Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in full in cash in accordance with the terms of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness. Without in any way modifying the
provisions of this Annex A or affecting the subordination effected hereby if
such notice is not given, the Payor shall give the holder of the Note prompt
written notice of any maturity of Senior Indebtedness after which such Senior
Indebtedness remains unsatisfied.
Section 1.03. Note Subordinated to Prior Payment of all Senior
------------------------------------------------
Indebtedness on Dissolution, Liquidation or Reorganization of Payor. Upon any
-------------------------------------------------------------------
distribution of assets of the Payor upon any dissolution, winding up,
liquidation or reorganization of the Payor (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of such of the principal of, premium, if
any, and interest (including, without limitation, any interest accruing
subsequent to the filing of a petition in bankruptcy at the rate provided
in the documentation with respect thereto, whether or not such interest is
an allowed claim under applicable law) and all other amounts due on such
Senior Indebtedness before the holder of the Note is entitled to receive
any payment of any kind or character (whether in
EXHIBIT M
Page 3
cash, property or securities) on account of the principal of or interest on
or any other amount owing in respect of the Note;
(b) any payment or distributions of assets of the Payor of any kind
or character, whether in cash, property or securities to which the holder
of the Note would be entitled except for the provisions of this Annex A,
shall be paid by the liquidating trustee or agent or other person making
such payment or distribution, whether a trustee or agent, directly to the
holders of Senior Indebtedness or their representative or representatives
under the agreements pursuant to which the Senior Indebtedness may have
been issued, to the extent necessary to make payment in full in cash of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 1.03, any payment or distribution of assets of the Payor of
any kind or character, whether in cash, property or securities, shall be
received by the holder of the Note on account of principal of, or interest
or other amounts due on, the Note before all Senior Indebtedness is paid in
full in cash, such payment or distribution shall be received and held in
trust for and shall be paid over to the holders of the Senior Indebtedness
remaining unpaid or unprovided for or their representative or
representatives under the agreements pursuant to which the Senior
Indebtedness may have been issued, for application to the payment of such
Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full in cash, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby if such notice is not given, the
Payor shall give prompt written notice to the holder of the Note of any
dissolution, winding up, liquidation or reorganization of the Payor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or otherwise).
Section 1.04. Subrogation. Subject to the prior payment in full of
-----------
all Senior Indebtedness in cash, the holder of the Note shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Payor applicable to the Senior Indebtedness until
all amounts owing on the Note shall be paid in full, and for the purpose of such
subrogation no payments or distributions
EXHIBIT M
Page 4
to the holders of the Senior Indebtedness by or on behalf of the Payor or by or
on behalf of the holder of the Note by virtue of this Annex A which otherwise
would have been made to the holder of the Note, shall be deemed to be payment by
the Payor to or on account of the Senior Indebtedness, it being understood that
the provisions of this Annex A are and are intended solely for the purpose of
defining the relative rights of the holder of the Note, on the one hand, and the
holders of the Senior Indebtedness, on the other hand.
Section 1.05. Obligation of the Payor Unconditional. Nothing
--------------------------------------
contained in this Annex A or in the Note is intended to or shall impair, as
between the Payor and the holder of the Note, the obligation of the Payor, which
is absolute and unconditional, to pay to the holder of the Note the principal of
and interest on the Note as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holder of the Note and creditors of the Payor other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the holder of the Note from exercising all remedies otherwise permitted by
applicable law, subject to the rights, if any, under this Annex A of the holders
of Senior Indebtedness in respect of cash, property, or securities of the Payor
received upon the exercise of any such remedy and subject to the limitation on
the exercise of such rights as set forth in this Annex A. Upon any distribution
of assets of the Payor referred to in this Annex A, the holder of the Note shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the holder of the
Note, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other indebtedness
of the Payor, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Annex A.
Section 1.06. Subordination Rights not Impaired by Acts or Omissions
------------------------------------------------------
of Payor or Holders of Senior Indebtedness. No right of any present or future
------------------------------------------
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by an act or failure to
act on the part of the Payor or by any act or failure to act in good faith by
any such holder, or by any noncompliance by the Payor with the terms and
provisions of the Note, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Note with respect thereto, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of,
EXHIBIT M
Page 5
change or extend the time of payment of, or renew or alter, any Senior
Indebtedness, or amend, modify or supplement any agreement or instrument
governing or evidencing such Senior Indebtedness or any other document referred
to therein, or exercise or refrain from exercising any other of their rights
under the Senior Indebtedness including, without limitation, the waiver of a
default thereunder and the release of any collateral securing such Senior
Indebtedness, all without notice to or assent from the holder of the Note.
Section 1.07. Senior Indebtedness. (a) The term "Senior
-------------------
Indebtedness" shall mean all Obligations (as defined below) (i) of the Payor
and/or its Subsidiaries (as defined below) under the Credit Agreement (as
defined below) and any other Credit Document (as defined in the Credit
Agreement) and any renewal, extension, restatement or refunding thereof and (ii)
of the Payor and/or its Subsidiaries in respect of all Interest Rate Protection
Agreements (as defined below) and all Other Hedging Agreements (as defined
below) with Other Creditors (as defined below).
(b) As used in this Agreement, the terms set forth below shall have
the respective meanings provided below:
"Credit Agreement" shall mean the Credit Agreement, dated as of
October 31, 1991, and amended and restated as of October 30, 1992, and amended
and restated as of June 4, 1993, and amended and restated as of April 28, 1994,
and further amended and restated as of January 26, 1996, among Autotote
Corporation, Autotote Systems, Inc., the lenders from time to time party thereto
(the "Banks") and Bankers Trust Company, as Agent; as the same may be further
amended, modified, extended, renewed, replaced, restated, supplemented or
refinanced from time to time, and including any agreement ex tending the
maturity of, refinancing or restructuring (including, but not limited to, the
inclusion of additional borrowers or guarantors thereunder or any increase in
the amount borrowed) all or any portion of, the indebtedness under such
agreement or of any successor agreements.
"Interest Rate Protection Agreements" shall have the meaning provided
in the Credit Agreement.
EXHIBIT M
Page 6
"Obligations" shall mean any principal, interest, premium, penalties,
fees, indemnities and other liabilities and obligations payable under the
documentation governing any Senior Indebtedness (including, without limitation,
all interest accruing subsequent to the filing of a petition in bankruptcy at
the rate provided in the governing documentation, whether or not such interest
is an allowed claim under applicable law).
"Other Creditors" shall mean any Bank or any affiliate thereof which
enters into, or which participates in, the extension of Interest Rate Protection
Agreements or Other Hedging Agreements on or after the Restatement Effective
Date (even if any such Bank ceases to be a Bank under the Credit Agreement for
any reason) and their subsequent assigns, if any, in all such cases in their
capacity as creditors with respect to Interest Rate Protection Agreements or
Other Hedging Agreements.
"Other Hedging Agreements" shall have the meaning provided in the
Credit Agreement.
"Restatement Effective Date" shall have the meaning provided in the
Credit Agreement.
"Subsidiary" shall have the meaning provided in the Credit Agreement.
EXHIBIT N
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
-----------------------------------
Date __________, 19__
Reference is made to the Credit Agreement described in Item 2 of Annex
I hereto (as such Credit Agreement may hereafter be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Unless defined in
Annex I hereto, terms defined in the Credit Agreement are used herein as therein
defined. ___________ (the "Assignor") and __________ (the "Assignee") hereby
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I hereto (the "Assigned Share") of all of
the outstanding rights and obligations under the Credit Agreement relating to
the Tranches of Loans listed in Item 4 of Annex I hereto, including, without
limitation, (i) in the case of any assignment of all or any portion of the
Assignor's outstanding A Term Loans, all rights and obligations with respect to
the Assigned Share of such outstanding A Term Loans, (ii) in the case of any
assignment of all or any portion of the Assignor's outstanding B Term Loans, all
rights and obligations with respect to the Assigned Share of such outstanding B
Term Loans, and (iii) in the case of any assignment of all or any portion of the
Assignor's Revolving Loan Commitment, all rights and obligations with respect to
the Assigned Share of the Total Revolving Loan Commitment and of any outstanding
Revolving Loans, Swingline Loans and Letters of Credit.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the other Credit Documents or the execution, legality, validity, enforce
ability, genuineness, sufficiency or value of the Credit Agreement or the other
Credit Documents or any other instrument or document furnished pursuant thereto;
and (iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Holdings or any of its Subsidiaries or the
performance or observance by Holdings or any of its Subsidiaries of any of their
obligations under the Credit Agreement or the other Credit Documents to which
they are a party or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate
EXHIBIT N
Page 2
to make its own credit analysis and decision to enter into this Assignment and
Assumption Agreement; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Transferee under Section
13.04(b) of the Credit Agreement; (iv) appoints and authorizes the Agent and the
Collateral Agent to take such action as agent on its behalf and to exercise such
powers under the Credit Agreement and the other Credit Documents as are
delegated to the Agent and the Collateral Agent, as the case may be, by the
terms thereof, together with such powers as are reasonably incidental thereto;
[and] (v) agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Bank[; and (vi) to the extent legally entitled to do so,
attaches the forms described in Section 13.04(b) of the Credit Agreement]/1/.
-
4. Following the execution of this Assignment and Assumption Agreement
by the Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Agent. The effective date of this
Assignment and Assumption Agreement shall be the date of execution hereof by the
Assignor and the Assignee and the receipt of the consent of the Agent and/or the
Borrower to the extent required by the Credit Agreement and receipt by the Agent
of the administrative fee referred to in Section 13.04(b) of the Credit
Agreement, unless otherwise specified in Item 5 of Annex I hereto (the
"Settlement Date").
5. Upon the delivery of a fully executed original hereof to the Agent,
as of the Settlement Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Assumption
Agreement, have the rights and obligations of a Bank thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment and Assumption Agreement, relinquish its rights and be
released from its obligations under the Credit Agreement and the other Credit
Documents.
6. It is agreed that the Assignee shall be entitled to (x) all
interest on the Assigned Share of the Loans at the rates specified in Item 6 of
Annex I hereto; (y) all Commitment Fees (if applicable) on the Assigned Share of
the Revolving Loan Commitment at the rate specified in Item 7 of Annex I hereto;
and (z) all Letter of Credit Fees on the Assignee's participation in all Letters
of Credit at the rate specified in Item 8 of Annex I hereto, which, in each
case, accrue on and after the Settlement Date, such interest and, if applicable,
Commitment Fees and Letter of Credit Fees, to be paid by the Agent directly to
the Assignee. It is further agreed that all payments of principal made on the
Assigned Share of the Loans which occur on and after the Settlement Date will be
paid
_________________
/1/ Include if the Assignee is organized under the laws of a jurisdiction
-
outside of the United States.
EXHIBIT N
Page 3
directly by the Agent to the Assignee. Upon the Settlement Date, the
Assignee shall pay to the Assignor an amount specified by the Assignor in
writing which represents the Assigned Share of the principal amount of the
respective Loans made by the Assignor pursuant to the Credit Agreement which are
outstanding on the Settlement Date, net of any closing costs, and which are
being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
* * *
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR],
of _______, 19__ as Assignor
By_____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By_____________________________
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY,
as Agent
By________________________
Title:
[AUTOTOTE SYSTEMS, INC.
By_______________________
Title: ]/5/
-
____________________
/5/ To the extent required by the definition of Eligible-Transferee
-
contained in the Credit Agreement.
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrower: Autotote Systems, Inc.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of October 31, 1991, and amended and
restated as of October 30, 1992, and amended and restated as of June
4, 1993, and amended and restated as of April 28, 1994, and further
amended and restated as of January 26, 1996, among Autotote
Corporation, Autotote Systems, Inc., the lenders from time to time
party thereto and Bankers Trust Company, as Agent, as amended to the
date hereof.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
Revolving Loan
A Term Loans B Term Loans Commitment
------------- ------------- --------------
a. Aggregate Amount
for all Banks $_________ $__________ $_________
b. Assigned Share _________% ___________% _________%
c. Amount of Assigned
Share $_________ $__________ $_________
5. Settlement Date:
6. Rate of Interest As set forth in Section 1.08 of the
to the Assignee: Credit Agreement (unless otherwise
agreed to by the Assignor and the
Assignee)/6/
-
7. Commitment Commission: As set forth in Sections 3.01(a) of the
Credit Agreement (unless otherwise
agreed to by the Assignor and the
Assignee)/7/
-
8. Letter of Credit As set forth in Section 3.01(b) of the
Fees to the Assignee: Credit Agreement (unless otherwise
agreed to by the Assignor and the
Assignee)/8/
-
_________________
/6/ Autotote Systems, Inc. and the Agent shall direct the entire amount of the
-
interest to the Assignee at the rate set forth in Section 1.08 of the
Credit Agreement, with the Assignor and Assignee effecting the agreed upon
sharing of the interest through payments by the Assignee to the Assignor.
/7/ Autotote Systems, Inc. and the Agent shall direct the entire amount of the
-
Commitment Commission to the Assignee at the rate set forth in Sections
3.01(a) of the Credit Agreement, with the Assignor and the Assignee
effecting the agreed upon sharing of Commitment Commission through payment
by the Assignee to the Assignor.
/8/ Autotote Systems, Inc. and the Agent shall direct the entire amount of the
-
Letter of Credit Fees to the Assignee at the rate set forth in Section
3.01(b) of the Credit Agreement, with the Assignor and the Assignee
effecting the agreed upon sharing of Letter of Credit Fees through payment
by the Assignee to the Assignor.
ANNEX I
Page 3
9. Notice:
ASSIGNOR:
_____________________
_____________________
_____________________
_____________________
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
_____________________
_____________________
_____________________
_____________________
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions:
ASSIGNOR:
_____________________
_____________________
_____________________
_____________________
Attention:
Reference:
ANNEX I
Page 4
ASSIGNEE:
_____________________
_____________________
_____________________
_____________________
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By_______________________ By______________________
_______________________
______________________
(Print Name and Title) (Print Name and Title)
EXHIBIT O
---------
OFFICER'S SOLVENCY CERTIFICATE
------------------------------
I, the undersigned, the Chief Financial Officer of AUTOTOTE
CORPORATION, a corporation organized and existing under the laws of the State of
Delaware ("Holdings"), do hereby certify on behalf of Holdings that:
1. This Certificate is furnished pursuant to Section 5.13 of the
Credit Agreement, dated as of October 31, 1991, and amended and restated as of
October 30, 1992, and amended and restated as of June 4, 1993, and amended and
restated as of April 28, 1994, and further amended and restated as of January
26, 1996 (such Credit Agreement, as in effect on the date of this Certificate,
being herein called the "Credit Agreement"), among Holdings, Autotote Systems,
Inc. (the "Borrower"), the lenders from time to time party thereto (the "Banks")
and Bankers Trust Company, as Agent. Unless otherwise defined herein,
capitalized terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of each of Holdings
and the Borrower on a stand-alone basis and of Holdings and its
Subsidiaries taken as a whole, would change hands between a willing
buyer and a willing seller, within a commercially reasonable period of
time, each having reasonable knowledge of the relevant facts, with
neither being under any compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing seller
from an independent willing buyer if the assets of each of Holdings
and the Borrower on a stand-alone basis and of Holdings and its
Subsidiaries taken as a whole, are sold with reasonable promptness in
an arm's-length transaction under normal selling conditions for the
sale of comparable business enterprises.
(c) "New Financing"
EXHIBIT O
Page 2
The Indebtedness incurred or to be incurred by Holdings, the Borrower
and their respective Subsidiaries under the Credit Documents (assuming
the full utilization by the Borrower of the Total Revolving Loan
Commitment under the Credit Agreement) and all other financing
contemplated by the Credit Documents, in each case after giving effect
to the transactions occurring on the Restatement Effective Date.
(d) "Stated Liabilities"
The recorded liabilities (including Contingent Liabilities that would
be recorded in accordance with generally accepted accounting
principles consistently applied) of each of Holdings and the Borrower
on a stand-alone basis and of Holdings and its Subsidiaries taken as a
whole, as of January 26, 1996 after giving effect to the consummation
of the transactions occurring on the Restatement Effective Date,
determined in accordance with generally accepted accounting principles
consistently applied, together with the amount of all Obligations.
(e) "Contingent Liabilities"
The maximum estimated amount of liability reasonably likely to result
from pending litigation, asserted claims and assessments, guaranties,
uninsured risks and other contingent liabilities of each of Holdings
and the Borrower on a stand-alone basis and of Holdings and its
Subsidiaries taken as a whole (exclusive of such Contingent
Liabilities to the extent reflected in Stated Liabilities) as
identified and explained in terms of their nature and estimated
magnitude by responsible officers of Holdings, the Borrower or their
respective Subsidiaries.
(f) "Will be able to pay its Stated Liabilities, including Contingent
Liabilities, as they mature."
For the period from the date hereof through the Final Maturity Date,
each of Holdings and the Borrower on a stand-alone basis and Holdings
and its Subsidiaries taken as a whole, will have sufficient assets and
cash flow to pay its Stated Liabilities and Contingent Liabilities as
those liabilities mature or otherwise become due and payable.
(g) "Does not have Unreasonably Small Capital"
EXHIBIT O
Page 3
For the period from the date hereof through the Final Maturity Date,
each of Holdings and the Borrower on a stand-alone basis and Holdings
and its Subsidiaries taken as a whole, after consummation of the
transactions occurring on the Restatement Effective Date and all
Indebtedness (including the Loans) incurred or being incurred or
assumed and Liens created by Holdings, the Borrower and their
respective Subsidiaries in connection therewith, is a going concern
and has sufficient capital to ensure that it will continue to be a
going concern for such period and to remain a going concern.
3. For purposes of this Certificate, I, or officers of Holdings or
the Borrower under my direction and supervision, have performed the following
procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements of Holdings referred to in
Section 7.05(a) of the Credit Agreement.
(b) I have made inquiries of certain officials of each of Holdings, the
Borrower and their respective Subsidiaries who have responsibility for
financial and accounting matters regarding the existence and amount of
Contingent Liabilities associated with the business of Holdings and
its Subsidiaries.
(c) I have reviewed to my satisfaction the Credit Documents, and the
respective Schedules and Exhibits thereto.
(d) With respect to Contingent Liabilities, I:
1. inquired of certain officials of each of Holdings, the Borrower
and their respective Subsidiaries who have responsibility for
legal, financial and accounting matters as to the existence and
estimated liability with respect to all Contingent Liabilities
known to them;
2. confirmed with senior officers of each of Holdings, the Borrower
and their respective Subsidiaries that, to the best of such
officers' knowledge, (i) all appropriate items were included in
Stated Liabilities or Contingent Liabilities made known to me in
the course of my inquiry and that (ii) the amounts relating
thereto were the maximum estimated amount of liability reasonably
likely to result therefrom as of the date hereof;
EXHIBIT O
Page 4
3. I hereby certify that, to the best of my knowledge, all material
Contingent Liabilities that may arise from any pending
litigation, asserted claims and assessments, guarantees,
uninsured risks and other Contingent Liabilities of each of
Holdings, the Borrower and their respective Subsidiaries
(exclusive of such Contingent Liabilities to the extent reflected
in Stated Liabilities) have been considered in making the
certification set forth in paragraph 4 below, and with respect to
each such Contingent Liability the estimable maximum estimated
amount of liability with respect thereto was used in making such
certification.
(e) I have had the Projections, which have been previously delivered to
the Banks, prepared under my direction and have re-examined the
Projections on the date hereof and considered the effect thereon of
any changes since the date of the preparation thereof on the results
projected therein. After such review, I hereby certify that in my
opinion the Projections are reasonable and attainable. Furthermore,
the Projections support the conclusions contained in the last
paragraph of this Certificate.
(f) I have made inquiries of certain officers of Holdings, the Borrower
and their respective Subsidiaries which have responsibility for
financial reporting and accounting matters regarding whether they were
aware of any events or conditions that, as of the date hereof, would
cause any of Holdings or the Borrower on a stand-alone basis or
Holdings and its Subsidiaries taken as a whole, after giving effect to
the consummation of the transactions occurring on the Restatement
Effective Date and the related financing transactions (including the
conversion and/or making of Loans under the Credit Agreement), to (i)
have assets with a Fair Value or Present Fair Salable Value that are
less than the sum of Stated Liabilities and Contingent Liabilities;
(ii) have Unreasonably Small Capital; or (iii) not be able to pay its
Stated Liabilities and Contingent Liabilities as they mature or
otherwise become due.
4. Based on and subject to the foregoing, I hereby certify on behalf
of Holdings that, after giving effect to the consummation of the transactions
occurring on the Restatement Effective Date and the related financing
transactions (including the conversion and/or making of Loans under the Credit
Agreement), it is my informed opinion that (i) the Fair Value and Present Fair
Salable Value of the assets of each of Holdings and the Borrower on a stand-
alone basis and of Holdings and its Subsidiaries taken as a whole,
EXHIBIT 0
Page 5
exceed its Stated Liabilities and Contingent Liabilities; (ii) each of Holdings
and the Borrower on a stand-alone basis and of Holdings and its Subsidiaries
taken as a whole, will not have Unreasonably Small Capital; and (iii) each of
Holdings and the Borrower on a stand-alone basis and of Holdings and its
Subsidiaries taken as a whole, will be able to pay its Stated Liabilities and
Contingent Liabilities as they mature or otherwise become due.
IN WITNESS WHEREOF, Holdings has caused its duly authorized chief
financial officer to execute and deliver this Certificate this 26th day of
January, 1996.
AUTOTOTE CORPORATION
By______________________________
Name:
Title: Chief Financial Officer
