EXHIBIT 10.1
CREDIT AGREEMENT
dated as of December [ ], 2003
among
VOLUME SERVICES AMERICA, INC.,
VOLUME SERVICES AMERICA HOLDINGS, INC.,
CERTAIN FINANCIAL INSTITUTIONS,
as the Lenders,
CIBC WORLD MARKETS CORP.
as Lead Arranger,
KEYBANK NATIONAL ASSOCIATION,
as the Fronting Bank, the Swingline Lender and the Administrative Agent
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$115,000,000 SENIOR SECURED CREDIT FACILITIES
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS..................................................................... 2
SECTION 1.1 Defined Terms............................................................... 2
SECTION 1.2 Terms Generally............................................................. 30
ARTICLE II THE CREDIT FACILITIES........................................................... 30
SECTION 2.1 The Term Notes.............................................................. 30
SECTION 2.2 The Revolving Credit Commitment............................................. 31
SECTION 2.3 The Swingline Loan Commitment............................................... 33
SECTION 2.4 Evidence of Debt; Repayment of Loans and Term Notes......................... 36
SECTION 2.5 Fees........................................................................ 36
SECTION 2.6 Interest on Loans and Term Notes............................................ 38
SECTION 2.7 Alternate Rate of Interest.................................................. 38
SECTION 2.8 Termination and Reduction of Commitments.................................... 38
SECTION 2.9 Voluntary Prepayments....................................................... 39
SECTION 2.10 Mandatory Prepayments....................................................... 39
SECTION 2.11 Reserve Requirements; Change in Circumstances............................... 42
SECTION 2.12 Change in Legality.......................................................... 44
SECTION 2.13 Indemnity................................................................... 45
SECTION 2.14 Pro Rata Treatment.......................................................... 45
SECTION 2.15 Sharing of Setoffs.......................................................... 46
SECTION 2.16 Payments.................................................................... 46
SECTION 2.17 Taxes....................................................................... 47
SECTION 2.18 Letters of Credit Generally................................................. 49
ARTICLE III REPRESENTATIONS AND WARRANTIES.................................................. 56
SECTION 3.1 Organization; Powers........................................................ 56
SECTION 3.2 Authorization............................................................... 56
SECTION 3.3 Enforceability.............................................................. 56
SECTION 3.4 Governmental Approvals...................................................... 57
SECTION 3.5 Financial Statements........................................................ 57
SECTION 3.6 No Material Adverse Change.................................................. 57
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TABLE OF CONTENTS
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SECTION 3.7 Title to Properties; Possession Under Leases................................ 58
SECTION 3.8 Subsidiaries................................................................ 58
SECTION 3.9 Litigation; Compliance with Laws............................................ 58
SECTION 3.10 Compliance with Agreements.................................................. 58
SECTION 3.11 Federal Reserve Regulations................................................. 59
SECTION 3.12 Investment Company; Public Utility Holding Company.......................... 59
SECTION 3.13 Use of Proceeds............................................................. 59
SECTION 3.14 Tax Returns................................................................. 59
SECTION 3.15 No Material Misstatements................................................... 60
SECTION 3.16 Employee Benefit Plans...................................................... 60
SECTION 3.17 Environmental Matters....................................................... 60
SECTION 3.18 Capitalization of Holdings and the Borrower................................. 61
SECTION 3.19 Security Documents.......................................................... 61
SECTION 3.20 Labor Matters............................................................... 63
SECTION 3.21 Insurance................................................................... 63
SECTION 3.22 Solvency.................................................................... 63
SECTION 3.23 Subordinated Debt........................................................... 64
SECTION 3.24 Material Contracts.......................................................... 65
ARTICLE IV CONDITIONS OF LENDING........................................................... 65
SECTION 4.1 All Credit Events........................................................... 66
SECTION 4.2 First Credit Event.......................................................... 66
ARTICLE V AFFIRMATIVE COVENANTS........................................................... 70
SECTION 5.1 Existence; Businesses and Properties........................................ 71
SECTION 5.2 Insurance................................................................... 71
SECTION 5.3 Taxes....................................................................... 71
SECTION 5.4 Financial Statements, Reports, etc.......................................... 72
SECTION 5.5 Litigation, Default and Other Notices....................................... 75
SECTION 5.6 Employee Benefits........................................................... 75
SECTION 5.7 Maintaining Records; Access; Inspections.................................... 76
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TABLE OF CONTENTS
(continued)
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SECTION 5.8 Use of Proceeds............................................................. 76
SECTION 5.9 Compliance with Environmental Laws.......................................... 76
SECTION 5.10 Preparation of Environmental Reports........................................ 76
SECTION 5.11 Additional Guaranties; Security; Further Assurances......................... 77
SECTION 5.12 Fiscal Year; Accounting..................................................... 80
SECTION 5.13 Dividends................................................................... 80
SECTION 5.14 Compliance with Statutes, etc............................................... 80
ARTICLE VI NEGATIVE COVENANTS.............................................................. 81
SECTION 6.1 Indebtedness................................................................ 81
SECTION 6.2 Liens....................................................................... 83
SECTION 6.3 Sale and Lease-Back Transactions............................................ 85
SECTION 6.4 Investments, Loans and Advances............................................. 85
SECTION 6.5 Mergers; Consolidations; Sales of Assets; Acquisitions...................... 86
SECTION 6.6 Sale of Assets.............................................................. 87
SECTION 6.7 Transactions with Affiliates................................................ 87
SECTION 6.8 Business of Holdings and its Subsidiaries................................... 88
SECTION 6.9 Material Agreements; Constituent Documents.................................. 88
SECTION 6.10 Interest Coverage Ratio..................................................... 89
SECTION 6.11 Total Leverage Ratio........................................................ 89
SECTION 6.12 Senior Leverage Ratio....................................................... 90
SECTION 6.13 Capital Stock............................................................... 90
SECTION 6.14 Foreign Revenues............................................................ 91
SECTION 6.15 Limitations with respect to Capital Expenditures............................ 91
SECTION 6.16 Dividends and Distributions................................................. 91
SECTION 6.17 Holdings' Use of Distributions from Borrower................................ 93
SECTION 6.18 Deferral of Subordinated Note Interest...................................... 93
SECTION 6.19 Suspension of Dividend Payments on Holdings Capital Stock................... 95
SECTION 6.20 Dividend/CapEx Funding Account, CapEx Funding Account, Cash
Collateral Account and Existing Subordinated Notes Cash Collateral Account.. 97
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TABLE OF CONTENTS
(continued)
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SECTION 6.21 Subordinated Debt. (i) Fail to give notice to the trustee under the Existing
Subordinated Notes Indenture on or prior to December 31, 2003 that the
Borrower will redeem all Existing Subordinated
Notes on Xxxxx 0, 0000, (xx) fail to mail, or............................... 97
ARTICLE VII EVENTS OF DEFAULT............................................................... 98
ARTICLE VIII THE AGENTS...................................................................... 101
ARTICLE IX MISCELLANEOUS................................................................... 104
SECTION 9.1 Notices..................................................................... 104
SECTION 9.2 Survival of Agreement....................................................... 104
SECTION 9.3 Binding Effect.............................................................. 104
SECTION 9.4 Successors and Assigns...................................................... 105
SECTION 9.5 Expenses; Indemnity......................................................... 108
SECTION 9.6 Right of Setoff............................................................. 109
SECTION 9.7 APPLICABLE LAW.............................................................. 109
SECTION 9.8 Waivers; Amendment.......................................................... 110
SECTION 9.9 Interest Rate Limitation.................................................... 111
SECTION 9.10 Entire Agreement............................................................ 111
SECTION 9.11 WAIVER OF JURY TRIAL........................................................ 111
SECTION 9.12 Severability................................................................ 111
SECTION 9.13 Counterparts................................................................ 112
SECTION 9.14 Headings.................................................................... 112
SECTION 9.15 Jurisdiction; Consent to Service of Process................................. 112
SECTION 9.16 Confidentiality............................................................. 112
SECTION 9.17 Release of Liens and Guarantees............................................. 113
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CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of December [ ], 2003 (this
"Agreement"), is entered into by and among VOLUME SERVICES AMERICA, INC., a
Delaware corporation (the "Borrower"), VOLUME SERVICES AMERICA HOLDINGS, INC., a
Delaware corporation ("Holdings"), CERTAIN FINANCIAL INSTITUTIONS, as the
Lenders (as defined herein), CIBC WORLD MARKETS CORP., as Lead Arranger (in such
capacity, the "Lead Arranger"), KEYBANK NATIONAL ASSOCIATION ("KeyBank"), as the
Fronting Bank (together with its permitted successors in such capacity, the
"Fronting Bank"), as the Swingline Lender (as defined herein), and the
Administrative Agent (together with its permitted successors in such capacity,
the "Administrative Agent").
RECITALS:
WHEREAS, the Borrower is a direct, wholly-owned subsidiary of
Holdings; and
WHEREAS, Holdings has commenced the initial public offering
(the "Offering") of [$ ] Income Deposit Securities (the "IDSs"), each unit of
which consists of one share of common stock of Holdings (any shares of common
stock of the class issued in the Offering, the "Holdings Common Stock") and a
portion of the [$ ] aggregate principal amount of subordinated notes issued
by Holdings (as the same may be amended, and including subordinated notes issued
in respect of capitalized interest and interest paid-in-kind, the "Holdings
Subordinated Notes") pursuant to that certain Prospectus dated as of November [
], 2003 (the "Prospectus"); and
WHEREAS, the Prospectus contemplates, inter alia, (a) the
application of a portion of the proceeds of the Offering to the repayment of the
Prior Credit Agreement (defined below) and (b) the execution and delivery of
this Agreement and the related Loan Documents (defined below); and
WHEREAS, pursuant to the Loan Documents, the Lenders have
agreed to extend to the Borrower certain senior secured credit facilities in an
aggregate principal amount not to exceed $115,000,000, the proceeds of which
will be used to refinance certain existing indebtedness of the Borrower
(including the Prior Credit Agreement), to pay fees and expenses related to the
Offering and the other transactions contemplated by the Prospectus
(collectively, the "Transactions") and for working capital and other general
corporate purposes of Holdings, the Borrower and their respective Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Holdings, the Borrower,
the Lenders, the Lead Arranger, the Fronting Bank, the Administrative Agent and
the Swingline Lender agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Revolving Loan or Swingline
Loan.
"ABR Revolving Loan" shall mean any Revolving Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Section 2.2.
"Additional Security Documents" shall have the meaning given
to such term in Section 5.11(b)(i).
"Adjusted EBITDA" shall mean, for any Fiscal Period, (a)
EBITDA for such Fiscal Period plus (b) the Non-Cash Items for such Fiscal Period
plus (c) interest expense on the Existing Subordinated Notes, if any, accruing
during such Fiscal Period but no later than March 1, 2004. For the purposes of
determining Adjusted EBITDA with respect to any portion of any Fiscal Period
that falls prior to the Closing Date, the applicable Pre-Closing Levels shall be
utilized.
"Adjusted LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the product of
(a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent" shall have the meaning given to such
term in the preamble hereto.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A delivered by a Lender to the
Administrative Agent.
"Affiliate" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
Person specified (it being understood any two or more investment funds that
invest in commercial loans and that are managed or advised by the same
investment advisor or by an Affiliate of such investment advisor shall be deemed
Affiliates).
"Agent Fees" shall have the meaning given to such term in
Section 2.5(c).
"Agreement" shall have the meaning given to such term in the
preamble hereto.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect
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on such day and (b) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate, including the failure of
the Federal Reserve Bank of New York to publish rates or the inability of the
Administrative Agent to obtain quotations in accordance with the terms thereof,
the Alternate Base Rate shall be determined without regard to clause (b) of the
preceding sentence until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Amortization" shall mean, for any Fiscal Period, amortization
of Holdings and its Subsidiaries for such Fiscal Period measured on a
consolidated basis in accordance with U.S. GAAP.
"Annual Clean-Up" shall have the meaning given to such term in
Section 2.10(j).
"Annual Excess Cash Flow" shall mean, for each Annual Fiscal
Period, based on the audited financial statements of Holdings delivered pursuant
to Section 5.4(c), (a) Adjusted EBITDA for such Annual Fiscal Period, less (b)
the sum of (i) Cash Interest Expense on all Indebtedness for such Annual Fiscal
Period, (ii) principal payments (if any) required or made with respect to the
Senior Indebtedness during such Annual Fiscal Period, (iii) Capital Expenditures
paid in cash during such Annual Fiscal Period (other than Capital Expenditures
made with Asset Sale Proceeds, funds from the Dividend/CapEx Funding Account and
the CapEx Funding Account, the Equity Offering Proceeds from the issuance of
IDSs to the extent not required to be applied to prepay the Obligations under
Section 2.10, and repayments of loans or returns of capital under Service
Contracts), (iv) Tax Provisions paid in cash during such Annual Fiscal Period,
(v) any increase in the outstanding principal amount of Revolving Loans and
Swingline Loans from the first day of such Annual Fiscal Period to the last day
of such Annual Fiscal Period and (vi) Distributions paid in cash to Persons that
are not Loan Parties during such Fiscal Period to the extent permitted under
Section 6.18.
"Annual Fiscal Period" shall have the meaning given to such
term in Section 3.5(c).
"Applicable Margin" shall mean (i) from the Closing Date until
delivery of financial statements for the Monthly Fiscal Period ending on or
about December 31, 2003, (a) 2.50% per annum for Revolving Loans that are ABR
Loans and for Swingline Loans and (b) 3.50% per annum for Revolving Loans that
are Eurodollar Loans, and (ii) thereafter, a percentage per annum, determined by
reference to the Total Leverage Ratio in effect from time to time, as set forth
below:
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Total Leverage Ratio ABR Loans Eurodollar Loans
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At or above 3.50 to 1.00 2.50% 3.50%
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Below 3.50 to 1.00 and 2.25% 3.25%
at or above 3.00 to 1.00
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Below 3.00 to 1.00 and 2.00% 3.00%
at or above 2.00 to 1.00
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Below 2.00 to 1.00 1.75% 2.75%
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provided, (a) no change in the Applicable Margin shall be effective until three
Business Days after the date on which Administrative Agent receives the monthly
financial statements and the Monthly Report pursuant to Section 5.4(a)
calculating the Total Leverage Ratio, and (b) for so long (but only for so long)
as Borrower has not submitted to Administrative Agent the information described
in the foregoing clause (a) when required under Section 5.4(a), the Applicable
Margin shall be determined as if the Total Leverage Ratio then in effect was
greater than 3.50 to 1.00.
"Applicable Percentage" of any Revolving Credit Lender at any
time shall mean the percentage of the Total Revolving Credit Commitment
represented by such Lender's Revolving Credit Commitment. In the event the
Revolving Credit Commitments shall have expired or been terminated, the
Applicable Percentages shall be determined on the basis of the Revolving Credit
Commitments most recently in effect, but giving effect to any assignments
pursuant to Section 9.4.
"Arranger" shall have the meaning given to such term in the
preamble hereto.
"Asset Sale Proceeds" shall mean cash proceeds actually
received by any Loan Party or any Subsidiary from any Disposition (including any
sale and leaseback of assets and any mortgage or lease of real property) to any
Person of any asset of such Loan Party or Subsidiary (including any cash
payments received by way of deferred payment of principal pursuant to a note or
installment receivable, purchase price adjustment receivable or otherwise, and
cash available to a Loan Party or Subsidiary upon any release of funds from
previously established reserves), net of (x) attorneys' fees, accountants' fees,
investment banking fees, survey costs, title insurance premiums, and related
search and recording charges, transfer taxes, deed or mortgage recording taxes,
required payments on Indebtedness (other than Indebtedness incurred under the
Loan Documents), and other reasonable fees, expenses and reserves (including
brokerage and consultant fees) and (y) taxes paid or payable as a result thereof
(including withholding taxes incurred in connection with cross-border
transactions, if applicable, and taxes estimated by the Borrower to be payable
as a result thereof or as a result of such transactions),
4
excluding cash proceeds from (i) Dispositions permitted under Sections 6.5 and
6.6 and (ii) Dispositions of assets with respect to which such parties do not
hold title pursuant to a Service Contract, where the asset in question was
obtained for the customer's exclusive use pursuant to such Service Contract;
provided that if the Borrower shall deliver a certificate of a Responsible
Officer to the Administrative Agent promptly following receipt of any such
proceeds setting forth the Borrower's intention to use, or to cause the
applicable Loan Party or Subsidiary to use, any portion of such proceeds to (A)
purchase assets useful in the business of the Borrower and the Subsidiaries or
(B) fund Consolidated Service Contract Capital Expenditures within 12 months of
such receipt, such portion of such proceeds shall not constitute Asset Sale
Proceeds except to the extent not so used within such 12-month period; provided,
further that once the aggregate amount of all such proceeds received after the
Closing Date exceeds $5,000,000, no such additional proceeds shall constitute
Asset Sale Proceeds until such additional proceeds aggregate to $1,000,000. For
purposes of calculating "Asset Sale Proceeds", all fees, commissions and other
costs and expenses payable to Holdings, the Borrower or any Affiliates of any of
them shall be disregarded, other than such fees, commissions and other costs and
expenses paid to Affiliates (excluding Holdings, the Borrower or any Subsidiary)
on terms that are no less favorable to Holdings, the Borrower or any Subsidiary
than would be obtained in a comparable arm's-length transaction with a Person
that was not an Affiliate.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent and the Borrower (if required), in the form of Exhibit B or
such other form as shall be approved by the Administrative Agent.
"Available Cash" shall mean, for any Monthly Fiscal Period,
(a) Adjusted EBITDA for the twelve Monthly Fiscal Periods ending with such
Monthly Fiscal Period, less (b) the sum of (i) Cash Interest Expense related to
the Senior Indebtedness, (ii) principal payments (if any) required or made with
respect to the Senior Indebtedness, (iii) Capital Expenditures made in cash
(other than Capital Expenditures made with Asset Sale Proceeds, proceeds of
asset sales described in the first proviso of the definition of "Asset Sale
Proceeds", Insurance Proceeds, funds from the Dividend/CapEx Funding Account and
the CapEx Funding Account, the Equity Offering Proceeds from the issuance of
IDSs to the extent not required to be applied to prepay the Obligations under
Section 2.10, equity issuance proceeds described in clause (b) of the first
parenthetical phrase of the definition of "Equity Offering Proceeds", and
repayments of loans or returns of capital under Service Contracts), (iv) Tax
Provisions and (v) Holdings Administrative Expenses, in each case for the twelve
Monthly Fiscal Periods ending with such Monthly Fiscal Period, divided by (c)
12. For the purposes of determining Available Cash for each Monthly Fiscal
Period ending prior to the first anniversary hereof, (x) the components of
Available Cash described in clause (a) and (b) above for that portion of the
referenced twelve Monthly Fiscal Periods that falls prior to the Closing Date
shall be determined by reference to the applicable Pre-Closing Level for
Available Cash, and (y) the components of Available Cash described in clause (a)
and (b) above for that portion of the referenced twelve Monthly Fiscal Periods
that falls on or after the Closing Date shall be determined by measuring
Adjusted EBITDA and the components of Available Cash deducted from Adjusted
EBITDA in clause (b) above from the Closing Date to the last day of such twelve
Monthly Fiscal Periods.
"Blackstone" shall mean The Blackstone Group L.P. and its
successors.
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"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrower" shall have the meaning given to such term in the
preamble hereto.
"Borrower Intercompany Indebtedness" shall have the meaning
given to such term in Section 3.18.
"Borrower Intercompany Subordination Agreement" shall mean
that certain Subordination Agreement dated as of December __, 2003 by and among
Holdings, the Borrower and the Administrative Agent, substantially in the form
of Exhibit C.
"Borrowing" shall mean (i) a group of Loans of a single Type
or consisting solely of Revolving Loans or Swingline Loans and made on a single
date and, in the case of Eurodollar Loans, as to which a single Interest Period
is in effect or (i) the Term Notes as a group, as the case may be.
"Borrowing Request" shall mean a request by the Borrower in
accordance with the terms of Section 2.2(h) with respect to Revolving Credit
Loans in substantially the form of Exhibit D-1 and with respect to Letters of
Credit in substantially the form of Exhibit D-2.
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which banks in New York City are authorized or required by law
to close; provided, however, that when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capex Funding Account" shall mean a segregated deposit
account established by the Borrower with the Administrative Agent in which the
Administrative Agent has a first priority perfected security interest on behalf
of the Lenders pursuant to a Control Agreement from which funds may be deposited
and withdrawn in accordance with Section 2.22.
"Capital Expenditures" shall mean, for any Person, without
duplication, (a) all expenditures incurred by such Person that, in accordance
with U.S. GAAP, are or should be included in "purchase of property and
equipment", "purchase of location contract rights" or similar items reflected in
the statement of cash flows of such Person, (b) all expenditures by such Person
to acquire by purchase or otherwise the business or fixed assets of, or stock or
other evidence of beneficial ownership of, any other Person, (c) capital,
routine maintenance and repair costs incurred in connection with the
negotiation, implementation, maintenance and repairs required with respect to
any Service Contract, (d) amounts expended to purchase or redeem the Capital
Stock of a minority shareholder of a Non-Wholly-Owned Subsidiary or an equity
holder in any joint venture, including amounts expended as consideration in a
merger or consolidation of a Non-Wholly-Owned Subsidiary or joint venture, and
(e) any loans to customers made in connection with Service Contracts; provided,
however, that Capital Expenditures for the Borrower and the Subsidiaries shall
not include (i) expenditures of proceeds of insurance settlements, condemnation
awards and other settlements in respect of lost, destroyed, damaged or condemned
assets, equipment or other property to the extent such expenditures are made to
replace or repair such lost, destroyed, damaged or condemned assets, equipment
or other
6
property or otherwise to acquire assets or properties useful in the business of
the Borrower and the Subsidiaries within 12 months of receipt of such proceeds,
(ii) expenditures that are accounted for as capital expenditures of such Person
and that actually are paid for by a third party (excluding Holdings, the
Borrower or any of the Borrower's Subsidiaries) and for which neither Holdings,
the Borrower or any of the Borrower's Subsidiaries has provided or is required
to provide or incur, directly or indirectly, any cash payment obligation to such
third party or any other person (whether before, during or after such period),
and (iii) expenditures by a Loan Party to acquire assets or stock of a Person
that is a Loan Party prior to such expenditure.
"Capital Lease Obligations" of any Person shall mean the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under U.S.
GAAP and, for purposes hereof, the amount of such obligations at any time shall
be the capitalized amount thereof at such time determined in accordance with
U.S. GAAP.
"Capital Stock" of any Person shall mean any and all shares,
interests, rights to purchase, warrants, options, participation or other
equivalents of or interests in (however designated) equity of such Person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest, including the IDSs with
respect to Holdings, but excluding any debt securities convertible into such
equity.
"Cash Collateral Account" shall mean the segregated deposit
account established by the Borrower with the Administrative Agent in which the
Administrative Agent has full control and dominion and a first priority
perfected security interest, which account shall be subject to the terms of the
Cash Collateral Agreement.
"Cash Collateral Agreement" shall mean that certain Cash
Collateral Agreement, dated as of the Closing Date, between the Borrower and the
Administrative Agent, governing the Cash Collateral Account.
"Cash Collateral Minimum Balance" shall mean, as of any date,
an amount equal to the sum of (i) five months of interest on the Holdings
Subordinated Notes outstanding at such time, plus (ii) $2,500,000, plus (iii)
the product of (A) [$60,000] multiplied by (B) the number of full or partial
Monthly Fiscal Periods elapsed since the first anniversary of the Closing Date,
excluding the Monthly Fiscal Period in which the first anniversary of the
Closing Date occurs.
"Cash Collateral Shortfall Amount" shall mean, at any time, an
amount, if any, by which the Cash Collateral Minimum Balance exceeds the
aggregate amount of immediately available funds in the Cash Collateral Account
at such time.
"Cash Interest Expense" shall mean, without duplication, cash
interest payments made in respect of the Indebtedness outstanding under the Loan
Documents, the Holdings Subordinated Notes, and other permitted Indebtedness,
including, without limitation, cash payments in respect of Deferred Subordinated
Note Interest and interest thereon, such amounts to be net of any interest
income (after giving effect to any interest rate xxxxxx), but excluding (i) the
amount of the Deferred Subordinated Note Interest that has accrued on or prior
to the date of
7
determination and not been paid in cash and (ii) any interest that has accrued
on the Existing Subordinated Notes during such Fiscal Period on or prior to
March 1, 2004. For the purposes of determining Cash Interest Expense with
respect to any portion of any Fiscal Period that falls prior to the Closing
Date, the applicable Pre-Closing Levels shall be utilized.
"CERCLA" shall have the meaning given such term in the
definition of "Environmental Law".
"Change of Control" shall mean the occurrence of any of the
following events:
(i) the sale, lease or transfer, in one or a series of
related transactions, of all or substantially all of the assets of
Holdings or the Borrower to any Person or group (as such term is used
in Section 13(d)(3) of the Exchange Act);
(ii) the adoption of a plan relating to the liquidation or
dissolution of Holdings or the Borrower;
(iii) the acquisition by any Person or group (as such term
in used in Section 13(d)(3) of the Exchange Act) of a direct or
indirect interest in more than 30% of the ownership of Holdings, or the
voting power of the Capital Stock of Holdings, by way of purchase,
merger or consolidation or otherwise (other than a creation of a
holding company that does not involve a change in the beneficial
ownership of Holdings as a result of such transaction);
(iv) the first day on which a majority of the members of
the Board of Directors of Holdings are not Continuing Directors; or
(v) Holdings ceases to own and control, beneficially and
of record, 100% of the issued and outstanding shares of Capital Stock
of the Borrower.
"Closing Costs" shall mean the reasonable transaction costs
incurred by each of Holdings and the Borrower in connection with the Offering
and the related Transactions (including, without limitation, any tax charges).
"Closing Date" shall mean the date on which the initial Credit
Event occurs hereunder.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall mean all real and personal property of the
Loan Parties pledged to the Administrative Agent from time to time pursuant to
the Security Documents.
"Commitments" shall mean (a) with respect to any Lender, such
Lender's Revolving Credit Commitment, (b) with respect to any Swingline Lender,
its Swingline Loan Commitment and (c) with respect to any Fronting Bank, its
Letter of Credit Commitment.
"Commitment Fee" shall have the meaning given to such term in
Section 2.5(a).
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"Consolidated Service Contract Capital Expenditures" shall
mean Capital Expenditures made by Holdings, the Borrower and the Subsidiaries on
a consolidated basis with respect to the negotiation, implementation, extension,
renewal, amendment or replacement of, or pursuant to any terms of, any Service
Contract, including, without limitation, advances and loans made by any of
Holdings, the Borrower or the Subsidiaries pursuant to such Service Contracts.
"Continuing Directors" shall mean, as of any date of
determination, any member of the Board of Directors of Holdings who (a) was a
member of such Board of Directors as of the Closing Date, or (b) was nominated
for election or elected to such Board of Directors with the affirmative vote of
at least a majority of the members of such Board of Directors as of the date of
the nomination or election.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Control Agreement" shall mean each agreement among a Loan
Party, the Administrative Agent and (a) a bank at which such Loan Party
maintains deposit accounts, (b) the issuer of uncertificated securities with
respect to uncertificated securities in the name of any Loan Party that are not
held in a securities account in the name of any Loan Party, (c) a securities
intermediary with respect to securities, whether certificated or uncertificated,
securities entitlements and other financial assets held in a securities account
in the name of any Loan Party, or (d) a futures commission merchant or clearing
house, as applicable, with respect to commodity accounts and commodity contracts
held by any Loan Party, in each case granting "control" over such assets to the
Administrative Agent in a manner that perfects the Lien of the Administrative
Agent under the UCC, in the form and substance reasonably acceptable to the
Required Lenders.
"Covered Taxes" shall have the meaning given to such term in
Section 2.17(a).
"Credit Event" shall have the meaning given to such term in
Article IV.
"Debt Offering Proceeds" shall mean cash proceeds actually
received by a Loan Party from the incurrence, issuance or sale by any Loan Party
or any Subsidiary of any Indebtedness (other than Indebtedness permitted
pursuant to Section 6.1), net of all taxes (including withholding taxes incurred
in connection with cross-border transactions, if applicable, and including taxes
estimated by the Borrower to be payable as a result thereof or as a result of
such transactions) and fees (including investment banking fees), commissions,
costs and other expenses incurred in connection with such issuance or sale. For
purposes of calculating "Debt Offering Proceeds", all fees, commissions and
other costs and expenses payable to Holdings, the Borrower or any Affiliate of
any of them shall be disregarded, other than such fees, commissions and other
costs and expenses paid to Affiliates (excluding Holdings, the Borrower or any
Subsidiary) on terms that are no less favorable to Holdings, the Borrower or any
Subsidiary than would be obtained in a comparable arm's-length transaction with
a Person that was not an Affiliate.
9
"Default" shall mean any event or condition which upon notice,
lapse of time or both would constitute an Event of Default.
"Default Rate" shall have the meaning given to such term in
Section 2.6(e).
"Deferred Subordinated Note Interest" shall mean, at any time,
all interest accrued on the Holdings Subordinated Notes, the payment of which
has been deferred pursuant to the terms of this Agreement or otherwise, to the
extent remaining unpaid, together with all interest on such interest, the
payment of which has also been deferred pursuant to the terms of this Agreement,
in each case to the extent remaining unpaid.
"Depreciation" shall mean, for any Fiscal Period,
depreciation of Holdings and its Subsidiaries for such Fiscal Period measured on
a consolidated basis in accordance with U.S. GAAP.
"Discounted Value" shall mean, with respect to the Prepaid
Principal of any Term Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Prepaid Principal from their respective
scheduled due dates to the Settlement Date with respect to such Prepaid
Principal, in accordance with accepted financial practice and at a discount
factor (as converted to reflect the monthly basis on which interest on the Term
Notes is payable) equal to the Reinvestment Yield with respect to such Prepaid
Principal.
"Disposition" shall have the meaning given to such term in
Section 6.6.
"Distributable Cash" shall mean, for any Monthly Fiscal
Period, (a) Available Cash for such Monthly Fiscal Period less (b) Cash Interest
Expense with respect to the Holdings Subordinated Notes and Deferred
Subordinated Note Interest during such Monthly Fiscal Period (excluding the
payment of Deferred Subordinated Note Interest in cash from funds in the
Dividend/CapEx Funding Account and, to the extent permitted in Section 2.22,
from funds in the CapEx Funding Account).
"Distribution" shall mean, with respect to Holdings or any of
its Subsidiaries, (i) any Dividend by such Person and (ii) any payment by such
Person on account of any Indebtedness that is subordinated in right of payment
to the Obligations, including without limitation the Borrower Intercompany
Indebtedness, Holdings Subordinated Notes, Deferred Subordinated Note Interest
and Guarantees thereof.
"Dividend" shall mean, with respect to any Person, any
dividend, distribution or return on any equity capital paid in cash or any other
property (excluding common equity of such Person) to the stockholders, partners
or members of such Person as such, or any redemption, retirement, purchase or
other acquisition of any shares of any class of its Capital Stock, any
partnership or membership interests or other equity interests, or any options or
warrants issued by such Person with respect to its Capital Stock or other equity
interests of such Person, or the setting aside of any funds for any of the
foregoing purposes (other than the contribution of funds to the Dividend/CapEx
Funding Account or the CapEx Funding Account). 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
10
incentive or achievement plans or any similar plans or setting aside of any
funds for the foregoing purposes.
"Dividend/Capex Funding Account" shall mean a segregated
deposit account established by the Borrower with the Administrative Agent in
which the Administrative Agent has a first priority perfected security interest
on behalf of the Lenders pursuant to a Control Agreement from which funds may be
withdrawn in accordance with Section 2.20.
"Dividend Payment Amount" shall mean, for any Dividend Payment
Date, the sum of (a) Distributable Cash for such Monthly Fiscal Period for the
most recently ended Monthly Fiscal period for which a Monthly Report has been
delivered, plus (b) amounts removed from the Dividend/CapEx Funding Account or,
to the extent permitted by Section 2.22, the CapEx Funding Account by the
Borrower no more than one Business Day prior to the Dividend Payment Date to
distribute as Dividends not to exceed the Dividend Shortfall Amount for the most
recently ended Monthly Fiscal Period for which a Monthly Report has been
delivered less (c) the Cash Collateral Shortfall Amount on the Dividend Payment
Date.
"Dividend Payment Date" shall mean the [15]th day of each
calendar month commencing as of such date in the second full calendar month
after the Closing Date.
"Dividend Shortfall Amount" shall mean, for any Monthly Fiscal
Period, the amount, if any, by which the Projected Distributable Cash for such
Monthly Fiscal Period exceeds actual Distributable Cash for such Monthly Fiscal
Period.
"Dividend Suspension Period" shall mean any period during
which the payment of Dividends is suspended in accordance with Section 6.19.
"Dollars" or "$" shall mean lawful money of the United States
of America.
"Domestic Subsidiary" shall mean each Subsidiary that is
organized, formed or incorporated in the United States of America or any State
thereof.
"EBITDA" shall mean, for any Fiscal Period, consolidated net
income (or loss), as the case may be, of Holdings and its Subsidiaries
determined on a consolidated basis in accordance with U.S. GAAP for such Fiscal
Period, and adding back to the extent deducted in determining such consolidated
net income (or loss) for such Fiscal Period: (a) Interest Expense, (b)
Depreciation, (c) Amortization, (d) Closing Costs in an amount not to exceed
$3,000,000 and (e) Tax Provisions, in each case for such Fiscal Period. For the
purposes of determining EBITDA with respect to any portion of the referenced
Fiscal Period that falls prior to the Closing Date, the applicable Pre-Closing
Levels shall be utilized.
"Environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, the workplace or as otherwise defined in any
Environmental Law.
"Environmental Claim" shall mean any written accusation,
allegation, notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Governmental Authority
or any Person for damages, injunctive or equitable relief,
11
personal injury (including sickness, disease or death), Remedial Action costs,
tangible or intangible property damage, natural resource damages, nuisance,
pollution, any adverse effect on the environment caused by any Hazardous
Material, or for fines, penalties or restrictions, resulting from or based upon:
(a) the threat, the existence, or the continuation of the existence of a Release
(including sudden or non-sudden, accidental or non-accidental Releases); (b)
exposure to any Hazardous Material; (c) the presence, use, handling,
transportation, storage, treatment or disposal of any Hazardous Material; or (d)
the violation or alleged violation of any Environmental Law or Environmental
Permit.
"Environmental Law" shall mean any and all applicable present
and future treaties, laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the protection of the environment, preservation or reclamation of natural
resources, the treatment, storage, disposal, Release or threatened Release of
any Hazardous Material or to human health or safety (in either case as relating
to the environment), including the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801 et seq., the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. Sections 9601 et seq. ("CERCLA"), the
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C.
Sections 6901, et seq., the Federal Water Pollution Control Act, as amended, 33
U.S.C. Sections 1251 et seq., the Clean Air Act of 1970, as amended, 42 U.S.C.
Sections 7401 et seq., the Toxic Substances Control Act of 1976, 15 U.S.C.
Sections 2601 et seq., the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Sections 11001 et seq., the National Environmental Policy Act of
1975, 42 U.S.C. Sections 4321 et seq., the Safe Drinking Water Act of 1974, as
amended, 42 U.S.C. Sections 300(f) et seq., and any similar or implementing
state or foreign law, and all amendments or regulations promulgated thereunder.
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Governmental Authority pursuant to any Environmental Law.
"Equity Offering Proceeds" shall mean cash proceeds actually
received by a Loan Party or any Subsidiary from the issuance of any IDSs or any
other equity security in consideration for the infusion of capital (other than
proceeds from the sale of (a) Capital Stock of Holdings to directors, officers
or employees of Holdings, the Borrower or any Subsidiary in connection with
permitted employee compensation, stock option and incentive arrangements, (b)
Capital Stock of Holdings used to finance investments permitted under Sections
6.4(k), 6.5(a) and 6.15, (c) IDSs on the Closing Date and (d) Capital Stock
issued to any Loan Party), net of all taxes and fees (including investment
banking fees), commissions, costs and other expenses incurred in connection with
such issuance or sale. For purposes of calculating "Equity Offering Proceeds",
all fees, commissions and other costs and expenses payable to Holdings, the
Borrower or any Affiliate of any of them shall be disregarded, other than such
fees, commissions and other costs and expenses paid to Affiliates (excluding
Holdings, the Borrower or any Subsidiary) on terms that are no less favorable to
Holdings, the Borrower or any Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person that was not an Affiliate.
12
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.(1)
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning given such term in
Article VII.
"Excess Exposure Amount" shall have the meaning specified in
Section 2.18(l).
"Exchange Rate" shall have the meaning specified in Section
2.18(l).
"Existing Subordinated Note Documents" shall mean the Existing
Subordinated Notes Indenture and all Existing Subordinated Notes issued pursuant
thereto.
"Existing Subordinated Notes" shall mean the Borrower's 11
1/4% Senior Subordinated Notes Due 2009 issued pursuant to the Existing
Subordinated Notes Indenture.
"Existing Subordinated Notes Cash Collateral Account" shall
mean the segregated deposit account established by the Borrower with the
Administrative Agent in which the Administrative Agent has full control and
dominion and a first priority perfected security interest, which account shall
be subject to the terms of the Existing Subordinated Notes Cash Collateral
Agreement.
"Existing Subordinated Notes Cash Collateral Agreement" shall
mean that certain Cash Collateral Agreement, dated as of the Closing Date,
between the Borrower and the Administrative Agent, governing the Existing
Subordinated Notes Cash Collateral Account.
"Existing Subordinated Notes Indenture" shall mean that
certain Indenture, dated as of March 4, 1999, among the Borrower, Holdings,
certain Subsidiaries of Holdings and Xxxxx Fargo Bank Minnesota, N.A., as
successor to Norwest Bank Minnesota, National Association, as trustee.
"Facility" shall mean the Revolving Credit Commitments or the
Term Notes, as the case may be.
--------
(1) All ERISA definitions, representations, covenants and other provisions
remain subject to comment.
13
"Federal Funds Effective Rate" shall mean, for any day, 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 on the next succeeding 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 the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fees" shall mean the Commitment Fees, the L/C Participation
Fees, the Fronting Bank Fees and the Agent Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer, Assistant Treasurer
or Controller of such corporation.
"First Tier Foreign Subsidiary" shall mean any Foreign
Subsidiary owned directly by Holdings or the Domestic Subsidiaries.
"Fiscal Period" shall have the meaning given to such term in
Section 3.5(c).
"Foreign Subsidiary" shall mean each Subsidiary that is not a
Domestic Subsidiary.
"Fronting Bank" shall have the meaning given to such term in
the preamble hereto.
"Fronting Bank Fees" shall have the meaning given to such term
in Section 2.5(b).
"GAAP" shall mean generally accepted accounting principles in
effect from time to time in the United States or, when reference is made to
another jurisdiction, generally accepted accounting principles in such
jurisdiction applied on a consistent basis.
"GECC" shall mean General Electric Capital Corporation.
"Governmental Authority" shall mean any federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantee" of or by any Person shall mean (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay or
otherwise) or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness, (ii) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or (iv) entered into for the purpose of assuring in any other
14
manner the holders of such Indebtedness of the payment thereof or to protect
such holders against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such Person securing any Indebtedness of any other Person,
whether or not such Indebtedness is assumed by such Person; provided, however,
that the term "Guarantee" shall not include (i) endorsements for collection or
deposit, in either case in the ordinary course of business, or customary and
reasonable indemnity obligations in effect on the Closing Date or entered into
in connection with any acquisition or disposition of assets permitted under this
Agreement or (ii) reasonable and customary indemnity obligations arising under
Service Contracts in the ordinary course of business.
"Guarantee Agreements" shall mean the Holdings Guarantee
Agreement and the Subsidiary Guarantee Agreement.
"Guarantors" shall mean Holdings and the Subsidiary
Guarantors.
"Hazardous Materials" shall mean any material meeting the
definition of a "hazardous substance" in CERCLA 42 U.S.C. Section 9601(14) and
all explosive or radioactive substances or wastes, toxic substances or wastes,
pollutants, solid, liquid or gaseous wastes, including petroleum, petroleum
distillates or fractions or residues, asbestos or asbestos-containing materials,
polychlorinated biphenyls ("PCBs") or materials or equipment containing PCBs,
radon gas, infectious or medical wastes and all other substances or wastes of
any nature regulated pursuant to any Environmental Law, or that reasonably could
form the basis of an Environmental Claim.
"Holdings" shall have the meaning given to such term in the
preamble hereto.
"Holdings Administrative Expenses" shall mean the legal,
accounting, reporting, overhead and other administrative costs and expenses
incurred by Holdings (excluding those incurred in connection with the closing of
the Transactions).
"Holdings Common Stock" shall have the meaning given to such
term in the preamble hereto.
"Holdings Guarantee Agreement" shall mean the Holdings
Guarantee Agreement, substantially in the form of Exhibit E, made by Holdings in
favor of the Administrative Agent for the benefit of the Secured Parties.
"Holdings Subordinated Notes" shall have the meaning given to
such term in the preamble hereto.
"IDSs" shall have the meaning given to such term in the
preamble hereto.
"Indenture Trustee" shall mean The Bank of New York in its
capacity as trustee for the holders of the Holdings Subordinated Notes, together
with its successors in such capacity.
"Indebtedness" of any Person shall mean, without duplication,
(a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (c) all
15
obligations of such Person upon which interest charges are customarily paid
(other than trade payables incurred in the ordinary course of business), (d) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (e) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services (other than trade liabilities incurred and outstanding in
the ordinary course of business), (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the obligations secured thereby have been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all payments that such Person would have to make
in the event of an early termination, on the date Indebtedness of such Person is
being determined, in respect of outstanding interest rate protection agreements,
foreign currency exchange agreements or other interest or exchange rate hedging
arrangements and (j) all obligations of such Person as an account party in
respect of letters of credit and bankers' acceptances. The Indebtedness of any
Person shall include the Indebtedness of any partnership in which such Person is
a general partner, other than to the extent that the instrument or agreement
evidencing such Indebtedness expressly limits the liability of such Person in
respect thereof; provided that, if the sole asset of such Person is its general
partnership interest in such partnership, the amount of such Indebtedness shall
be deemed equal to the value of such general partnership interest and the amount
of any Indebtedness in respect of any Guarantee of such partnership Indebtedness
shall be limited to the same extent as such Guarantee may be limited.
Indebtedness shall not include any (i) obligation of the Borrower or any of the
Subsidiaries to make minimum payments or to provide minimum or guaranteed
commissions under any Service Contract or (ii) other reasonable and customary
indemnity obligations.
"Insurance Proceeds" shall mean the cash proceeds actually
received by any Loan Party or any Subsidiary, including without limitation
casualty insurance proceeds, insurance settlements, condemnation awards and
other settlements, with respect to any loss, damage, destruction or condemnation
of assets owned by such Loan Party or such Subsidiary (excluding assets with
respect to which such parties do not hold title pursuant to a Service Contract
where the asset in question was obtained for the customer's exclusive use
pursuant to the contract terms, but including proceeds available to a Loan Party
or Subsidiary upon any release of funds from previously established reserves
with respect thereto), net of taxes and reasonable expenses and reserves;
provided that if the Borrower shall deliver a certificate of a Responsible
Officer to the Administrative Agent promptly following receipt of any such
proceeds setting forth the Borrower's intention to use, or to cause the
applicable Loan Party or Subsidiary to use, any portion of such proceeds to (A)
purchase assets useful in the business of the Borrower and the Subsidiaries or
(B) fund Consolidated Service Contract Capital Expenditures within 12 months of
such receipt, such portion of such proceeds shall not constitute Insurance
Proceeds except to the extent not so used within such 12-month period; provided,
further that no proceeds realized with respect to a single event or series of
related events of $1,000,000 or less shall constitute Insurance Proceeds unless
the aggregate amount of all relevant proceeds received after the Closing Date,
exceeds $10,000,000 in aggregate or $5,000,000 during any Annual Fiscal Period),
in which case the $1,000,000 floor with respect to covered proceeds shall not
apply.
"Intellectual Property Security Agreement" shall mean the
Intellectual Property Security Agreement, dated as of the date hereof, among
Holdings, the Borrower and certain
16
Subsidiaries and the Administrative Agent for the benefit of the Secured
Parties, substantially in the form of Exhibit F.
"Interest Coverage Ratio" shall mean, as of any date of
determination, the ratio of (a) Adjusted EBITDA to (b) Cash Interest Expense
(excluding Deferred Subordinated Note Interest to the extent paid from funds in
the Dividend/CapEx Funding Account or, to the extent permitted in Section 2.22,
the CapEx Funding Account), in each case for the twelve Monthly Fiscal Periods
ending on such date of determination; provided, however, that for any date of
determination prior to the first anniversary of the Closing Date, Cash Interest
Expense shall be measured for the period commencing on the first day of the
first full Monthly Fiscal Period after the Closing Date and ending on the date
of determination, divided by the number of days in such Fiscal Period and
multiplied by 365.
"Interest Deferral Period" shall mean any period during which
the payment of interest on the Holdings Subordinated Notes is deferred in
accordance with Section 6.18.
"Interest Expense" shall mean, for any Fiscal Period, (a)
gross interest expense of Holdings and its Subsidiaries for such Fiscal Period
determined on a consolidated basis, including without limitation (i) the
amortization of debt discounts, (ii) the amortization of all fees (including
fees with respect to interest rate protection agreements) payable in connection
with the incurrence of Indebtedness to the extent included in interest expense,
(iii) the portion of any payments or accruals with respect to Capital Lease
Obligations allocable to interest expense and (iv) any interest accrued on the
Deferred Subordinated Note Interest plus (b) capitalized interest of Holdings
and its Subsidiaries on a consolidated basis for such Fiscal Period; minus (c)
gross interest income of Holdings and its Subsidiaries on a consolidated basis
for such Fiscal Period. For purposes of the foregoing, gross interest expense
shall be determined after giving effect to any net payments made or received by
Holdings and its Subsidiaries with respect to interest rate protection
agreements. For the purposes of determining Interest Expense with respect to any
portion of any Fiscal Period that falls prior to the Closing Date, the
applicable Pre-Closing Level shall be utilized.
"Interest Payment Date" shall mean, with respect to Eurodollar
Loans (without regard to the term of the related Interest Period), ABR Loans and
the Term Notes, the Dividend Payment Date in each Monthly Fiscal Period,
commencing in the Monthly Fiscal Period following the month in which the Closing
Date occurs.
"Interest Period" shall mean as to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is
one, two, three or six months thereafter, as the Borrower may elect, and the
date any Eurodollar Borrowing is converted to an ABR Borrowing in accordance
with Section 2.7 or repaid or prepaid in accordance with Section 2.9 or 2.10;
provided, however, that if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
17
preceding Business Day. Interest shall accrue from and including the first day
of an Interest Period to but excluding the last day of such Interest Period.
"Initial Projections" shall have the meaning given to such
term in Section 3.5(b).
"KeyBank" shall have the meaning given to such term in the
preamble hereto.
"L/C Participation Fee" shall have the meaning given such term
in Section 2.5(b).
"Lender" shall mean each financial institution listed on the
signature pages hereto as a Lender, together with each such institution's
successors and permitted assigns; provided, the term "Lenders" shall also
include each Swingline Lender and each Fronting Bank unless the context
otherwise requires.
"Letter of Credit" shall mean any letter of credit issued
pursuant to Section 2.18.
"Letter of Credit Commitment" shall mean the commitment of the
Fronting Bank to issue Letters of Credit pursuant to Section 2.18(a).
"Letter of Credit Disbursement" shall mean a payment or
disbursement made by the Fronting Bank pursuant to a Letter of Credit.
"Letter of Credit Exposure" shall mean, at any time, the sum
of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such
time plus (b) the aggregate principal amount of all Letter of Credit
Disbursements that have not yet been reimbursed at such time. The Letter of
Credit Exposure of any Revolving Credit Lender at any time shall mean its
Applicable Percentage of the aggregate Letter of Credit Exposure at such time.
"Letter of Credit Sublimit" shall have the meaning given to
such term in Section 2.18(a).
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing, the rate (rounded upwards, if necessary, to the next 1/16 of 1%) at
which dollar deposits approximately equal in principal amount to the
Administrative Agent's portion of such Eurodollar Borrowing (or, if the
Administrative Agent shall not have any portion of such Borrowing, the average
amount of the portions of each Lender having any portion of such Borrowing) and
for a maturity comparable to the Interest Period of such Eurodollar Borrowing
are offered to the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
18
"Loan Documents" shall mean this Agreement, the Notes, the
Letters of Credit, the Guarantee Agreements, the Term Lender Fee Letter and the
Security Documents.
"Loan Parties" shall mean the Borrower and the Guarantors.
"Loan" and/or "Loans" shall mean the Revolving Loan(s) and/or
the Swingline Loan(s), in each case as the context requires.
"Margin Stock" shall have the meaning given such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse
effect on the assets, business, properties, financial condition, liabilities,
results of operations or prospects of Holdings, the Borrower and the
Subsidiaries, taken as a whole, (b) an impairment of the ability of Holdings,
the Borrower or any Subsidiary to perform any of its material obligations under
any Loan Document to which it is or will be a party or (c) an impairment of the
validity or enforceability of, or a impairment of the material rights, remedies
or benefits available to the Lenders, the Fronting Bank or Administrative Agent
under, any Loan Document.
"Material Service Contract" shall mean a Service Contract
pursuant to which five percent or more of EBITDA was generated for the most
recently ended 12 Monthly Fiscal Periods.
"Met Life" shall mean Metropolitan Life Insurance Company,
together with (i) any corporation or other entity controlling, controlled by, or
under common control with, Metropolitan Life Insurance Company and (ii) any
managed account or investment fund which is managed by Metropolitan Life
Insurance Company or a corporation or entity described in clause (i) of this
definition. For purposes of this definition the terms "control", "controlling"
and "controlled" shall mean the ownership, directly or through subsidiaries, of
a majority of a corporation's or other Person's voting stock or equivalent
voting securities or interests.
"Monthly Fiscal Period" shall have the meaning given to such
term in Section 3.5(c).
"Monthly Report" shall have the meaning given to such term in
Section 5.4(a).
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions.
"Net Debt" shall mean, as of any date, (a) the actual
outstanding amount of all funded Indebtedness of Holdings and its Subsidiaries
on such date, measured on a consolidated basis (provided that with respect to
the portion thereof represented by the Revolving Credit Commitments, such amount
shall be calculated as the weighted average principal balance of Revolving
Credit Exposure outstanding during the immediately preceding twelve Monthly
Fiscal Periods), plus (b) without duplication, all other Indebtedness of
Holdings and its Subsidiaries on
19
such date, measured on a consolidated basis (including, without limitation, the
outstanding principal amount of Holdings Subordinated Notes and Deferred
Subordinated Note Interest), less (c) any early termination payments that would
be owed by Holdings and its Subsidiaries on such date if all outstanding
interest rate protection agreements, foreign currency exchange agreements or
other interest or exchange rate hedging arrangements were terminated, less (d)
the amount of cash of Holdings and its Subsidiaries on the balance sheet on such
date in excess of $7,500,000 to the extent such excess cash consists of
immediately available, unrestricted funds in deposit accounts and at all times
90 days or more after the Closing Date subject to Control Agreements, excluding
for all purposes of this clause (d) all cash in the Cash Collateral Account and
the Existing Subordinated Notes Cash Collateral Account, less (e) the
outstanding principal amount of the Existing Subordinated Notes. Net Debt shall
not include obligations of Holdings or any of its Subsidiaries to make minimum
payments or to provide minimum or guaranteed commissions under any Service
Contract or any reasonable and customary indemnification obligations incurred by
Holdings or its Subsidiaries.
"Net Senior Debt" shall mean, as of any date, all Indebtedness
of Holdings and its Subsidiaries on such date, measured on a consolidated basis
(provided that with respect to the portion thereof represented by the Revolving
Credit Commitments, such amount shall be calculated as the weighted average
principal balance of Revolving Credit Exposure outstanding during the
immediately preceding twelve Monthly Fiscal Periods), excluding (a) the
outstanding principal amount of any Holdings Subordinated Notes, the Existing
Subordinated Notes and any Deferred Subordinated Note Interest, (b) any early
termination payments that would be owed if all outstanding interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements were terminated, (c) the amount of cash of
Holdings and its Subsidiaries on the balance sheet on such date in excess of
$7,500,000 to the extent such excess cash consists of immediately available,
unrestricted funds in deposit accounts and at all times 90 days or more after
the Closing Date subject to Control Agreements, excluding for all purposes of
this clause (c) all cash in the Cash Collateral Account and the Existing
Subordinated Notes Cash Collateral Account (d) obligations of Holdings or any of
its Subsidiaries to make minimum payments or to provide minimum or guaranteed
commissions under any Service Contract or any reasonable and customary
indemnification obligation incurred by Holdings or its Subsidiaries.
"Non-Cash Items" shall mean, for any Fiscal Period, (a) all
non-cash compensation paid to any senior officer of Holdings and its
Subsidiaries during such Fiscal Period, whether on a cash or non-cash basis and
(b) all non-cash writedowns during such Fiscal Period with respect to the value
of customer contracts in an amount not to exceed $2,000,000 in the aggregate.
"Non-Guarantor Expenditure" shall mean (i) any amount expended
to acquire an interest in, to invest in or to lend to a Foreign Subsidiary, a
Non-Wholly-Owned Subsidiary or joint venture in which the Borrower or a
Subsidiary owns Capital Stock, other than amounts expended to acquire interests
in Non-Wholly Owned Subsidiaries and joint ventures which as a result of such
acquisition become Wholly-Owned Subsidiaries (which expenditures will, for
purposes of this Agreement, be considered Capital Expenditures), and (ii) any
assets or property sold, leased or transferred to a Non-Wholly-Owned Subsidiary
or joint venture. Non-Guarantor
20
Expenditures outstanding at any time shall be calculated net of any
Non-Guarantor Expenditures that have been repaid or returned to Loan Parties.
"Non-U.S. Lender" shall have the meaning given to such term in
Section 2.17(a).
"Non-Wholly-Owned Subsidiary" shall mean any Subsidiary other
than a Wholly-Owned Subsidiary.
"Notes" shall mean any promissory note of the Borrower issued
pursuant to this Agreement.
"Obligations" shall mean all obligations owing by any Loan
Party to any Lender pursuant to or in connection with this Agreement or any
other Loan Document, and shall include all now existing or hereafter arising
debts, obligations, covenants, and duties of payment or performance of every
kind, matured or unmatured, direct or contingent, owing, arising, due, or
payable to any Lender by any Loan Party arising out of this Agreement or any
other Loan Document, including all obligations to repay the Loans and the Term
Notes, all reimbursement obligations related to Letters of Credit, and all
obligations to pay Term Note Make-Whole Amount, interest, Fees, costs, charges,
expenses, professional fees, and all sums chargeable to any Loan Party or for
which any Loan Party is liable as indemnitor or guarantor under the Loan
Documents, whether or not evidenced by any note or other instrument.
"Offering" shall have the meaning given to such term in the
preamble hereto.
"Offering Documents" shall mean and include the Form S-1 filed
by Holdings and the Borrower with the SEC, the Prospectus and the Subordinated
Note Documents.
"Other Taxes" shall have the meaning given to such term in
Section 2.17(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Permitted Business Acquisition" shall mean any acquisition by
any Loan Party of all or any portion of the assets of, or shares or other equity
interests in, a Person or division or line of business of a Person (or any
subsequent investment made in a previously acquired Permitted Business
Acquisition) if immediately after giving effect thereto: (a) no Default or Event
of Default shall have occurred and be continuing or would result therefrom, (b)
all transactions related thereto shall be consummated in accordance with
applicable laws, (c) the board of directors or similar authority of the Person
whose assets or Capital Stock are being acquired has approved the transaction,
(d) at least 90% of the Capital Stock of any acquired or newly formed
corporation, partnership, association or other business entity is owned directly
by a Loan Party or its Subsidiary and all actions required to be taken, if any,
with respect to such acquired or newly formed Subsidiary under Section 5.11
shall have been taken, (e) Holdings, the Borrower and the Subsidiaries shall be
in compliance, on a pro forma basis after giving effect to such acquisition or
formation, with the covenants contained in Sections 6.10, 6.11 and 6.12
recomputed as at the last day of the most recently ended Monthly Fiscal Period
for which a Monthly Report has been delivered as if such acquisition had
occurred on the first day of each relevant period for testing such compliance,
and the Borrower shall have delivered to the
21
Administrative Agent a certificate of a Financial Officer to such effect,
together with all relevant financial information for such Subsidiary or assets,
and (f) any acquired or newly formed Subsidiary shall not be liable for any
Indebtedness (except for Indebtedness permitted by Section 6.1).
"Permitted Liens" shall mean all Liens expressly permitted
under Section 6.2.
"Permitted Liquid Investments" shall mean: (a) direct
obligations of the United States of America or any agency thereof or obligations
guaranteed by the United States of America or any agency thereof; (b) time
deposit accounts, certificates of deposit and money market deposits maturing
within 180 days of the date of acquisition thereof issued by a bank or trust
company which is organized under the laws of the United States of America, any
state thereof or any foreign country recognized by the United States of America
having capital, surplus and undivided profits aggregating in excess of
$250,000,000 (or the foreign currency equivalent thereof) and whose long-term
debt, or whose parent holding company's long-term debt, is rated A (or such
similar equivalent rating or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the Securities Act
of 1933, as amended)); (c) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b)
above; (d) commercial paper, maturing not more than 180 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Borrower)
organized and in existence under the laws of the United States of America or any
foreign country recognized by the United States of America with a rating at the
time as of which any investment therein is made of P-1 (or higher) according to
Moody's, or A-1 (or higher) according to S&P; (e) securities with maturities of
six months or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least A by S&P
or A by Moody's; (f) mutual funds whose investment guidelines restrict such
funds' investments to those satisfying the provisions of clauses (a) through (e)
above; and (g) time deposit accounts, certificates of deposit and money market
deposits in an aggregate face amount not in excess of -1/2 of 1% of total assets
of the Borrower and the Subsidiaries, on a consolidated basis, as of the end of
the Borrower's most recently completed Annual Fiscal Period.
"Permitted Service Contract" shall mean any Service Contract
if, in the case of a new Service Contract, immediately after its becoming
effective or, in the case of a Service Contract being renewed, immediately after
the effectiveness of such renewal: (a) no Default or Event of Default shall have
occurred and be continuing or would result therefrom, (b) all transactions
related thereto and performance thereunder shall be consummated in accordance
with applicable laws, and (c) all rights in such Service Contract are owned
directly by the Borrower or a Subsidiary or a joint venture in which the
Borrower or a Subsidiary has at least a 50% interest.
"Person" shall mean any natural person, corporation, business
trust, joint venture, association, company, limited liability company,
partnership or government, or any agency or political subdivision thereof.
22
"Plan" shall mean any employee pension benefit plan as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan) subject to the
provisions of Title IV of ERISA or Section 412 of the Code and in respect of
which the Borrower or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, dated as
of the date hereof, among Holdings, the Borrower, certain Subsidiaries and the
Administrative Agent for the benefit of the Secured Parties, substantially in
the form of Exhibit G.
"Pledged Stock" shall have the meaning given to such term in
the Pledge Agreement.
"Pre-Closing Levels" shall mean the levels of EBITDA, Adjusted
EBITDA, the weighted average principal balance of Revolving Credit Exposure for
purposes of Net Debt and Net Senior Debt, Available Cash, Interest Expense and
Cash Interest Expense applicable for each Monthly Fiscal Period ending prior to
the Closing Date, which amounts are set forth on Schedule 1.1(A).
"Prepaid Principal" shall mean, with respect to any Term Note,
the principal of such Term Note that is to be prepaid pursuant to Section 2.9 or
2.10 or has become or is declared to be immediately due and payable pursuant to
Article VII, as the context requires.
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective on the date such change is publicly announced as
being effective.
"Prior Credit Agreement" shall mean that certain Credit
Agreement, dated as of December 3, 1998, by and among the Borrower, Holdings,
certain financial institutions, Xxxxxxx Xxxxx Credit Partners L.P. as a Joint
Lead Arranger and Syndication Agent, Chase Manhattan Bank Delaware, as the
Fronting Bank and The Chase Manhattan Bank as a Joint Lead Arranger, the
Swingline Lender and the Administrative Agent.
"Projected Distributable Cash" shall mean, for any Monthly
Fiscal Period, the projected amount of Distributable Cash for such Monthly
Fiscal Period set forth in Schedule 1.1(B).
"Projections" shall have the meaning given to such term in
Section 5.4(g).
"Properties" shall have the meaning given to such term in
Section 3.17(a).
"Prospectus" shall have the meaning given to such term in the
preamble hereto.
"Prudential" shall mean The Prudential Insurance Company of
America, together with (i) any corporation or other entity controlling,
controlled by, or under common control with, Prudential Investment Management,
Inc. and (ii) any managed account or investment fund which is managed by
Prudential Investment Management, Inc. or a corporation or entity described in
23
clause (i) of this definition. For purposes of this definition the terms
"control", "controlling" and "controlled" shall mean the ownership, directly or
through subsidiaries, of a majority of a corporation's or other Person's voting
stock or equivalent voting securities or interests.
"Quarterly Fiscal Period" shall have the meaning given to such
term in Section 3.5(c).
"Refunded Swingline Loans" shall have the meaning given to
such term in Section 2.3(c).
"Register" shall have the meaning given to such term in
Section 9.4(c).
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Reimbursement Obligation" shall mean the obligation of the
Borrower to reimburse the Fronting Bank for any Letter of Credit Disbursements
incurred pursuant to this Agreement.
"Reinvestment Yield" shall mean, with respect to the Prepaid
Principal of any Term Note, 100 basis points over the yield to maturity implied
by (i) the yields reported as of 10:00 a.m. (New York City local time) on the
Business Day next preceding the Settlement Date with respect to such Prepaid
Principal for actively traded U.S. Treasury securities having a maturity equal
to the Remaining Life of such Prepaid Principal as of such Settlement Date on
the display designated as "Page PX1" on the Bloomberg Financial Market Service
(or such other display as may replace Page PX1 on Bloomberg Financial Market
Service), or if such yields shall not be reported as of such time or the yields
reported as of such time shall not be ascertainable, (ii) the Treasury Constant
Maturity Series yields reported, for the latest day for which such yields shall
have been so reported as of the Business Day next preceding the Settlement Date
with respect to such Prepaid Principal, in Federal Reserve Statistical Release
H.15(519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Life of
such Prepaid Principal as of such Settlement Date. Such implied yield shall be
determined, if necessary, by (a) converting U.S. Treasury xxxx quotations to
bond equivalent yields in accordance with accepted financial practice and (b)
interpolating linearly between yields reported for various maturities. The Term
Note Make-Whole Amount shall be rounded to that number of decimal places as
appears in the coupon of the applicable Term Note.
"Release" shall have the meaning given such term in CERCLA, 42
U.S.C. Section 9601(22).
"Remaining Life" shall mean, with respect to the Prepaid
Principal of any Term Note, the number of years (calculated to the nearest
one-twelfth year) that will elapse between the Settlement Date with respect to
such Called Principal and the Term Note Maturity Date.
24
"Remaining Scheduled Payments" shall mean, with respect to the
Prepaid Principal of any Term Note, such Prepaid Principal and all payments of
interest that would be due on or after the Settlement Date with respect to such
Prepaid Principal if no payment of such Prepaid Principal were made prior to its
scheduled due date.
"Remedial Action" shall mean (a) "remedial action" as such
term is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other
actions, including studies and investigations, required by any Governmental
Authority or voluntarily undertaken to: (i) clean up, remove, treat, xxxxx or in
any other way respond to any Hazardous Material in the environment; or (ii)
prevent the Release or threat of Release, or minimize the further Release of any
Hazardous Material.
"Reportable Event" shall mean any reportable event as defined
in Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan.
"Required Lenders" shall mean,
(a) at any time prior to an Event of Default, but subject to
paragraph (b) Lenders holding Revolving Credit Exposure, Term Notes, Term Note
Make-Whole Amount, and unused Revolving Credit Commitments representing at least
51% of the sum of all Revolving Credit Exposure, Term Notes, Term Note
Make-Whole Amounts and unused Revolving Credit Commitments outstanding at such
time;
(b) at any time that an Event of Default shall have occurred
and be continuing, or would result without an amendment or waiver, any
amendments and waivers to the Loan Documents (other than amendments and waivers
requiring consent of all Lenders or each affected Lender, as specified in
Section 9.8) shall require the consent of the holders of 51% of all such
Revolving Credit Exposure and Term Notes (with the numerator and denominator for
such calculation to include the amount of any funding indemnity costs and Term
Note Make-Whole Amounts); provided that (x) the vote by holders of Revolving
Credit Exposure and funding indemnity costs related thereto shall be controlled
by the vote of Lenders holding 51% or more of such Revolving Credit Exposure and
funding indemnity costs, and (y) the vote by holders of Term Notes and Term Note
Make-Whole Amounts shall be controlled by the vote of Lenders holding 66 2/3% or
more of such Term Notes and Term Note Make-Whole Amount; provided, further, that
(i) with respect to amendments and waivers affecting only the Term Notes and
Term Note Make-Whole Amount, only the consent of 66 2/3% of the Lenders holding
such Term Notes and Term Note Make-Whole Amount shall be required and (ii) with
respect to amendments and waivers affecting only the Revolving Credit
Commitments and Revolving Credit Exposure, only the consent of 51% of the
Lenders holding such Revolving Credit Exposure shall be required; and
(c) with respect to acceleration of all Term Notes and all
Revolving Credit Exposure, and the exercise of any other remedies hereunder or
under the other Loan Documents, a vote of the holders of either 51% of the
outstanding Revolving Credit Exposure or 66 2/3% of the Term Notes will be
required, except that if a Event of Default arising under clause (b) or (c) of
Article VII has occurred and is continuing, any Lender may accelerate its Term
Notes (but not Revolving Credit Exposure) by notice to the Administrative Agent
and the Borrower.
25
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised
of Revolving Loans.
"Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Revolving Credit Loans hereunder
as set forth in Section 2.2(a) or in the Assignment and Acceptance pursuant to
which such Lender assumed its Revolving Credit Commitment, as applicable, as the
same may be reduced from time to time pursuant to Sections 2.8 and 2.10 and
pursuant to assignments by such Lender pursuant to Section 9.4. As of the
Closing Date the aggregate Revolving Credit Commitment of all of the Lenders is
$50,000,000.
"Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Credit Loans of such Lender plus the amount at such time
of such Lender's Applicable Percentage of the Letter of Credit Exposure plus the
amount at such time of such Lender's Swingline Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving
Credit Commitment.
"Revolving Credit Loans" shall mean the revolving loans made
by the Lenders to the Borrower pursuant to Section 2.2. Each Revolving Loan
shall be a Eurodollar Loan or an ABR Revolving Loan.
"Revolving Credit Maturity Date" shall mean the third (3rd)
anniversary of the Closing Date.
"S&P" shall mean Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc.
"Secured Parties" shall have the meaning given such term in
the Security Agreement.
"Security Agreement" shall mean the Security Agreement, dated
as of the date hereof, among Holdings, the Borrower, the Subsidiaries and the
Administrative Agent for the benefit of the Secured Parties, substantially in
the form of Exhibit H.
"Security Documents" shall mean the Security Agreement, the
Intellectual Property Security Agreement, the Pledge Agreement, the Cash
Collateral Agreement, the Existing Subordinated Notes Cash Collateral Agreement,
the Control Agreements, the Additional Security Documents and each of the
security agreements, pledge agreements, mortgages and other instruments and
documents executed and delivered pursuant to any of the foregoing or pursuant to
Section 5.11.
26
"Senior Indebtedness" means Indebtedness in respect of
borrowed money of Holdings, the Borrowers, and their respective Subsidiaries
that is senior in priority of payment to the Holdings Subordinated Notes (and
the related guaranties), including without limitation Indebtedness outstanding
under the Loan Documents.
"Senior Leverage Ratio" shall mean, as of any date of
determination, the ratio of (a) Net Senior Debt as of such date of determination
to (b) Adjusted EBITDA for the twelve Monthly Fiscal Periods ending as of such
date of determination.
"Service Contract" shall mean any contract for the provision
of services to which the Borrower or any Subsidiary is a party that does not
result in such party engaging in any business activity other than the business
currently conducted by it and business activities reasonably incidental or
related thereto.
"Settlement Date" shall mean, with respect to the Prepaid
Principal of any Term Note, the date on which such Prepaid Principal is to be
prepaid pursuant to Section 2.9 or 2.10 or has become or is declared to be
immediately due and payable pursuant to Article VII, as the context requires.
"Source" shall have the meaning given to such term in Section
9.18(b).
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking authority, domestic
or foreign, to which the Administrative Agent is subject with respect to
Eurocurrency Liabilities (as defined in Regulation D of the Board) or other
categories of liabilities or deposits by reference to which the LIBO Rate is
determined. Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets which may be available from time to
time to any Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subordinated Note Documents" shall mean the Subordinated Note
Indenture and all Holdings Subordinated Notes issued pursuant thereto.
"Subordinated Note Indenture" shall mean that certain
Subordinated Note Indenture, dated as of December 1, 2003, between Holdings and
The Bank of New York as Indenture Trustee.
"Subordinated Note Interest Payment Date" shall mean the
[15]th day of each calendar month commencing as of such date in the second full
calendar month after the Closing Date.
"Subsidiary" shall mean, with respect to any Person (herein
referred to as the "parent"), any corporation, partnership, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than
27
50% of the ordinary voting power or more than 50% of the general partnership
interests are, at the time any determination is being made, directly or
indirectly, owned, controlled or held, or (b) which is, at the time any
determination is made, otherwise Controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent. Unless otherwise provided herein, each reference to a Subsidiary shall
be deemed to refer to a Subsidiary of Holdings.
"Subsidiary Guarantee Agreement" shall mean the Subsidiary
Guarantee Agreement, dated as of the date hereof, executed by certain
Subsidiaries of Borrower in favor of the Administrative Agent for the benefit of
the Secured Parties, substantially in the form of Exhibit I.
"Subsidiary Guarantor" shall mean each direct or indirect
Subsidiary that executes, or joins after the Closing Date, the Subsidiary
Guarantee Agreement.
"Swingline Exposure" shall mean at any time the aggregate
principal amount of all outstanding Swingline Loans at such time. The Swingline
Exposure of any Revolving Credit Lender at any time shall mean its Applicable
Percentage of the aggregate Swingline Exposure at such time.
"Swingline Lender" shall have the meaning given to such term
in the preamble hereto.
"Swingline Loan Commitment" shall mean the commitment of the
Swingline Lender to make Swingline Loans as set forth in Section 2.3(a). As of
the Closing Date the aggregate amount of the Swingline Loan Commitment is
$2,500,000.
"Swingline Loans" shall mean the swingline loans made by the
Swingline Lender to the Borrower pursuant to Section 2.3.
"Tax Provisions" shall mean, for any Fiscal Period, the sum of
(a) the provision for taxes based on income or profits which was deducted from
gross income in the computation of net income, plus (b) without duplication, the
cash amount of any such taxes paid in excess of the corresponding provisions.
"Term Lender" shall mean any holder of a Term Note.
"Term Lender Fee Letter" shall mean that certain letter
agreement, dated as of the Closing Date, by and among Holdings, the Company and
the Term Lenders.
"Term Note Make-Whole Amount" shall mean with respect to any
Term Note an amount equal to the excess, if any, of the Discounted Value of the
Prepaid Principal of such Term Note over the sum of (i) such Prepaid Principal
plus (ii) interest accrued thereon as of (including interest due on) the
Settlement Date with respect to such Prepaid Principal. The Term Note Make-Whole
Amount shall in no event be less than zero.
"Term Note Maturity Date" shall mean the date four and
one-half years immediately following the Closing Date.
28
"Term Notes" shall mean each senior promissory note delivered
to the Term Lenders pursuant to this Agreement substantially in the form of
Exhibit J and each senior promissory note delivered in substitution or exchange
for any other Term Note pursuant to this Agreement.
"Term Note Rate" shall mean a rate per annum equal to [__%.]
"Total Leverage Ratio" shall mean, as of any date, the ratio
of (a) Net Debt as of such date to (b) Adjusted EBITDA for the twelve Monthly
Fiscal Periods ending as of such date.
"Total Revolving Credit Commitment" shall mean, at any time,
the aggregate amount of the Revolving Credit Commitments of all Lenders in
effect at such time.
"Total Revolving Credit Exposure" shall mean, at any time, the
aggregate amount of the Revolving Credit Exposure of all Lenders.
"Transaction Documents" shall mean the Loan Documents and the
Offering Documents.
"Transactions" shall have the meaning given to such term in
the preamble hereto.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, the term "Rate"
shall include the Adjusted LIBO Rate and the Alternate Base Rate.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of New York.
"Unamortized Contract Value Proceeds" shall mean the cash
proceeds of any unamortized contract value paid to a Loan Party after the
Closing Date to the extent exceeding in aggregate $10,000,000, provided that if
the Borrower shall deliver a certificate to the Administrative Agent promptly
following receipt of any such proceeds setting forth the intention of a Loan
Party to use any portion of such proceeds to (x) enter into replacement
contracts (or extend or renew existing contracts) that constitute Permitted
Service Contracts or (y) fund either Consolidated Service Contract Capital
Expenditures, in each case within 18 months of such receipt, such portion of
such proceeds shall not constitute Unamortized Contract Value Proceeds (except
to the extent not so used within such 18-month period).
"U.S. GAAP" shall mean generally accepted accounting
principles in effect from time to time in the United States.
"USD Equivalent" shall have the meaning given to such term in
Section 2.18(l).
"Waivable Prepayment" shall have the meaning given to such
term in Section 2.10(h).
29
"Wholly-Owned Subsidiary" means a Subsidiary, at least 99% of
the Capital Stock of which (other than directors' qualifying shares) is owned by
Holdings, the Borrower or one of their wholly-owned Subsidiaries.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.
SECTION 1.2 Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented, joined or otherwise
modified from time to time and (b) all terms of an accounting or financial
nature shall be construed in accordance with U.S. GAAP, as in effect from time
to time; provided, however, that for purposes of determining compliance with the
covenants contained herein, all accounting terms herein shall be interpreted and
all accounting determinations hereunder (in each case, unless otherwise provided
for or defined herein) shall be made in accordance with U.S. GAAP as in effect
on the date of this Agreement and applied on a basis consistent with the
application used in the financial statements referred to in Section 3.5; and
provided further that if the Borrower notifies the Administrative Agent that the
Borrower wishes to amend any covenant or definition herein to eliminate the
effect of any change in U.S. GAAP occurring after the date of this Agreement on
the operation of such covenant (or if the Administrative Agent notifies the
Borrower that the Required Lenders wish to amend any covenant or any definition
for such purpose), then (i) the Borrower and the Administrative Agent shall
negotiate in good faith to agree upon an appropriate amendment to such covenant
and (ii) the Borrower's compliance with such covenant shall be determined on the
basis of U.S. GAAP in effect immediately before the relevant change in U.S. GAAP
became effective until such covenant is amended in a manner satisfactory to the
Borrower and the Required Lenders.
ARTICLE II
THE CREDIT FACILITIES
SECTION 2.1 The Term Notes. (a) The Borrower will authorize the
issuance of the Term Notes in the aggregate principal amount of $65,000,000, to
be dated the Closing Date, to mature on the Term Note Maturity Date, to bear
interest on the unpaid balance thereof from the Closing Date until the principal
thereof shall have become due and payable at Term Note Rate or the Default Rate
to the extent provided in Section 2.6, and to be substantially in the form of
Exhibit J.
(b) The Borrower hereby agrees to sell to each Term Lender
and, subject to the terms and conditions herein set forth, each Term Lender
agrees to purchase from the Borrower Term Notes in a principal amount equal to
the amount set forth on Schedule 2.1
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opposite such Term Lender's name at 100% of such aggregate principal amount. The
Borrower will deliver to each Term Lender, at the offices of King & Spalding LLP
at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 one or more Term Notes
registered in its name, evidencing the aggregate principal amount of Term Notes
to be purchased by such Term Lender and in the denomination or denominations set
forth on Schedule 2.1, against payment of the purchase price thereof by transfer
of immediately available funds to the Administrative Agent for credit to the
Borrower's account on or before the Closing Date.
SECTION 2.2 The Revolving Credit Commitment.
(a) Subject to the terms and conditions and relying upon
the representations and warranties of the Loan Parties in the Loan Documents,
each Revolving Credit Lender agrees, severally and not jointly, to make
Revolving Loans to the Borrower, at any time and from time to time on or after
the date hereof, and until the earlier of the Revolving Credit Maturity Date and
the termination of the Revolving Credit Commitment of such Lender in accordance
with the terms hereof, in an aggregate principal amount at any time outstanding
that will not result in such Lender's Revolving Credit Exposure at such time
exceeding such Lender's Revolving Credit Commitment set forth on Schedule 2.2,
as the same may be reduced from time to time pursuant to Sections 2.8 or 2.10
hereof.
(b) Each Revolving Credit Loan shall be made as part of a
Borrowing consisting of Revolving Credit Loans made by the Revolving Credit
Lenders ratably in accordance with their respective Revolving Credit
Commitments; provided, however, that the failure of any Revolving Credit Lender
to make any Revolving Credit Loan shall not relieve any other Lender of its
obligation to lend hereunder (it being understood, however, that no Revolving
Credit Lender shall be responsible for the failure of any other Revolving Credit
Lender to make any Loan required to be made by such other Lender). The Revolving
Credit Loans comprising any Borrowing shall be in an aggregate principal amount
which is (i) an integral multiple of $1,000,000 (or, in the case of Swingline
Loans, $250,000) and not less than $1,000,000 (or, in the case of Swingline
Loans, $250,000) or (ii) equal to the remaining available balance of the
Revolving Credit Commitments; provided that Revolving Credit Loans used to pay
Refunded Swingline Loans may be in the amount of such Refunded Swingline Loans.
(c) Each Revolving Credit Borrowing shall be comprised
entirely of ABR Loans or (except in the case of Swingline Loans) Eurodollar
Loans as the Borrower may request pursuant to this Section 2.2. Each Revolving
Credit Lender may at its option make any Eurodollar Loan by causing any domestic
or foreign branch or Affiliate of such Lender to make such Revolving Credit
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Revolving Credit Loan in accordance with the terms
of this Agreement and such Revolving Credit Lender shall not be entitled to any
amounts payable under Section 2.11 or Section 2.17 in respect of increased costs
arising as a result of such exercise. Revolving Credit Borrowings of more than
one Type may be outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Revolving Credit Borrowing that,
if made, would result in more than six Eurodollar Borrowings outstanding
hereunder at any time. For purposes of the foregoing, Borrowings having
different Interest Periods, regardless of whether they commence on the same
date, shall be considered separate Borrowings.
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(d) Subject to paragraph (f) below, each Revolving Credit
Lender shall make each Revolving Credit Loan to be made by it hereunder on the
proposed date thereof by wire transfer to such account as the Administrative
Agent may designate in federal funds not later than 11:00 a.m., New York City
time, and the Administrative Agent shall by 12:00 (noon), New York City time,
(a) in the case of any Revolving Credit Loan made to reimburse any L/C
Disbursement or to refund any Swingline Loan, apply the amounts so received to
effect such reimbursement or refund as contemplated by Sections 2.3(c) or 2.18,
and (b) in the case of each Revolving Credit Loan the proceeds of which are to
be received by the Borrower, credit the amounts so received to an account
designated by the Borrower in the applicable Borrowing Request; provided,
however, that if a Borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, the Administrative Agent
shall return the amounts so received to the respective Lenders.
(e) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Revolving
Credit Lender will not make available to the Administrative Agent such Revolving
Credit Lender's portion of such Revolving Credit Borrowing, the Administrative
Agent may assume that such Revolving Credit Lender has made such portion
available to the Administrative Agent on the date of such Revolving Credit
Borrowing in accordance with paragraph (d) above and may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If the Administrative Agent shall have so made funds available then, to the
extent that such Revolving Credit Lender shall not have made such portion
available to the Administrative Agent, such Revolving Credit Lender and the
Borrower severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent, at (i) in the case of the
Borrower, the interest rate applicable at the time to the Revolving Credit Loans
comprising such Revolving Credit Borrowing and (ii) in the case of such Lender,
a rate determined by the Administrative Agent to represent its cost of overnight
or short-term funds (which determination shall be conclusive absent manifest
error). If such Revolving Credit Lender shall repay to the Administrative Agent
such corresponding amount, such amount shall constitute such Revolving Credit
Lender's Loan as part of such Revolving Credit Borrowing for purposes of this
Agreement.
(f) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Revolving Credit
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Credit Maturity Date.
(g) The Borrower may refinance all or any part of a
Revolving Credit Borrowing with another Revolving Credit Borrowing. Any
Revolving Credit Borrowing or part thereof so refinanced shall be deemed to be
repaid or prepaid in accordance with the applicable provisions of this Agreement
with the proceeds of the new Revolving Credit Borrowing and the proceeds of such
new Borrowing, to the extent they do not exceed the principal amount of the
Borrowing being refinanced, shall not be paid by the Revolving Credit Lenders to
the Administrative Agent or by the Administrative Agent to the Borrower pursuant
to paragraph (c) above.
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(h) In order to request a Revolving Credit Borrowing, the
Borrower shall hand deliver or telecopy to the Administrative Agent a duly
completed Borrowing Request substantially in the form of Exhibit D-1, (a) in the
case of a Eurodollar Borrowing, not later than 12:00 (noon), New York City time,
three Business Days before a proposed Revolving Credit Borrowing, and (b) in the
case of an ABR Borrowing, not later than 12:00 noon, New York City time, three
Business Days before a proposed Revolving Credit Borrowing; provided, however,
that Borrowing Requests with respect to Revolving Credit Borrowings to be made
on the Closing Date may, at the discretion of the Administrative Agent, be
delivered later than the times specified above. Each Borrowing Request shall be
irrevocable, shall be signed by or on behalf of the Borrower and shall specify
the following information: (i) whether such Revolving Credit Borrowing is to be
a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Revolving
Credit Borrowing (which shall be a Business Day), (iii) the amount of such
Revolving Credit Borrowing; and (iv) if such Revolving Credit Borrowing is to be
a Eurodollar Borrowing, the Interest Period with respect thereto; provided,
however, that, notwithstanding any contrary specification in any Revolving
Credit Borrowing Request, each requested Revolving Credit Borrowing shall comply
with the requirements set forth herein. If no election as to the Type of
Revolving Credit Borrowing is specified in any such notice, then the requested
Revolving Credit Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall promptly (and in any event on the same
day that the Administrative Agent receives such notice, if received by 1:00
p.m., New York City time, on such day) advise the applicable Revolving Credit
Lenders of any notice given pursuant to this Section 2.2 and of each Revolving
Credit Lender's portion of the requested Revolving Credit Borrowing. If the
Borrower shall not have delivered a Borrowing Request in accordance with this
Section 2.2 prior to the end of the Interest Period then in effect for any
Revolving Credit Borrowing requesting that such Borrowing be refinanced, then
the Borrower shall (unless the Borrower has notified the Administrative Agent,
not less than three Business Days prior to the end of such Interest Period, that
such Borrowing is to be repaid at the end of such Interest Period) be deemed to
have delivered a Borrowing Request requesting that such Revolving Credit
Borrowing be refinanced with a new Revolving Credit Borrowing of equivalent
amount, and such new Revolving Credit Borrowing shall be an ABR Borrowing.
(i) Within the limits set forth above, the Borrower may
borrow, pay or prepay and reborrow Revolving Credit Loans on or after the
Closing Date and prior to the Revolving Credit Maturity Date, subject to the
terms, conditions and limitations set forth herein.
SECTION 2.3 The Swingline Loan Commitment.
(a) The Swingline Lender hereby agrees, subject to the
terms and conditions and relying upon the representations and warranties of the
Loan Parties in the Loan Documents, and subject to the limitations set forth
below with respect to the maximum amount of Swingline Loans permitted to be
outstanding from time to time, to make a portion of the Revolving Credit
Commitments available to the Borrower from time to time during the period from
the Closing Date through and excluding the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitments in an
aggregate principal amount not to exceed the Swingline Loan Commitment, by
making Swingline Loans to the Borrower. Swingline Loans may be made
notwithstanding the fact that such Swingline Loans, when
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aggregated with the Swingline Lender's outstanding Revolving Credit Loans,
Letter of Credit Exposure and outstanding Swingline Loans, may exceed the
Swingline Lender's Revolving Credit Commitment. The aggregate amount of the
Swingline Loan Commitment is the lesser of (i) the Revolving Credit Commitment
of the Revolving Credit Lender who is also the Swingline Lender, and (ii)
$5,000,000. The Swingline Loan Commitment shall expire on the date the Revolving
Credit Commitments are terminated and all Swingline Loans and all other amounts
owed hereunder with respect to Swingline Loans shall be paid in full no later
than that date. The Borrower shall give the Swingline Lender telephonic, written
or telecopy notice (in the case of telephonic notice, such notice shall be
promptly confirmed in writing or by telecopy) not later than 12:00 (noon), New
York City time, on the day of a proposed borrowing. Such notice shall be
delivered on a Business Day, shall be irrevocable, shall refer to this Agreement
and shall specify the requested date (which shall be a Business Day) and amount
of such Swingline Loan. The Swingline Lender shall give the Administrative
Agent, which shall in turn give to each Lender, prompt written or telecopy
advice of any notice received from the Borrower pursuant to this paragraph.
(b) In no event shall (A) the aggregate principal amount
of Swingline Loans outstanding at any time exceed the aggregate Swingline Loan
Commitment in effect at such time, (B) the Total Revolving Credit Exposure at
any time exceed the Total Revolving Credit Commitments at such time or (C) the
aggregate Swingline Loan Commitment exceed at any time the Total Revolving
Credit Commitment in effect at such time. Swingline Loans may only be made as
ABR Loans.
(c) With respect to any Swingline Loans that have not
been paid by the Borrower prior to the fifth (5th) Business Day after such Loans
were made, the Swingline Lender (by request to the Administrative Agent) or
Administrative Agent at any time may, on one Business Day's notice, require each
Revolving Credit Lender, including the Swingline Lender, and each Lender hereby
agrees, subject to the provisions of this Section 2.3(c), to make a Revolving
Credit Loan (which shall be funded as an ABR loan) in an amount equal to such
Lender's Applicable Percentage of the amount of the Swingline Loans ("Refunded
Swingline Loans") outstanding on the date notice is given that the Swingline
Lender requests the Lenders to make such payments.
(d) In the case of Revolving Credit Loans made by Lenders
other than the Swingline Lender under the immediately preceding paragraph (c),
each such Lender shall make the amount of its Revolving Credit Loan available to
the Administrative Agent, in same day funds, at the office of the Administrative
Agent located at [________________________], not later than 1:00 p.m., New York
City time, on the Business Day next succeeding the date such notice is given.
The proceeds of such Revolving Credit Loans shall be immediately delivered to
the Swingline Lender (and not to the Borrower) and applied to repay the Refunded
Swingline Loans. On the day such Revolving Credit Loans are made, the Swingline
Lender's Applicable Percentage of the Refunded Swingline Loans shall be deemed
to be paid with the proceeds of a Revolving Credit Loan made by the Swingline
Lender and such portion of the Swingline Loans deemed to be so paid shall no
longer be outstanding as Swingline Loans and shall be outstanding as Revolving
Credit Loans of Lenders. The Borrower authorizes the Administrative Agent and
the Swingline Lender to charge the Borrower's account with the Administrative
Agent (up to the amount available in such account) in order to pay immediately
to the Swingline Lender the
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amount of such Refunded Swingline Loans to the extent amounts received from
Lenders, including amounts deemed to be received from the Swingline Lender, are
not sufficient to repay in full such Refunded Swingline Loans. If any portion of
any such amount paid (or deemed to be paid) to the Swingline Lender should be
recovered by or on behalf of the Borrower from the Swingline Lender in
bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of
the amount so recovered shall be ratably shared among all Lenders in the manner
contemplated by Section 2.14. Subject to the proviso contained in the first
sentence of the preceding paragraph (c) and to the compliance by the Swingline
Lender with the provisions of subparagraph (g) below, each Lender's obligation
to make the Revolving Credit Loans referred to in this paragraph shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swingline Lender, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of an Event
of Default or a Default, except to the extent that a Lender notified the
Swingline Lender in writing that a Default or Event of Default has occurred and
is continuing, at least one Business Day prior to the date that such Swingline
Loan was made to the Borrower; (C) any adverse change in the condition
(financial or otherwise) of any Loan Party; (D) any breach of this Agreement by
any party hereto; or (E) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. Nothing in this Section 2.3(d)
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that the Borrower or the
Swingline Lender may have against any Lender as a result of any default by such
Lender hereunder.
(e) A copy of each notice given by the Swingline Lender
or the Administrative Agent pursuant to this Section 2.3 shall be promptly
delivered by the Swingline Lender to the Administrative Agent and the Borrower.
Upon the making of a Revolving Credit Loan by a Lender pursuant to this Section
2.3, the amount so funded shall no longer be owed in respect of Swingline Loans.
(f) If as a result of any bankruptcy or similar
proceeding, Revolving Credit Loans are not made pursuant to Section 2.3(c) in
amounts sufficient to repay any amounts owed to the Swingline Lender as a result
of a nonpayment of outstanding Swingline Loans, each Revolving Credit Lender
agrees to purchase, and shall be deemed to have purchased, a participation in
such outstanding Swingline Loans in an amount equal to its Applicable Percentage
of the unpaid amount together with accrued interest thereon. Upon one Business
Day's notice from the Swingline Lender, each Revolving Credit Lender shall
deliver to the Swingline Lender an amount equal to its respective participation
in same day funds at the office of the Swingline Lender in New York, New York.
In order to evidence such participation each Revolving Credit Lender agrees to
enter into a participation agreement at the request of the Swingline Lender in
form and substance reasonably satisfactory to all parties. In the event any
Lender fails to make available to the Swingline Lender the amount of such
Revolving Credit Lender's participation as provided in this Section 2.3(f), the
Swingline Lender shall be entitled to recover such amount on demand from such
Revolving Credit Lender together with interest at a rate determined by the
Swingline Lender to represent its cost of overnight or short-term funds (which
determination shall be conclusive absent manifest error) for two Business Days
and thereafter at the Alternate Base Rate.
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(g) Notwithstanding anything herein to the contrary, the
Swingline Lender shall not make any Swingline Loans at any time the Swingline
Lender is aware that the conditions to the making of such Swingline Loan set
forth in Section 4.1 have not been satisfied unless such conditions shall have
been waived in accordance with this Agreement.
(h) Within the limits set forth above, the Borrower may
borrow, pay or prepay and reborrow Swingline Loans on or after the Closing Date
and prior to the Revolving Credit Maturity Date, subject to the terms,
conditions and limitations set forth herein.
SECTION 2.4 Evidence of Debt; Repayment of Loans and Term Notes. (a)
The outstanding principal balance of (i) each Term Note shall be payable on the
Term Note Maturity Date; (ii) each Revolving Credit Loan shall be payable on the
Revolving Credit Maturity Date and (iii) each Swingline Loan shall be payable no
later than five (5) Business Days after the advance thereof.
(b) Each Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the Indebtedness to such Lender
resulting from each Loan made by such Lender and each Term Note purchased by
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement and the
Notes.
(c) The Administrative Agent, in this regard on behalf of
the Borrower, shall maintain the Register pursuant to Section 9.4(c) and an
account for each Lender in which it will record (i) the amount of each Loan made
hereunder whether or not evidenced by a Note, the Type of each Loan made and the
Interest Period (if any) applicable thereto, (ii) the amount of each Term Note
purchased pursuant to the terms of this Agreement or assigned pursuant to the
terms hereof, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts
maintained pursuant to paragraph (b) and (c) of this Section 2.4 shall be prima
facie evidence of the existence and amounts of the obligations therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent to
maintain such accounts or any error therein shall not in any manner affect the
obligations of the Borrower to repay the Loans and the Term Notes in accordance
with their terms.
(e) Notwithstanding any other provision of this
Agreement, in the event any Lender shall request and receive a Note as provided
in Section 9.4(g) or otherwise, the interests represented by that Note shall at
all times (including after any assignment of all or part of such interests
pursuant to Section 9.4) be represented by one or more Notes payable to the
payee named therein or its registered assigns.
SECTION 2.5 Fees. (a) The Borrower agrees to pay to each Revolving
Credit Lender, through the Administrative Agent, on the last day of each
calendar month in each year, commencing with the last day of the calendar month
in which the Closing Date occurs, and on
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the date on which the Revolving Credit Commitments of all Revolving Credit
Lenders shall be terminated as provided herein, a commitment fee (a "Commitment
Fee") on the average daily unused amount of the Revolving Credit Commitment of
such Revolving Credit Lender during such calendar month (or other period
commencing with the date of acceptance by the Borrower of the Commitments of
such Revolving Credit Lender or ending with the date on which the last of the
Commitments of such Revolving Credit Lender shall be terminated) at a rate per
annum equal to 0.50%. All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 360 days. For the purpose of
calculating any Revolving Credit Lender's Commitment Fee, the outstanding
Swingline Loans during the period for which such Revolving Credit Lender's
Commitment Fee is calculated shall be deemed to be zero. The Commitment Fee due
to each Revolving Credit Lender shall commence to accrue on the date of
acceptance by the Borrower of the Revolving Credit Commitment of such Revolving
Credit Lender and shall cease to accrue on the date on which the Revolving
Credit Commitment of such Revolving Credit Lender shall be terminated as
provided herein.
(b) The Borrower from time to time agrees to pay (i) to
each Revolving Credit Lender, through the Administrative Agent, on the last day
of each calendar month in each year, commencing with the calendar month in which
the Closing Date occurs, and on the date on which the Revolving Credit
Commitments of all Revolving Credit Lenders shall be terminated as provided
herein, a fee (an "L/C Participation Fee") on such Revolving Credit Lender's
Applicable Percentage of the average daily aggregate Letter of Credit Exposure,
during such calendar month (or other period commencing with the date of
acceptance by the Borrower of the Commitments of such Revolving Credit Lender or
ending with the date on which the last of the Commitments of such Revolving
Credit Lender shall be terminated) at a rate per annum, calculated on a daily
basis, equal to the Applicable Margin for Revolving Credit Loans that are
Eurodollar Loans, provided that if an Event of Default has occurred and is
continuing, such rate shall be increased to two percent (2%) per annum above the
Applicable Margin for Eurodollar Loans; and (ii) to the Fronting Bank, the fees
separately agreed upon by the Borrower and the Fronting Bank plus, in connection
with the issuance, amendment or transfer of any such Letter of Credit or any
Letter of Credit Disbursement thereunder, the Fronting Bank's customary
documentary and processing charges (collectively, the "Fronting Bank Fees"). All
L/C Participation Fees and Fronting Bank Fees that are payable on a per annum
basis shall be computed on the basis of the actual number of days elapsed in a
year of 360 days.
(c) The Borrower agrees to pay to the Lead Arranger, for
its account, the fees set forth in the letter agreement dated September 30,
2003, among Holdings, the Borrower, and the Lead Arranger at the times and in
the amounts set forth therein, and the Borrower agrees to pay to the
Administrative Agent, for its account, the fees set forth in the letter
agreement dated ______________, 2003, among Holdings, the Borrower, and the
Administrative Agent at the times and in the amounts set forth therein (the
"Agent Fees").
(d) All Fees shall be paid on the dates due, in
immediately available funds, to the Administrative Agent for distribution, if
and as appropriate, among the Lenders, except that the Fronting Bank Fees shall
be paid directly to the Fronting Bank. Once paid, none of the Fees shall be
refundable under any circumstances.
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SECTION 2.6 Interest on Loans and Term Notes. (a) The Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, when
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate equal to the Alternate Base Rate plus the Applicable
Margin.
(b) Subject to the provisions of Section 2.7, the
Revolving Credit Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate equal to the Adjusted LIBO Rate for the Interest Period in
effect for such Borrowing plus the Applicable Margin.
(c) The Term Notes shall bear interest at the Term Note
Rate.
(d) Interest on each Loan and on each Term Note shall be
payable on the Interest Payment Dates applicable to such Loan and such Term Note
except as otherwise provided in this Agreement. The applicable Alternate Base
Rate or Adjusted LIBO Rate for each Interest Period or day within an Interest
Period, as the case may be, shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error. The Administrative
Agent shall give the Borrower prompt notice of each such determination.
(e) Upon the occurrence and during the continuation of an
Event of Default, the outstanding principal amount of all Loans and all Term
Notes then outstanding shall bear interest from and including the date of the
occurrence of such Event of Default to, but excluding, the date when no Event of
Default shall be continuing, at a rate per annum equal to two percent (2%) per
annum above the rate otherwise in effect (the "Default Rate").
SECTION 2.7 Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Eurodollar Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Loan during such Interest Period, or that reasonable
means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing shall be deemed to
be a request for an ABR Borrowing. Each determination by the Administrative
Agent hereunder shall be conclusive absent manifest error.
SECTION 2.8 Termination and Reduction of Commitments. (a) The Revolving
Credit Commitments shall be automatically and permanently terminated at 3:00
p.m., New York City time, on the Revolving Credit Maturity Date.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, the Borrower may at
any time in whole permanently
38
terminate, or from time to time in part permanently reduce, any of the Revolving
Credit Commitments; provided, however, that (i) each partial reduction of any
Commitments shall be in a minimum amount of $1,000,000 and integral multiples of
$500,000 in excess thereof (or, if less, the remaining amount of the applicable
Commitments) and (ii) each reduction or termination of the Revolving Credit
Commitments prior to the Revolving Credit Maturity Date shall require the prior
written consent of holders of 66 2/3% of the Term Notes.
(c) The Revolving Credit Commitments shall be
automatically and permanently reduced by the amount of any prepayment of
Revolving Credit Exposure to the extent required by Section 2.10 (or by the
amount of any prepayment of Revolving Credit Exposure that would have been
required to be so applied if Revolving Credit Exposure equal to such amount had
been outstanding).
(d) Each reduction in the Commitments hereunder shall be
made ratably among the relevant Lenders in accordance with their respective
applicable Commitments. The Borrower shall pay to the Administrative Agent for
the account of the Lenders, on the date of each termination or reduction, the
Commitment Fees and, to the extent applicable, L/C Participation Fees on the
amount of the Commitments so terminated or reduced accrued to but excluding the
date of such termination or reduction.
SECTION 2.9 Voluntary Prepayments. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing of Loans or Term
Notes, in whole or in part, upon at least three Business Days' prior written or
telecopy notice (or telephone notice promptly confirmed by written or telecopy
notice) to the Administrative Agent; provided, however, that each partial
prepayment (other than of a Swingline Loan) shall be in an amount which is in a
minimum amount of $1,000,000 and integral multiples of $500,000 in excess
thereof (or, if less, the aggregate outstanding amount which remains
outstanding). Each prepayment of Term Notes under this Section 2.9 shall be
accompanied by the corresponding Term Note Make-Whole Amount determined with
respect to the amount so prepaid.
(b) In the event of any termination of the Revolving
Credit Commitments, the Borrower shall on the date of such termination repay or
prepay all its outstanding Swingline Loans and Revolving Credit Borrowings,
reduce the Letter of Credit Exposure to zero and cause all Letters of Credit to
be canceled and returned to the Fronting Bank. In the event of any partial
reduction of the Revolving Credit Commitments, then (i) at or prior to the
effective date of such reduction, the Administrative Agent shall notify the
Borrower, the Swingline Lender and the Revolving Credit Lenders of the Total
Revolving Credit Exposure and (ii) if after giving effect to such reduction, the
Total Revolving Credit Exposure would exceed the Total Revolving Credit
Commitments, then the Borrower shall, on the date of such reduction, as
applicable, repay or prepay Revolving Credit Borrowings or repay or prepay
Swingline Loans or reduce the Letter of Credit Exposure (which for purposes of
this clause (ii) may include cash collateralization of Letter of Credit Exposure
pursuant to arrangements satisfactory to Administrative Agent), in an aggregate
amount sufficient to eliminate such excess.
SECTION 2.10 Mandatory Prepayments.
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(a) On the date of any termination or reduction of the
Revolving Credit Commitments, and on any date that the Total Revolving Credit
Exposure exceeds the Total Revolving Credit Commitment, the Borrower shall pay
or prepay so much of the Revolving Credit Borrowings and Swingline Loans, and
then shall deposit cash collateral with the Administrative Agent for Letter of
Credit Exposure in a manner consistent with the terms of Section 2.18(k), as
shall be necessary in order that the Total Revolving Credit Exposure does not
exceed the Total Revolving Credit Commitments.
(b) Upon the receipt of any Asset Sale Proceeds,
Insurance Proceeds, Debt Offering Proceeds, Unamortized Contract Value Proceeds
and Equity Offering Proceeds, the Borrower shall prepay the Obligations by an
amount equal to 100% of such Asset Sale Proceeds, Insurance Proceeds, Debt
Offering Proceeds, Unamortized Contract Value Proceeds and Equity Offering
Proceeds, provided, however, that if IDSs are issued after the Closing Date at a
time when no Default or Event of Default shall have occurred and be continuing
immediately before or after giving effect thereto and no Interest Deferral
Period is in effect, then the Borrower shall (i) first deposit Equity Offering
Proceeds from the issuance of such IDSs into the Cash Collateral Account to the
extent of the Cash Collateral Shortfall Amount after giving effect to the new
Holdings Subordinated Notes issued as a part of such IDSs and (ii) then prepay
the Obligations by an amount equal to 50% of (A) the net cash proceeds of the
new Holdings Subordinated Notes issued as part of such IDSs, less (B) the funds
deposited in the Cash Collateral Account pursuant to clause (i) of this proviso,
and Holdings and the Borrower shall be permitted to retain the balance;
provided, further, however, that that if Equity Offering Proceeds are raised
other than from the issuance of additional IDSs at a time when no Default or
Event of Default shall have occurred and be continuing immediately before or
after giving effect to the event that gave rise to such Equity Offering Proceeds
and no Interest Deferral Period is in effect, then the percentage of Equity
Offering Proceeds required to be applied to the Obligations shall be reduced
from 100% to 50%.
(c) During each Dividend Suspension Period, the Borrower
shall prepay the Obligations on each Dividend Payment Date by an amount equal to
100% of the Distributable Cash for the Monthly Fiscal Period most recently ended
for which a Monthly Report has been delivered.
(d) During each Interest Deferral Period, the Borrower
shall prepay the Obligations on each Subordinated Note Interest Payment Date by
an amount equal to (i) 75% of the interest payable on the Holdings Subordinated
Notes but for the Interest Deferral Period, to the extent of Available Cash for
the most recently ended Monthly Fiscal Period for which a Monthly Report has
been delivered, plus (ii) 100% of the Distributable Cash for such Monthly Fiscal
Period.
(e) Upon the occurrence of an Event of Default, all or a
portion of the funds in the Dividend/CapEx Funding Account, the CapEx Funding
Account, the Cash Collateral Account and the Existing Subordinated Notes Cash
Collateral Account shall, at the election of the Required Lenders with notice to
the Administrative Agent, but without further notice or instruction to the
Borrower, be applied by the Administrative Agent to the prepayment of the
Obligations.
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(f) Upon delivery of the annual audited financial
statements of Holdings and its Subsidiaries pursuant to Section 5.4(c) for each
Annual Fiscal Period, commencing with the Annual Fiscal Period 2004, the
Borrower shall prepay the Obligations by an amount equal to 50% of the Annual
Excess Cash Flow for such Annual Fiscal Period; provided, however, that if no
Default has occurred and is continuing, no Interest Deferral Period is in effect
and the Borrower is in compliance with the financial ratios set forth in Section
6.18 as of the last day of such Annual Fiscal Period and the most recently ended
Monthly Fiscal Period for which the Borrower is required to have delivered a
Monthly Report, then the Borrower shall prepay the Obligations by an amount
equal to 50% of the excess, if any, of (i) the Annual Excess Cash Flow for such
Annual Fiscal Period over (ii) the amount, if any, deposited into the CapEx
Funding Account pursuant to Section 2.22 for such Annual Fiscal Period;
provided, further, however, that if the Borrower withdraws any funds from the
CapEx Funding Account other to make Capital Expenditures promptly after such
withdrawal, then the Borrower shall immediately prepay the Obligations by an
amount equal to 50% of the funds so withdrawn from the CapEx Funding Account.
(g) All prepayments of the Obligations required in
clauses (b) through (f) above shall be applied ratably to the Term Notes
(subject to the provisions of paragraph (i) below), the related Term Note
Make-Whole Amount (if an Event of Default has occurred and is continuing or an
Interest Deferral Period is in effect) and the outstanding Revolving Credit
Exposure; the Revolving Credit Commitments shall not be reduced as a result of
prepayments under clauses (b) through (f) unless an Event of Default has
occurred and is continuing, in which case the prepayment amount allocated to the
Revolving Credit Exposure shall result in a concurrent reduction in the
Revolving Credit Commitments. Any prepayments applied to Revolving Credit
Exposure shall be allocated first to repay Swingline Loans, then to repay
Revolving ABR Loans, then to repay Revolving Eurodollars Loans and then to cash
collateralize Letter of Credit Exposure in the manner described in Section 2.18.
(h) Upon receipt of any proceeds or any Annual Excess
Cash Flow referred to in clauses (b) through (f), the Administrative Agent shall
notify the Lenders of the receipt of such proceeds on the Business Day such
proceeds are received, together with the calculation of Term Note Make-Whole
Amount, if appropriate, and each Lender's pro rata share of such prepayment (the
"Prepayment Notice"), and except as provided in paragraph (i) below, shall
promptly apply such proceeds in the manner set forth in paragraph (g) above. All
prepayments under this Section 2.10 shall be accompanied by accrued interest on
the principal amount being prepaid to but excluding the date of payment. Each
prepayment of Term Notes required under this Section 2.10 when an Event of
Default has occurred and is continuing or during an Interest Deferral Period
shall be accompanied by the corresponding Term Note Make-Whole Amount determined
with respect to the amount so prepaid. All prepayments and reductions under this
Section 2.10 shall be without premium or penalty except as contemplated in the
preceding sentence and pursuant to Section 2.13.
(i) If no Event of Default has occurred and is continuing
and no Interest Deferral Period is in effect, each Term Lender shall have the
right not to accept its ratable share of any prepayment (a "Waivable
Prepayment") and shall be deemed to have exercised such right unless it gives
written notice to the Borrower and Administrative Agent of its election to
accept its ratable share of such Waivable Prepayment no later than five (5)
41
Business Days after the Administrative Agent delivers the Prepayment Notice. To
the extent that any Term Lender elects not to accept its ratable share of a
Waivable Prepayment, such share of the Waivable Prepayment shall be offered
ratably to the other Term Lenders that have accepted such Waivable Prepayment
and the Revolving Credit Lenders based upon their Revolving Credit Exposure
(with no reduction in the Revolving Credit Commitments). If no Event of Default
has occurred and is continuing and no Interest Deferral Period is in effect, the
application of any prepayment by the Administrative Agent shall be made on the
earlier of (i) the sixth Business Day immediately following delivery of the
Prepayment Notice to the Lenders and (ii) the date that all Term Lenders have
notified the Administrative Agent in writing of whether they accept or reject
their portion of the Waivable Prepayment, and payments that are otherwise
ratable to the Term Lenders shall be made to the Term Lenders that have accepted
their ratable shares of any Waivable Prepayment, ratably based on the aggregate
share of the Waivable Prepayment that each Term Lender has accepted.
(j) The Revolving Credit Exposure of the Lenders is
subject to reduction to zero during at least one consecutive thirty (30) day
period during each Annual Fiscal Period beginning with the 2004 Annual Fiscal
Period (the "Annual Clean-Up"); provided, however, that (a) any amounts advanced
prior to the commencement of an Annual Clean-Up to fund Consolidated Service
Contract Capital Expenditures may remain outstanding during an Annual Clean-Up,
(b) any Letters of Credit outstanding as of the commencement of an Annual
Clean-Up shall be permitted to remain outstanding during the Annual Clean-Up,
(c) the Borrower shall be entitled to request a Revolving Credit Borrowing
during such period to fund additional Consolidated Service Contract Capital
Expenditures and (d) the Borrower shall be entitled to request the issuance of a
Letter of Credit.
SECTION 2.11 Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender or the
Fronting Bank in respect of any Letter of Credit or of the principal of or
interest on any Eurodollar Loan made by such Lender or any Fees or other amounts
payable hereunder (other than changes in respect of (i) the rate of tax imposed
on the overall net income of such Lender or the Fronting Bank and (ii) any
Covered Taxes described in Section 2.17), or shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets or
deposits with or for the account of or credit extended by or, in the case of the
Letters of Credit, participated in by such Lender (except any such reserve
requirement which is reflected in the Adjusted LIBO Rate) or the Fronting Bank
or shall impose on such Lender or the Fronting Bank or the interbank eurodollar
market any other condition affecting this Agreement, any Letter of Credit (or
any participation with respect thereto), the Letter of Credit Exposure, the
Letter of Credit Commitment or any Eurodollar Loans of such Lender or the
Fronting Bank, and the result of any of the foregoing shall be to increase the
cost to such Lender or the Fronting Bank of making or maintaining its Letter of
Credit Exposure, its Letter of Credit Commitment or any Eurodollar Loan (or, in
the case of the Fronting Bank, of making any payment under any Letter of Credit)
or to reduce the amount of any sum received or receivable by such Lender or the
Fronting Bank hereunder (whether of principal, interest or otherwise) by an
amount deemed by such Lender or the Fronting Bank to be material, then from time
to time the Borrower will pay to
42
such Lender or the Fronting Bank upon demand such additional amount or amounts
as will compensate such Lender or the Fronting Bank for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Fronting Bank shall have
determined that the adoption after the date hereof of any law, rule, regulation
or guideline regarding capital adequacy, or any change after the date hereof in
any of the foregoing or in the interpretation or administration of any of the
foregoing by any Governmental Authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or any lending office of such Lender) or the Fronting Bank or any
Lender's or the Fronting Bank's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) made or
issued after the date hereof by any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's or the Fronting Bank's capital or on the capital of such Lender's or
the Fronting Bank's holding company, if any, as a consequence of this Agreement
or its obligations pursuant hereto to a level below that which such Lender or
the Fronting Bank or such Lender's or the Fronting Bank's holding company would
have achieved but for such adoption, change or compliance (taking into
consideration such Lender's or the Fronting Bank's policies and the policies of
such Lender's or the Fronting Bank's holding company with respect to capital
adequacy) by an amount deemed by such Lender or the Fronting Bank to be
material, then from time to time the Borrower shall pay to such Lender or the
Fronting Bank upon demand such additional amount or amounts as will compensate
such Lender or the Fronting Bank or such Lender's or the Fronting Bank's holding
company for any such reduction suffered.
(c) A certificate of each Lender or the Fronting Bank
setting forth such amount or amounts as shall be necessary to compensate such
Lender or the Fronting Bank or its holding company as specified in paragraphs
(a) and (b) above, as the case may be, shall be delivered to the Borrower
through the Administrative Agent and shall be conclusive absent manifest error.
The Borrower shall pay each Lender or the Fronting Bank the amount shown as due
on any such certificate delivered by it within ten (10) days after its receipt
of the same.
(d) Promptly after any Lender or the Fronting Bank has
determined, in its sole judgment, that it will make a request for increased
compensation pursuant to this Section 2.11, such Lender or the Fronting Bank
will notify the Borrower thereof. Failure on the part of any Lender or the
Fronting Bank so to notify the Borrower or to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's or the Fronting Bank's right to demand compensation with respect
to such period or any other period; provided that the Borrower shall not be
under any obligation to compensate any Lender or the Fronting Bank under
paragraph (a) or (b) above with respect to increased costs or reductions with
respect to any period prior to the date that is six months prior to such request
if such Lender or the Fronting Bank knew or could reasonably have been expected
to be aware of the circumstances giving rise to such increased costs or
reductions and of the fact that such circumstances would in fact result in a
claim for increased compensation by reason of such increased costs or
reductions; provided further that the foregoing limitation shall not apply to
any increased costs or reductions arising out of the retroactive application of
any law, regulation, rule, guideline or directive as aforesaid within such six
month period. The protection of this Section 2.11 shall be available to each
43
Lender and the Fronting Bank regardless of any possible contention as to the
invalidity or inapplicability of the law, rule, regulation, guideline or other
change or condition which shall have occurred or been imposed.
(e) In the event any Lender or the Fronting Bank delivers
a notice pursuant to paragraph (c) above, the Borrower may require, at the
Borrower's expense and subject to Section 2.13, such Lender or the Fronting Bank
to assign, at par plus accrued interest, fees and Term Note Make-Whole Amounts,
without recourse (in accordance with Section 9.4) all its interests, rights and
obligations hereunder (including, in the case of a Lender, all of its
Commitments and the Loans at the time owing to it and participations in Letters
of Credit held by it and its obligations to acquire such participations) to a
financial institution specified by the Borrower; provided that (i) such
assignment shall not conflict with or violate any law, rule or regulation or
order of any court or other Governmental Authority, (ii) the Borrower shall have
received the written consent of the Administrative Agent (which consent shall
not be unreasonably withheld) and the Fronting Bank to such assignment, (iii)
the Borrower shall have paid to the assigning Lender or the Fronting Bank all
monies accrued and owing hereunder to it (including pursuant to this Section
2.11) and (iv) in the case of a required assignment by the Fronting Bank, all
outstanding Letters of Credit issued by the Fronting Bank shall be canceled and
returned to the Fronting Bank.
SECTION 2.12 Change in Legality. (a) Notwithstanding any other
provision herein, if the adoption of or any change in any law or regulation or
in the interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any Lender
to make or maintain any Eurodollar Loan or to give effect to its obligations as
contemplated hereby with respect to any Eurodollar Loan, then, by written notice
to the Borrower and to the Administrative Agent, such Lender may:
(i) if it is a Revolving Credit Lender, declare that
Eurodollar Loans will not thereafter be made by it hereunder, whereupon
any request by the Borrower for a Eurodollar Borrowing shall, as to
such Revolving Credit Lender only, be deemed a request for an ABR Loan
unless such declaration shall be subsequently withdrawn; and
(ii) as to any Revolving Credit Lender require that all
outstanding Eurodollar Loans made by it be converted to ABR Loans, in
which event all such Eurodollar Loans shall be automatically converted
to ABR Loans as of the effective date of such notice as provided in
paragraph (b) below.
In the event any Revolving Credit Lender shall exercise its rights under
subparagraphs (i) and (ii) above, all payments and prepayments of principal
which would otherwise have been applied to repay the Eurodollar Loans that would
have been made by such Lender or the converted Eurodollar Loans of such Lender
shall instead be applied to repay the ABR Loans made by such Lender in lieu of,
or resulting from the conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.12, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Loan, if lawful,
on the last day of the Interest
44
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt by the Borrower.
SECTION 2.13 Indemnity. The Borrower shall indemnify each Lender
against any loss or expense (including taxes, except in the case of Section
2.13(c) below) that such Lender may sustain or incur as a consequence of its
obligation to make Eurodollar Loans arising as a result of (a) any failure by
the Borrower to fulfill on the date of any Borrowing or proposed Borrowing
hereunder the applicable conditions set forth in Article IV, (b) any failure by
the Borrower to borrow or to refinance, convert or continue any Loan hereunder
after irrevocable notice of such Borrowing, refinancing, conversion or
continuation has been given pursuant hereto, (c) any payment, prepayment or
conversion of a Eurodollar Loan required by any other provision of this
Agreement or otherwise made or deemed made on a date other than the last day of
the Interest Period applicable thereto, (d) any default in payment or prepayment
of the principal amount of any Loan or any part thereof or interest accrued
thereon, as and when due and payable (at the due date thereof, whether by
scheduled maturity, acceleration, irrevocable notice of prepayment or otherwise)
or (e) the occurrence of any Event of Default, including, in each such case, any
loss or reasonable expense sustained or incurred or to be sustained or incurred
in liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall exclude loss of margin hereunder but shall include an
amount equal to the excess, if any, as reasonably determined by such Lender, of
(i) its cost of obtaining the funds for the Loan being paid, prepaid, converted
or not borrowed, converted or continued (assumed to be the Adjusted LIBO Rate
applicable thereto) for the period from the date of such payment, prepayment,
conversion or failure to borrow, convert or continue to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably determined
by such Lender) that would be realized by such Lender in reemploying the funds
so paid, prepaid, converted or not borrowed, converted or continued for such
period or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts which such Lender is entitled to receive
pursuant to this Section 2.13 (and the reasons therefor) shall be delivered to
the Borrower through the Administrative Agent and shall be conclusive absent
manifest error.
SECTION 2.14 Pro Rata Treatment. Except as required under Section 2.12
and subject to Section 2.10, each Borrowing, each payment or prepayment of
principal of any Borrowing, each payment of interest on the Loans, Term Notes
and Reimbursement Obligations, each payment of the Commitment Fees or L/C
Participation Fees, each reduction of the Revolving Credit Commitments and each
refinancing of any Borrowing with, conversion of any Borrowing to or
continuation of any Borrowing as a Borrowing of any Type shall be allocated
(except in the case of Swingline Loans) pro rata among the Lenders in accordance
with their respective applicable Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their applicable outstanding Loans, Term Notes or participations in Letter of
Credit Disbursements, as applicable). Each Lender agrees that in computing such
Lender's portion of any Borrowing of Loans, Term Notes or participations in
Letter of Credit Disbursements, the Administrative Agent may, in its discretion,
round each Lender's percentage of such Borrowing of Loans, Term Notes or
45
participations in Letter of Credit Disbursements, computed to the next higher or
lower whole dollar amount.
SECTION 2.15 Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, obtain
payment (voluntary or involuntary) in respect of any Loan, any Term Note or any
Reimbursement Obligation as a result of which the unpaid principal portion of
its Revolving Credit Exposure or Term Notes shall be proportionately less than
the unpaid principal portion of the Revolving Credit Exposure and Term Notes of
any other Lender, it shall be deemed simultaneously to have purchased from such
other Lender at face value, and shall promptly pay to such other Lender the
purchase price for, an interest in the Revolving Credit Exposure or Term Notes
of such other Lender, so that the aggregate unpaid principal amount of the
Revolving Credit Exposure or Term Notes and interests in Revolving Credit
Exposure and Term Notes held by each such Lender shall be in the same proportion
to the aggregate unpaid principal amount of all Revolving Credit Exposure and
Term Notes then outstanding as the principal amount of its Revolving Credit
Exposure and Term Notes under such Commitments prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal amount
of all such Revolving Credit Exposure and Term Notes outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.15 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. The Borrower expressly consents to the
foregoing arrangements and agrees that any Lender holding an interest in any
Revolving Credit Exposure or Term Note deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to, or Letter of
Credit Disbursement directly for the benefit of, or purchased a Term Note
directly from, the Borrower in the amount of such interest.
SECTION 2.16 Payments. (a) The Borrower shall make each payment without
set-off or counterclaim (including principal of or interest on any Loans, Term
Notes, Reimbursement Obligations or any Fees or other amounts) required to be
made by it hereunder and under any other Loan Document not later than 12:00
noon, New York City time, on the date when due in Dollars to the Administrative
Agent at its offices at [____________________________], Attention: __________,
in immediately available funds, for credit to KeyBank, ABA Number [ ], Account
Number [ ]. The Administrative Agent shall distribute such payments to the
Lenders and the Fronting Bank promptly upon receipt in like funds as received.
(b) Whenever any payment (including principal of or
interest on any Loans, Term Notes or Reimbursement Obligations or any Fees or
other amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day (except in the case of payment of
principal of a Eurodollar Borrowing if the effect of such extension would be
46
to extend such payment into the next succeeding month, in which event such
payment shall be due on the immediately preceding Business Day), and such
extension of time shall in such case be included in the computation of interest
or Fees, if applicable.
SECTION 2.17 Taxes. (a) Any and all payments by the Borrower to the
Administrative Agent, the Fronting Bank or the Lenders hereunder or under the
other Loan Documents shall be made, in accordance with Section 2.16, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto (the "Taxes"), excluding (i) in the case of each Lender, the Fronting
Bank and the Administrative Agent, taxes that would not be imposed but for a
connection between such Lender, the Fronting Bank or the Administrative Agent
(as the case may be) and the jurisdiction imposing such tax, other than a
connection arising solely by virtue of the activities of such Lender, the
Fronting Bank or the Administrative Agent (as the case may be) pursuant to or in
respect of any Loan Document, including entering into, lending money or
extending credit pursuant to, receiving payments under, or enforcing, such Loan
Document, and (ii) in the case of each Lender, the Fronting Bank and the
Administrative Agent, any United States withholding taxes payable with respect
to any payments made hereunder or under the other Loan Documents under laws
(including any statute, treaty, ruling, determination or regulation) in effect
on the Initial Date (as hereinafter defined) applicable to such Lender, the
Fronting Bank or the Administrative Agent, as the case may be, other than any
United States withholding taxes payable solely as a result of any change in such
laws occurring after the Initial Date (all such non-excluded Taxes, the "Covered
Taxes"). For purposes of this Section 2.17, the term "Initial Date" shall mean
(i) in the case of the Administrative Agent, the Fronting Bank or any Lender,
the date on which such Person became a party to this Agreement and (ii) in the
case of any assignment, including any assignment by a Lender or the Fronting
Bank to a new lending office, the date of such assignment. If any Taxes shall be
required by law to be deducted from or in respect of any sum payable hereunder
or under any other Loan Document to any Lender, the Fronting Bank or the
Administrative Agent, (i) in the case of any Covered Taxes, the sum payable by
the Borrower shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.17) such Lender, the Fronting Bank or the Administrative
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law. The Borrower shall not, however, be required to pay any amounts pursuant to
clause (i) of the preceding sentence to any Lender, the Fronting Bank or the
Administrative Agent that is not a United States person as defined in Section
7701(a)(30) of the Code (a "Non-U.S. Lender") if such Lender, the Fronting Bank
or the Administrative Agent fails to comply with the requirements of paragraph
(f) and paragraph (g) of this Section 2.17.
(b) In addition, the Borrower agrees to pay any present
or future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender, the Fronting
Bank and the Administrative Agent for the full amount of Covered Taxes and Other
Taxes (including any
47
Covered Taxes or Other Taxes imposed by any jurisdiction on amounts payable
under this Section 2.17) paid by such Lender, the Fronting Bank or the
Administrative Agent, as the case may be, and any liability (including
penalties, interest and expenses including reasonable attorney's fees and
expenses) arising therefrom or with respect thereto whether or not such Covered
Taxes or Other Taxes were correctly or legally asserted. A certificate as to the
amount of such payment or liability prepared by a Lender (or Transferee), the
Fronting Bank or the Administrative Agent, absent manifest error, shall be
final, conclusive and binding for all purposes. Such indemnification shall be
made within 10 days after the date any Lender, the Fronting Bank or the
Administrative Agent, as the case may be, makes written demand therefor.
(d) Within 30 days after the date of any payment of
Covered Taxes or Other Taxes withheld by the Borrower in respect of any payment
to any Lender, the Fronting Bank or the Administrative Agent, the Borrower will
furnish to the Administrative Agent, at its address referred to in Section 9.1,
the original or a certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations contained in this
Section 2.17 shall survive the payment in full of the Obligations, the
expiration of the Letters of Credit and the termination of the Commitments.
(f) Each Non-U.S. Lender agrees that (i) at least 10 days
prior to the first Interest Payment Date following the Initial Date in respect
of the Fronting Bank or such Lender, it will (A) deliver to the Borrower and the
Administrative Agent (if appropriate) two duly completed copies of either United
States Internal Revenue Service Form W-8 BEN or W-8 ECI or successor applicable
form, as the case may be, certifying in each case that the Fronting Bank, such
Lender or the Administrative Agent, as the case may be, is entitled to receive
payments under this Agreement and the other Loan Documents payable to it without
deduction or withholding of any United States federal income taxes and backup
withholding taxes or is entitled to receive such payments at a reduced rate
pursuant to a treaty provision or (B) in the case of a Lender that is not a
"bank" within the meaning of Section 881(c)(3) of the Code, deliver to the
Borrower and the Administrative Agent (I) a statement under penalties of perjury
that such Lender (w) is not a "bank" under Section 881(c)(3)(A) of the Code, is
not subject to regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any Governmental Authority,
any application made to a rating agency or qualification for any exemption from
tax, securities law or other legal requirements, (x) is not a 10-percent
shareholder within the meaning of Section 881(c)(3)(B) of the Code, and (y) is
not a controlled foreign corporation receiving interest from a related person
within the meaning of Section 881(c)(3)(c) of the Code, (II) such factual
representations as the Borrower may reasonably request to allow the Borrower to
conclude that such Lender is not a "conduit entity" within the meaning of U.S.
Treasury Regulations Section 1.881-3 and (III) an Internal Revenue Service Form
W-8BEN; (ii) it will deliver to the Borrower and the Administrative Agent (if
appropriate) two further copies of such form or any successor applicable form or
other manner of certification on or before the date such form expires or becomes
obsolete and after the occurrence of any event requiring a change in the most
recent form previously delivered by such Non-U.S. Lender and (iii) it will
obtain such extensions of time for filing and complete such forms or
certifications
48
as may be reasonably requested by the Borrower or the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders any such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Each Person that shall become a participant pursuant to
Section 9.4 shall, upon the effectiveness of the related transfer, be required
to provide all the forms and statements required pursuant to this paragraph (f)
to the Lender from which the related participation shall have been purchased.
Unless the Borrower and the Administrative Agent have received forms,
certificates and other documents required by this Section 2.17(f) indicating
that payments hereunder or under this Agreement, any other Loan Document or the
Letters of Credit to or for the Fronting Bank or Lender not incorporated under
the laws of the United States or a state thereof are not subject to United
States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Administrative Agent shall withhold
such taxes from such payments at the applicable statutory rate.
(g) The Fronting Bank and any Lender claiming any
additional amounts payable pursuant to this Section 2.17 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document requested in writing by the Borrower or to change the
jurisdiction of its applicable lending office, if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts which would be payable or may thereafter accrue and would not, in the
sole good faith determination of the Fronting Bank or such Lender, be otherwise
disadvantageous to the Fronting Bank or such Lender.
(h) Nothing contained in this Section 2.17 shall require
any Lender or the Fronting Bank or the Administrative Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
SECTION 2.18 Letters of Credit Generally. (a) The Borrower may request
the issuance of a Letter of Credit, in a form reasonably acceptable to the
Administrative Agent and the Fronting Bank, appropriately completed, for the
account of the Borrower at any time and from time to time while the Revolving
Credit Commitments remain in effect for amounts up to an aggregate stated amount
not to exceed $35,000,000 at any time (the "Letter of Credit Sublimit"). All
Letters of Credit shall be denominated in U.S. Dollars. This Section 2.18(a)
shall not be construed to impose an obligation upon the Fronting Bank to issue
any Letter of Credit that is inconsistent with the terms and conditions of this
Agreement or that would result in Letters of Credit outstanding in an aggregate
stated amount at any time in excess of $35,000,000.
(b) In order to request the issuance of a Letter of
Credit (or to request that the Fronting Bank amend, renew or extend an existing
Letter of Credit), the Borrower shall deliver to the Fronting Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice substantially in the form of Exhibit
D-2 requesting the issuance of such Letter of Credit, or identifying any Letter
of Credit to be amended, renewed or extended, and specifying the date of
issuance, amendment, renewal or extension, the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) below), the amount of
such Letter of Credit to be issued, amended, renewed
49
or extended, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare such Letter of Credit or grant such
issuance, amendment, renewal or extension. Following receipt of such notice and
prior to the issuance, amendment, renewal or extension of any Letter of Credit
the Administrative Agent shall notify the Borrower and the Fronting Bank of the
amount of the Total Revolving Credit Exposure after giving effect to (i) the
issuance, amendment, renewal or extension of such Letter of Credit, (ii) the
issuance or expiration of any other Letter of Credit that is to be issued or
will expire prior to the requested date of issuance of such Letter of Credit and
(iii) the borrowing or repayment of any Revolving Credit Loans and Swingline
Loans that (based upon notices delivered to the Administrative Agent by the
Borrower) are to be borrowed or repaid prior to the requested date of issuance,
amendment, renewal or extension of such Letter of Credit. Each Letter of Credit
shall be issued, amended, renewed or extended subject to the terms and
conditions and relying on the representations and warranties of the Loan Parties
in the Loan Documents, and in any case only if, and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be deemed to
represent and warrant that, after giving effect to such issuance, amendment,
renewal or extension the Total Revolving Credit Exposure shall not exceed the
Total Revolving Credit Commitments in effect at such time. Any Letter of Credit
may be issued by the Fronting Bank through one or more of its affiliates, and in
the event of any such issuance, all references herein and in the other Loan
Documents to the term "Fronting Bank" shall, with respect to such Letter of
Credit, be deemed to refer to such affiliates, in such capacity, as the context
shall require.
(c) Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is three Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date; provided that a Letter of Credit shall not be issued
(nor shall a Letter of Credit be amended, renewed or extended) that would result
in the Total Revolving Credit Exposure exceeding the Total Revolving Credit
Commitment in effect at such time. Compliance with the foregoing proviso shall
be determined based upon the assumption that (i) each Letter of Credit remains
outstanding and undrawn in accordance with its terms until its expiration date
(taking into account any rights of renewal or extension that do not require
written notice by or consent of the Fronting Bank, in its sole discretion, in
order to effect such renewal or extension) and (ii) the Revolving Credit
Commitments will not be reduced pursuant to Section 2.8.
(d) By the issuance of a Letter of Credit and without any
further action on the part of the Fronting Bank or the Revolving Credit Lenders,
the Fronting Bank will grant to each Revolving Credit Lender, and each such
Lender will acquire from the Fronting Bank, a participation in such Letter of
Credit equal to such Revolving Credit Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit, effective
upon the issuance of such Letter of Credit. In consideration and in furtherance
of the foregoing, each Revolving Credit Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Fronting Bank, such Revolving Credit Lender's Applicable Percentage of each
Letter of Credit Disbursement made by the Fronting Bank under such Letter of
Credit and not reimbursed by the Borrower (or, if applicable, another party
pursuant to its obligations under any other Loan Document), on or before the
next Business Day as provided in paragraph (e) below, except to the extent that
(x) the Borrower is not obligated to
50
reimburse the Fronting Bank based upon the Fronting Bank's gross negligence or
willful misconduct or (y) after giving effect to such payment to the Fronting
Bank, the funded Revolving Credit Exposure of such Revolving Credit Lender would
exceed its Revolving Credit Commitment. Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit which were issued upon
satisfaction of all applicable conditions precedent is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever.
(e) If the Fronting Bank shall make any Letter of Credit
Disbursement in respect of a Letter of Credit, the Borrower shall pay to the
Administrative Agent, on or before the Business Day immediately following the
date of such Letter of Credit Disbursement, an amount equal to such Letter of
Credit Disbursement, in the currency in which the Letter of Credit Disbursement
was made. If the Borrower shall fail to pay any amount required to be paid under
this paragraph on or before such Business Day (or to cause payment thereof when
due pursuant to a Revolving Credit Borrowing), then the unpaid amount shall bear
interest, for each day from and including the date as of which the Letter of
Credit Disbursement was made to but excluding the date of payment, at a rate per
annum equal to the Default Rate (provided that the Default Rate shall not be
applicable until the first Business Day after the Borrower receives notice from
the Administrative Agent that such Letter of Credit Disbursement has been or
will be made), (iii) the Administrative Agent shall notify the Fronting Bank and
the Revolving Credit Lenders thereof, (iv) each Revolving Credit Lender shall
comply with its obligation under paragraph (d) above by wire transfer of
immediately available funds, in the same manner as provided in Section 2.2 with
respect to Loans made by such Revolving Credit Lender (and Section 2.2(e) shall
apply, mutatis mutandis, to the payment obligations of the Revolving Credit
Lenders) and (v) the Administrative Agent shall promptly pay to the Fronting
Bank amounts so received by it from the Revolving Credit Lenders. The
Administrative Agent shall promptly pay to the Fronting Bank on a pro rata basis
with respect to outstanding Letter of Credit Disbursements any amounts received
by it from the Borrower pursuant to this paragraph prior to the time that any
Revolving Credit Lender makes any payment pursuant to paragraph (d) above; any
such amounts received by the Administrative Agent thereafter shall be promptly
remitted by the Administrative Agent to the Revolving Credit Lenders that shall
have made such payments and to the Fronting Bank, as their interests may appear.
(f) The Borrower's obligations to reimburse Letter of
Credit Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter
of Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of Credit or
any Loan Document;
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(iii) the existence of any claim, setoff, defense or other
right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof
or any other Person may at any time have against the beneficiary under
any Letter of Credit, the Fronting Bank, the Administrative Agent or
any Lender (other than the defense of payment in accordance with the
terms of this Agreement or a defense based on the gross negligence or
willful misconduct of the Fronting Bank) or any other Person, whether
in connection with this Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a 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, provided that payment by the Fronting Bank shall not have
constituted gross negligence or willful misconduct of the Fronting
Bank;
(v) payment by the Fronting Bank under a Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, provided that payment by the
Fronting Bank shall not have constituted gross negligence or willful
misconduct of the Fronting Bank; and
(vi) any other act or omission to act or delay of any kind
of the Fronting Bank, the Lenders, the Administrative Agent or any
other Person or any other event or circumstance whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions
of this Section 2.18(f), constitute a legal or equitable discharge of
the Borrower's obligations hereunder, provided that such act or
omission shall not have constituted gross negligence or willful
misconduct of the Fronting Bank.
(g) The Fronting Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Fronting Bank shall as promptly as
possible give telephonic notification, confirmed by telecopy, to the
Administrative Agent and the Borrower of such demand for payment and whether the
Fronting Bank has made or will make a Letter of Credit Disbursement thereunder,
provided that any failure to give or delay in giving such notice shall not
relieve the Borrower of its obligation to reimburse the Fronting Bank and the
Lenders with respect to any such Letter of Credit Disbursement. The
Administrative Agent shall promptly give each Revolving Credit Lender notice
thereof.
(h) If the Fronting Bank shall make any Letter of Credit
Disbursement in respect of a Letter of Credit, then, unless the Borrower shall
reimburse such Letter of Credit Disbursement in full on such date, the unpaid
amount shall bear interest for the account of the Fronting Bank, for each day
from and including the date of such Letter of Credit Disbursement, to but
excluding the earlier of the date of payment or the date on which interest shall
commence to accrue thereon as provided in subparagraph (e) above, at the rate
that would apply to such amount if such amount were an ABR Loan.
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(i) Without limiting the generality of paragraph (f)
above, it is expressly understood and agreed that the absolute and unconditional
obligation of the Borrower hereunder to reimburse Letter of Credit Disbursements
will not be excused by the gross negligence or willful misconduct of the
Fronting Bank, except as otherwise expressly provided in paragraph (f). It is
understood that the Fronting Bank may accept documents that appear on their face
to be in order, without responsibility for further investigation in making any
payment under any Letter of Credit and, except as otherwise expressly provided
in said paragraph (f), (i) the Fronting Bank's exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all matters
set forth therein, including reliance on the amount of any draft presented under
such Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be insufficient in any
respect, if such document on its face appears to be in order, and whether or not
any other statement or any other document presented pursuant to such Letter of
Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever and (ii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Fronting Bank.
(j) The Fronting Bank may resign at any time by giving 45
days' prior written notice to the Administrative Agent, the Lenders and the
Borrower, and may be removed at any time by the Borrower or the Required Lenders
by notice to the Fronting Bank, the Administrative Agent, the Borrower (if the
removal is at the election of the Required Lenders) and the Lenders, subject in
each case to the appointment by the Required Lenders, with the consent of the
Borrower (not to be unreasonably withheld or delayed, and not required if an
Default or Event of Default has occurred and is continuing) of a replacement
Fronting Bank reasonably satisfactory to the Administrative Agent, provided,
that the Fronting Bank may not resign as to any Letter of Credit previously
issued by it. Subject to the next succeeding sentences of this paragraph (j),
upon the acceptance of any appointment as the Fronting Bank hereunder by a
successor Fronting Bank (which shall be a Lender), such successor shall succeed
to and become vested with all the interests, rights and obligations of the
retiring Fronting Bank and the retiring Fronting Bank shall be discharged from
its obligations to issue additional Letters of Credit hereunder. At the time
such removal or resignation shall become effective, the Borrower shall pay all
accrued and unpaid fees of the Fronting Bank, in its capacity as such, pursuant
hereto. The acceptance of any appointment as the Fronting Bank hereunder by a
successor Fronting Bank shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the Borrower, the Administrative Agent and
the Required Lenders, and, from and after the effective date of such agreement,
(i) such successor Fronting Bank shall have all the rights and obligations of
the previous Fronting Bank under this Agreement and the other Loan Documents and
(ii) references herein and in the other Loan Documents to the term "Fronting
Bank" shall be deemed to refer to such successor or to any previous Fronting
Bank, or to such successor and all previous Fronting Banks, as the context shall
require. After the resignation or removal of the Fronting Bank hereunder, the
retiring Fronting Bank shall remain a party hereto and shall continue to have
all the rights and obligations of a Fronting Bank under this Agreement and the
other Loan Documents with respect to Letters of Credit issued by it prior to
such resignation or removal (including the right to receive accrued and unpaid
fees, in its capacity as such), but shall not be required to issue additional
Letters of Credit.
53
(k) If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders of the Event of Default and the
Letter of Credit Exposure as of such date, deposit in an account with the
Administrative Agent, for the benefit of the Lenders, an amount in cash equal to
the Letter of Credit Exposure as of such date. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
Obligations. The Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits in Permitted Liquid
Investments, which investments shall be made at the option and sole discretion
of the Administrative Agent (provided that the Administrative Agent shall use
reasonable efforts to make such investments), such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall (i) automatically be applied by the
Administrative Agent to reimburse the Fronting Bank for Letter of Credit
Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of all Reimbursement Obligations at such time and (iii) if the
maturity of the Loans has been accelerated, be applied to satisfy the
Obligations. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.
SECTION 2.19 Cash Collateral Account. The Borrower shall deposit on the
Closing Date immediately available funds in the Cash Collateral Account from the
proceeds of the IDSs issued on the Closing Date in an amount equal to the then
Cash Collateral Minimum Balance. Upon the issuance of any IDSs after the Closing
Date, the Borrower shall immediately deposit additional immediately available
funds in the Cash Collateral Account such that the Cash Collateral Shortfall
Amount is zero, including without limitation, at least five months of interest
on the Holdings Subordinated Notes issued as part of such additional IDSs. The
Borrower shall also deposit additional immediately available funds in the Cash
Collateral Account on each Dividend Payment Date prior to the payment of any
Dividends to Holdings to the extent of any Cash Collateral Shortfall Amount.
Funds will be withdrawn from the Cash Collateral Account only by the
Administrative Agent upon request by the Required Lenders and to the extent
provided in the immediately following sentence, upon request by the Borrower,
and to the extent withdrawn such funds may be applied, at the sole discretion of
the Required Lenders, (i) to prepay the Obligations to the extent contemplated
in Section 2.10 or (ii) to pay interest on behalf of Holdings on the Holdings
Subordinated Notes and interest on Deferred Subordinated Note Interest. All
return on investment from the funds in the Cash Collateral Account shall remain
in the Cash Collateral Account and be subject to the terms of the Cash
Collateral Agreement, except that prior to the first anniversary of the Closing
Date, if no Default or Event of Default has occurred and is continuing, such
return on investments shall be distributed by the Administrative Agent to the
Borrower, promptly upon its request.
SECTION 2.20 Dividend/CapEx Funding Account. The Borrower may deposit
immediately available funds in the Dividend/CapEx Funding Account (x) from the
proceeds of the IDSs issued on the Closing Date and (y) up to 50% of Annual
Excess Cash Flow for each Annual Fiscal Period, commencing with the Annual
Fiscal Period 2004, upon the delivery of the annual audited financial statements
of Holdings and its Subsidiaries pursuant to Section 5.4(c) for such Annual
Fiscal Period. The Borrower may withdraw funds from the Dividend/CapEx
54
Funding Account if no Event of Default has occurred and is continuing to the
extent such funds are (i) distributed to Holdings to pay Dividends to the extent
otherwise permitted under Section 6.16, (ii) applied to pay Deferred
Subordinated Note Interest to the extent otherwise permitted under Section 6.16,
(iii) to make Capital Expenditures, (iv) deposited in the Cash Collateral
Account or (v) used for other general corporate purposes. The Administrative
Agent shall withdraw funds from the Dividend/CapEx Funding Account to the extent
contemplated in Section 2.10.
SECTION 2.21 Existing Subordinated Notes Cash Collateral Account. The
Borrower shall deposit on the Closing Date immediately available funds in the
Existing Subordinated Notes Cash Collateral Account from the proceeds of the
IDSs issued on the Closing Date in an amount equal to 105.625% of the Existing
Subordinated Notes outstanding on the Closing Date, plus the amount of interest
that will be payable after the Closing Date through and including March 1, 2004.
If no Event of Default has occurred and is continuing, funds will be withdrawn
from the Cash Collateral Account by the Administrative Agent at the request of
the Borrower on, or one Business Day prior, to March 1, 2004 for the purposes of
prepaying in full the Existing Subordinated Notes, and all accrued and unpaid
interest and premium thereon. All return on investment from the funds in the
Existing Subordinated Notes Cash Collateral Account shall remain in the Existing
Subordinated Notes Cash Collateral Account and be subject to the terms of the
Existing Subordinated Notes Cash Collateral Agreement. Upon payment in full of
the Existing Subordinated Notes, and all accrued and unpaid interest and premium
thereon, all funds remaining in the Existing Subordinated Notes Cash Collateral
Agreement shall be distributed by the Administrative Agent to the Borrower,
promptly upon its request.
SECTION 2.22 CapEx Funding Account. Upon the delivery of the annual
audited financial statements of Holdings and its Subsidiaries pursuant to
Section 5.4(c) for each Annual Fiscal Period, commencing with the Annual Fiscal
Period 2004, if no Default has occurred and is then continuing, no Interest
Deferral Period is in effect and the Borrower is in compliance with the
financial ratios set forth in Section 6.18 as of the last day of such Annual
Fiscal Period and the most recently ended Monthly Fiscal Period for which the
Borrower is required to have delivered a Monthly Report, then the Borrower may
deposit immediately available funds in the CapEx Funding Account in an amount
not to exceed the lesser of (i) 100% of Annual Excess Cash Flow for such Annual
Fiscal Period or (ii) the unused portion of the basket for Capital Expenditures
for such Annual Fiscal Period permitted in Section 6.15(c)(x) that may be
carried forward for Capital Expenditures in future years. Prior to any such
deposit, the Borrower shall have opened the CapEx Funding Account with the
Administrative Agent, subject to the terms of a duly executed Control Agreement
in form and substance satisfactory to the Required Lenders. If no Default has
occurred and is continuing, no Interest Deferral Period is in effect and the
Borrower is in compliance with the financial ratios set forth in Section 6.18 as
of the last day of the most recently ended Monthly Fiscal Period for which the
Borrower is required to have delivered a Monthly Report, the Borrower may
withdraw funds from the CapEx Funding Account to the extent that (i) such funds
are promptly applied to make Capital Expenditures or (ii) 50% of such withdrawn
funds are applied to prepay the Obligations pursuant to Section 2.10 and the
remainder of such withdrawn funds are (A) applied to pay Dividends to the extent
otherwise permitted under Section 6.16, (B) applied to pay Deferred Subordinated
Note Interest to the extent otherwise permitted under Section 6.16, (C)
deposited in the Cash Collateral Account or (D) otherwise used for other general
corporate purposes. The Administrative Agent
55
shall withdraw funds from the CapEx Funding Account to the extent contemplated
in Section 2.10.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Holdings and the Borrower represents and warrants to
each of the Lenders that:
SECTION 3.1 Organization; Powers. Each of the Loan Parties and their
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization (or enjoys the equivalent
status under the laws of any jurisdiction of organization outside the United
States), (b) has all requisite power and authority to own its property and
assets and to carry on its business as now conducted and as proposed to be
conducted, and (c) is qualified to do business in every jurisdiction where such
qualification is required, except where the failure so to qualify could not
reasonably be expected to result in a Material Adverse Effect. Each of the Loan
Parties has the power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or
instrument contemplated thereby to which it is or will be a party and, in the
case of the Borrower, to borrow and otherwise obtain credit hereunder.
SECTION 3.2 Authorization. The execution, delivery and performance by
each of the Loan Parties of each of the Loan Documents to which it is a party
and the borrowings hereunder, the other Transaction Documents and the other
transactions contemplated hereby and thereby (a) have been duly authorized by
all corporate, partnership or stockholder action, as the case may be, required
to be obtained by the respective Loan Parties and by any corporate, partnership
or stockholder action required of any other Loan Party and (b) do not and will
not (i) violate (A) any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or partnership agreement, other
constitutive documents or by-laws of the respective Loan Parties, (B) any
applicable order of any court or any rule, regulation or order of any
Governmental Authority or (C) any provision of any indenture, certificate of
designation for preferred stock, or other material agreement or instrument to
which the respective Loan Parties are parties, respectively or by which any of
them or any of their property is or may be bound, (ii) be in conflict with,
result in a breach of or constitute (alone or with notice or lapse of time or
both) a default under any such indenture, certificate of designation for
preferred stock, or other material agreement or instrument, or (iii) result in
the creation or imposition of any Lien upon or with respect to any property or
assets now owned or hereafter acquired by any Loan Party, other than the Liens
created by the Security Documents.
SECTION 3.3 Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document when
executed and delivered by each Loan Party which is party thereto will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, moratorium, reorganization or other
similar laws affecting creditors' rights generally and except as enforceability
may be limited by
56
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 3.4 Governmental Approvals. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the Transactions, except for (a) the
filing of Uniform Commercial Code financing statements, filings with the United
States Patent and Trademark Office and the United States Copyright Office and
filings with respect to real property Liens and pledges of Capital Stock of
Foreign Subsidiaries contemplated pursuant to Section 5.11, (b) such other
approvals as have been made or obtained and are in full force and effect, and
(c) filings with the SEC and the Ontario Securities Commission (OSC) in
connection with the issuance of the IDSs.
SECTION 3.5 Financial Statements. (a) Holdings and its Subsidiaries
have heretofore furnished to the Lenders (i) its consolidated balance sheets and
consolidated statements of operations and of cash flows, audited by and
accompanied by the opinion of a firm of nationally recognized public accountants
as of and for the Annual Fiscal Period ended December 31, 2002 and (ii) its
unaudited consolidated balance sheet and consolidated statements of operations
and of cash flows as of and for the Quarterly Fiscal Period ended September 30,
2003. Such financial statements present fairly the financial condition and
results of operations of each of Holdings and its consolidated Subsidiaries as
of such dates and for such periods. Except as disclosed in the Prospectus, none
of the Loan Parties has, or shall have as of the Closing Date any material
guarantee, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment that is not reflected in the
foregoing statements or the notes thereto. Such financial statements were
prepared in accordance with GAAP applied on a consistent basis.
(b) On and as of the Closing Date, the financial
projections of Holdings, the Borrower and their respective consolidated
Subsidiaries for the period from November 1, 2003 through the last day of Annual
Fiscal Period 2008 (giving effect to the Transactions) previously delivered to
Lenders (the "Initial Projections") are based on good faith estimates and
assumptions made by the management of the Borrower and Holdings, it being
recognized, however, that projections as to future events are not to be viewed
as facts and that the actual results during the period or periods covered by the
Initial Projections may differ from the projected results and that the
differences may be material. Notwithstanding the foregoing, as of the Closing
Date, management of the Borrower believed that the Initial Projections were
reasonable and attainable.
(c) The monthly, quarterly and annual fiscal periods of
Holdings and the Borrower that will occur during the term of this Agreement are
listed in Schedule 3.5(c) (each, a "Fiscal Period" and respectively, the
"Monthly Fiscal Periods", the "Quarterly Fiscal Periods" or the "Annual Fiscal
Periods").
SECTION 3.6 No Material Adverse Change. There has been no material
adverse change in the assets, business, properties, liabilities, financial
condition, results of operations or prospects of the consolidated Loan Parties,
taken as a whole, since December 31, 2002.
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SECTION 3.7 Title to Properties; Possession Under Leases. (a) Each of
the Loan Parties has good and marketable title to, or valid leasehold interests
in, or easements or other limited property interests in, all its material
properties and assets, except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties and assets for their intended purposes. All such material
properties and assets are free and clear of Liens, other than Permitted Liens.
(b) Each of the Loan Parties has complied with all
obligations under all leases to which it is a party and all such leases are in
full force and effect except in each case where a failure to comply or to be in
full force and effect could not reasonably be expected to have a Material
Adverse Effect. Each of the Loan Parties enjoys peaceful and undisturbed
possession under all such leases, except where a failure to do so could not
reasonably be expected to result in a Material Adverse Effect.
(c) Each of the Loan Parties owns or possesses, or could
obtain ownership or possession of, on terms not materially adverse to it, all
patents, trademarks, service marks, trade names, copyrights, licenses and rights
with respect thereto necessary for the present conduct of its business, without
any known conflict with the rights of others, and free from any burdensome
restrictions, except where such conflicts and restrictions could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 3.8 Subsidiaries. Schedule 3.8 sets forth as of the Closing
Date the name and jurisdiction of organization of each Subsidiary and, as to
each such Subsidiary, the percentage of each class of Capital Stock owned by any
Loan Party.
SECTION 3.9 Litigation; Compliance with Laws. (a) There are not any
actions, suits or proceedings at law or in equity or by or before any
Governmental Authority now pending or, to the knowledge of the Borrower,
threatened against or affecting any Loan Party or any business, property or
rights of any such Person (i) that involve any Loan Document or, as of the
Closing Date, the Transactions or (ii) that could, individually or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
(b) None of the Loan Parties and their respective
properties or assets is in violation of (nor will the continued operation of
their material properties and assets as currently conducted violate) any law,
rule or regulation (including any Environmental Law), or is in default with
respect to any judgment, writ, injunction or decree of any Governmental
Authority, where such violation or default could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10 Compliance with Agreements. (a) None of the Loan Parties
is a party to any agreement or instrument or subject to any corporate
restriction that has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(b) None of the Loan Parties is in default in any manner
under any provision of any indenture or other agreement or instrument evidencing
Indebtedness, or any other material agreement or instrument to which it is a
party or by which it or any of its properties or assets are or may be bound, in
either case where such default could reasonably be
58
expected to result in a Material Adverse Effect. Immediately after giving effect
to the Transactions, no Default or Event of Default shall have occurred and be
continuing.
SECTION 3.11 Federal Reserve Regulations. (a) None of the Loan Parties
and the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Term Note
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase or carry Margin Stock or to extend
credit to others for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose, or (ii) for any
purpose which entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including Regulation U or X.
SECTION 3.12 Investment Company; Public Utility Holding Company. None
of the Loan Parties is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
SECTION 3.13 Use of Proceeds. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only to refinance the
Prior Credit Agreement and certain existing Indebtedness of Holdings and the
Borrower, to finance Capital Expenditures (to the extent permitted hereunder),
to pay certain transaction costs arising in connection with the Transactions, to
repurchase Capital Stock of Holdings to the extent specifically contemplated in
the Prospectus, and for working capital and other general corporate purposes of
the respective Loan Parties and their Subsidiaries.
SECTION 3.14 Tax Returns. Each of the Loan Parties and any member of a
consolidated, combined or unitary group of which a Loan Party is a member
(together with the Loan Parties, the "Loan Party Group Members") has timely
filed or caused to be timely filed all federal, and all material state and local
tax returns required to have been filed by it and has paid or caused to be paid
all taxes shown thereon to be due and payable by it and all assessments received
by it, except taxes or assessments that are being contested in good faith by
appropriate proceedings in accordance with Section 5.3 and for which the
relevant Loan Party has set aside on its books adequate reserves in accordance
with GAAP. Each of the Loan Party Group Members has paid in full or made
adequate provision (in accordance with GAAP) for the payment of all taxes due
with respect to all periods ending on or before the Closing Date, which taxes,
if not paid or adequately provided for, could reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 3.14 with respect to
each of the Loan Party Group Members, (a) no material claims are being asserted
in writing with respect to any taxes, (b) as of the Closing Date no presently
effective waivers or extensions of statutes of limitation with respect to taxes
have been given or requested, (c) as of the Closing Date no tax returns are
being examined by, and no written notification of intention to examine has been
received from, the Internal Revenue Service or, with respect to any material
potential tax liability, any other taxing authority and (d) no currently pending
material issues have been raised in writing by the Internal Revenue Service or,
with respect to any material potential tax liability, any other taxing
authority. For purposes of this Section 3.14, "taxes" shall mean any present or
future tax, levy,
59
impost, duty, charge, assessment or fee of any nature (including interest,
penalties and additions thereto) that is imposed by any Governmental Authority.
SECTION 3.15 No Material Misstatements. (a) The written information,
reports, financial statements, exhibits and schedules furnished by or on behalf
of any Loan Party to the Lead Arranger, the Administrative Agent or any Lender
in connection with the negotiation of any Loan Document or included therein or
delivered pursuant thereto (including, without limitation, the Prospectus), when
taken as a whole, did not contain, and as they may be amended, supplemented or
modified from time to time, will not contain, as of the Closing Date any
material misstatement of fact and did not omit, and as they may be amended,
supplemented or modified from time to time, will not omit, to state as of the
Closing Date any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made, not
materially misleading in their presentation of the Transactions or of the Loan
Parties taken as a whole.
(b) All Initial Projections delivered as of the Closing
Date concerning the Loan Parties that are or have been made available to the
Lead Arranger, the Administrative Agent or any Lender by a Loan Party, including
those contained in the Prospectus, have been or will be prepared in good faith
based upon assumptions believed by Holdings and the Borrower to be reasonable.
SECTION 3.16 Employee Benefit Plans. Each of the Loan Parties and its
ERISA Affiliates is in compliance with the applicable provisions of ERISA and
the provisions of the Code relating to ERISA and the regulations and published
interpretations thereunder except for such noncompliance which could not
reasonably be expected to result in a Material Adverse Effect. No Reportable
Event has occurred as to which Holdings, the Borrower or any ERISA Affiliate was
required to file a report with the PBGC, other than reports for which the 30 day
notice requirement is waived. Neither Holdings, the Borrower nor any ERISA
Affiliate has incurred any liability under Title IV of ERISA with respect to the
termination of any Plan. Neither Holdings, the Borrower nor any ERISA Affiliate
has filed an application for a waiver of the minimum funding standard with
respect to any Plan under Section 412(d) of the Code or Section 303 of ERISA. As
of the Closing Date, the accumulated benefit obligation under each Plan (on a
termination basis and based on those assumptions used to fund such Plan) did
not, as of the last annual valuation date applicable thereto for which a
valuation is available, exceed by more than $2,000,000 the value of the assets
of such Plan, and the accumulated benefit obligation of all underfunded Plans
(on a termination basis and based on those assumptions used to fund each such
Plan) did not, as of the last annual valuation dates applicable thereto for
which valuations are available, exceed by more than $4,000,000 the value of the
assets of all such underfunded Plans. None of Holdings, the Borrower and the
ERISA Affiliates have incurred or could reasonably be expected to incur any
Withdrawal Liability. None of Holdings, the Borrower and the ERISA Affiliates
have received any written notification that any Multiemployer Plan is in
reorganization, insolvent or has been terminated, within the meaning of Title IV
of ERISA, and no Multiemployer Plan is reasonably expected to be in
reorganization, insolvent or to be terminated.
SECTION 3.17 Environmental Matters. Except as set forth in Schedule
3.17:
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(a) There has not been a Release or threatened Release of
Hazardous Materials at, on, under or around the properties currently owned or
currently or formerly operated by any Loan Party (the "Properties") in amounts
or concentrations which (i) constitute or constituted a violation of
Environmental Laws, except as could not reasonably be expected to have a
Material Adverse Effect; (ii) would reasonably be expected to give rise to an
Environmental Claim which, in any such case or in the aggregate, is reasonably
likely to result in a Material Adverse Effect; or (iii) could reasonably be
expected to impair materially the fair saleable value of any material currently
owned Property;
(b) The Properties and all operations of the Loan Parties
are in compliance, and in the last five years have been in compliance, with all
Environmental Laws, and all necessary Environmental Permits required to be
obtained by Holdings and its Subsidiaries have been obtained and are in effect,
except to the extent that such non-compliance or failure to obtain any necessary
permits, in the aggregate, are not reasonably likely to result in a Material
Adverse Effect;
(c) None of the Loan Parties has received any written
notice of an Environmental Claim in connection with the Properties or the
operations of the Borrower or the Subsidiaries or with regard to any Person
whose liabilities for environmental matters any Loan Party has retained or
assumed, in whole or in part, contractually, by operation of law or otherwise,
which, in either such case or in the aggregate, is reasonably likely to result
in a Material Adverse Effect;
(d) Hazardous Materials have not been transported from
the Properties, nor have Hazardous Materials been generated, treated, stored or
disposed of at, on, under or around any of the Properties in a manner that could
reasonably give rise to liability to any Loan Party under any Environmental Law,
nor have any of the Loan Parties retained or assumed any liability,
contractually, by operation of law or otherwise, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which, in each case,
individually or in the aggregate, is reasonably likely to result in a Material
Adverse Effect; and
(e) No Lien in favor of any Governmental Authority for
(i) any liability under any Environmental Law or (ii) damages arising from or
costs incurred by such Governmental Authority in response to a Release or
threatened Release of Hazardous Materials into the environment has been recorded
with respect to currently owned or leased properties except for Permitted Liens.
SECTION 3.18 Capitalization of Holdings and the Borrower. After giving
effect to the Transactions, Holdings has made a loan to the Borrower in the
amount of at least $116,000,000 (the "Borrower Intercompany Indebtedness"), the
terms, subordination provisions and amount of which shall be substantially
identical to the terms of the Holdings Subordinated Notes and otherwise
acceptable to the Administrative Agent and the Required Lenders. The
capitalization of each of Holdings and the Borrower is as reflected in the pro
forma as-adjusted capitalization for such parties set forth under the caption
"Capitalization" in the Prospectus.
SECTION 3.19 Security Documents.
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(a) The Pledge Agreement is effective to create in favor
of the Administrative Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in 100% of the issued and
outstanding Capital Stock of all Domestic Subsidiaries owned by Holdings, the
Borrower or any other Subsidiary (other than the Capital Stock of Service
America/National Business Services Enterprises Joint Venture and Service America
Corporation - Service Systems Associates), and 65% of the issued and outstanding
Capital Stock of all First Tier Foreign Subsidiaries owned by Holdings, the
Borrower or any Domestic Subsidiary and, when the Pledged Stock, together with
duly executed stock transfer powers, is delivered to the Administrative Agent
(or, as applicable in the case of Capital Stock of Foreign Subsidiaries, the
requisite filings or registrations are made), the Pledge Agreement will
constitute a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgors thereunder in such Pledged Stock,
in each case prior and superior in right to any other Person.
(b) The Security Agreement is effective to create in
favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral
subject thereto (as defined in the Security Agreement) and, when financing
statements in appropriate form are filed in the offices specified on the
schedules to the Security Agreement, the Security Agreement will constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the grantors thereunder in such Collateral, to the extent contemplated
therein and subject to Section 9-315 of the Uniform Commercial Code, and the
proceeds thereof, in each case prior and superior in right to any other Person,
other than with respect to Permitted Liens, it being understood that the
Borrower and its Subsidiaries shall not be required to xxxxx x Xxxx under the
Loan Documents on any property to the extent that the grant of such Lien is
prohibited by a Service Contract created prior to the Closing Date.
(c) The Intellectual Property Security Agreement is
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral (as defined in the Intellectual Property Security Agreement),
and when financing statements in appropriate form are filed in the offices
specified on the schedules to the Security Agreement and the Intellectual
Property Security Agreement is filed in the United States Patent and Trademark
Office and the United States Copyright Office, the Intellectual Property
Security Agreement will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such
Collateral and, to the extent contemplated therein and subject to Section 9-315
of the Uniform Commercial Code, the proceeds thereof, in each case prior and
superior in right to any other Person (it being understood that subsequent
recordings in the United States Patent and Trademark Office and the United
States Copyright Office may be necessary to perfect a lien on registered
trademarks, trademark applications and copyrights acquired by the Loan Parties
after the date hereof), other than with respect to the rights of Persons
pursuant to Permitted Liens.
(d) The Cash Collateral Agreement, the Existing
Subordinated Notes Cash Collateral Agreement and each Control Agreement is
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Cash Collateral Account, the Existing Subordinated Notes Cash Collateral
Account and the Dividend/CapEx Funding Account, respectively, and,
62
commencing 90 days after the Closing Date, each other deposit account of a Loan
Party (including without limitation, the CapEx Funding Account if and when
created), which security interest constitutes a fully perfected Lien on and
security interest in all right, title and interest of the grantors thereunder in
such accounts to the extent contemplated therein and subject to Section 9-315 of
the Uniform Commercial Code, the proceeds thereof, in each case prior and
superior in right to any other Person, other than with respect to Permitted
Liens.
SECTION 3.20 Labor Matters. Except as set forth in Schedule 3.20, there
are no strikes, lockouts or slowdowns pending or threatened against any Loan
Party which, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. The hours worked by and payments made to
employees of any Loan Party have not been in violation in any material respect
of the Fair Labor Standards Act or any other applicable law dealing with such
matters, except as could not reasonably be expected to result in a Material
Adverse Effect. All material payments due from any Loan Party or for which any
claim may be made against such Loan Party, the Borrower or any Subsidiary, on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as a liability on the books of the relevant Loan Party
to the extent required by GAAP, except as could not reasonably be expected to
result in a Material Adverse Effect. The consummation of the Transactions will
not give rise to a right of termination or right of renegotiation on the part of
any union under any collective bargaining agreement to which any Loan Party (or
any predecessor) is a party or by which any Loan Party (or any predecessor) is
bound.
SECTION 3.21 Insurance. Schedule 3.21 sets forth a true, complete and
correct description of all insurance maintained by or for the benefit of the
Loan Parties as of the Closing Date. As of such date, such insurance is in full
force and effect and all premiums have been duly paid. The Loan Parties have
insurance in such amounts and covering such risks and liabilities (and with such
deductibles and exclusions) as are in accordance with normal industry practice.
SECTION 3.22 Solvency. (a) Immediately after the consummation of the
transactions to occur on the Closing Date and immediately following the making
of each Loan made on the Closing Date and after giving effect to the application
of the proceeds of such Loans, (i) the fair value of the assets of the Loan
Parties on a consolidated basis, at a fair valuation, will exceed the debts and
liabilities, subordinated, contingent or otherwise, of the Loan Parties on a
consolidated basis; (ii) the present fair saleable value of the property of the
Loan Parties on a consolidated basis will be greater than the amount that will
be required to pay the probable liability of the Loan Parties on a consolidated
basis on their debts and other liabilities, subordinated, contingent or
otherwise, as such debts and other liabilities become absolute and matured;
(iii) the Loan Parties on a consolidated basis will be able to pay their debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) the Loan Parties on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are
conducted and are proposed to be conducted following the Closing Date.
(b) None of Holdings and the Borrower intends to, none
will permit any Subsidiary to, and none believes that it or any Subsidiary will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be
63
received by it or any such Subsidiary and the timing of the amounts of cash to
be payable on or in respect of its Indebtedness or the Indebtedness of any such
Subsidiary.
SECTION 3.23 Subordinated Debt
(a) Holdings Subordinated Notes. This Agreement, and all
amendments, restatements, supplements, modifications, replacements,
restructurings, increases, refinancings and refundings hereof other than from
issuances of equity or Indebtedness that is contractually subordinated to the
Indebtedness hereunder, constitute the "Credit Agreement" within the meaning of
the Subordinated Note Documents (except to the extent that any such amendments,
restatements, supplements, modifications, replacements, restructurings,
increases, refinancings and refundings of or to this Agreement are prohibited by
Section 4.03 of the Subordinated Notes Indenture as in effect on the Closing
Date and not otherwise consented to by the majority of the holders of the
Holdings Subordinated Notes then outstanding). This Agreement, together with
each of the other Loan Documents and all amendments, restatements, supplements,
modifications, replacements, restructurings, increases, refinancings and
refundings hereof and thereof, constitute "Senior Credit Documents" within the
meaning of the applicable Subordinated Note Documents (except to the extent that
any such amendments, restatements, supplements, modifications, replacements,
restructurings, increases, refinancings and refundings are prohibited by Section
4.03 of the Subordinated Notes Indenture as in effect on the Closing Date and
not otherwise consented to by the majority of the holders of the Holdings
Subordinated Notes then outstanding). The Revolving Credit Exposure (including
without limitation, the Revolving Credit Exposure incurred after the Closing
Date), the Term Notes and all other Obligations constitute "Senior Lender
Indebtedness", "Designated Senior Indebtedness" and "Senior Indebtedness" within
the meaning of the Subordinated Note Documents, and the holders thereof from
time to time shall be entitled to all of the rights of a holder of "Senior
Lender Indebtedness", "Designated Senior Indebtedness" and "Senior Indebtedness"
pursuant to the Subordinated Note Documents. The Revolving Credit Exposure
(including, without limitation Revolving Credit Exposure incurred after the
Closing Date), the Term Notes and all other Obligations are permitted under
Section 4.03(b)(i) of the Subordinated Notes Indenture, and the Borrower has not
incurred or obtained commitments for more than $35,000,000 of other Senior
Indebtedness permitted under Section 4.03(b)(i) of the Subordinated Notes
Indenture.
(b) Existing Subordinated Notes. This Agreement, and all
amendments, restatements, supplements, modifications, replacements,
restructurings, increases, refinancings and refundings hereof, other than from
issuances of equity or Indebtedness that is contractually subordinated to the
Indebtedness hereunder, constitute the "Credit Agreement" within the meaning of
the Existing Subordinated Note Documents (except to the extent that any such
amendments, restatements, supplements, modifications, replacements,
restructurings, increases, refinancings and refundings of or to this Agreement
are prohibited by the Existing Subordinated Notes Indenture and not otherwise
consented to by the majority of the holders of the Existing Subordinated Notes
then outstanding). This Agreement, together with each of the other Loan
Documents and all amendments, restatements, supplements, modifications,
replacements, restructurings, increases, refinancings and refundings hereof and
thereof, constitute "Senior Credit Documents" within the meaning of the
applicable Existing Subordinated Note Documents (except to the extent that any
such amendments, restatements, supplements, modifications, replacements,
restructurings, increases, refinancings and refundings
64
of or to this Agreement are prohibited by the Existing Subordinated Notes
Indenture and not otherwise consented to by the majority of the holders of the
Existing Subordinated Notes then outstanding). The Revolving Credit Exposure
(including without limitation, the Revolving Credit Exposure incurred after the
Closing Date), the Term Notes and all other Obligations constitute "Bank
Indebtedness", "Designated Senior Indebtedness" and "Senior Indebtedness" within
the meaning of the Existing Subordinated Note Documents, and the holders thereof
from time to time shall be entitled to all of the rights of a holder of "Bank
Indebtedness", "Designated Senior Indebtedness" and "Senior Indebtedness"
pursuant to the Existing Subordinated Note Documents. The Revolving Credit
Exposure (including, without limitation Revolving Credit Exposure incurred after
the Closing Date), the Term Notes and all other Obligations are permitted under
Section 4.03(b)(i) of the Existing Subordinated Notes Indenture, and the
Borrower has not incurred or obtained commitments for more than $115,000,000 of
other Senior Indebtedness permitted under Section 4.03(b)(i) of the Existing
Subordinated Notes Indenture. The parties hereto acknowledge and agree that this
Agreement is intended to replace, refund and refinance in its entirety the
credit agreement dated as of December 3, 1998, as amended, among the Borrower,
Holdings, the financial institutions named therein and The Chase Manhattan Bank,
as Administrative Agent.
SECTION 3.24 Material Contracts. Schedule 3.24 contains as of the
Closing Date a true, correct and complete list of all material contracts to
which Holdings, the Borrower and their respective Subsidiaries are parties. As
of the Closing Date, all such material contracts are in full force and effect
and no material defaults currently exist thereunder.
SECTION 3.25 Non-Guarantor Expenditures. As of the Closing Date, the
investments by the Borrower and its Subsidiaries in Foreign Subsidiaries,
Non-Wholly Owned Subsidiaries and joint ventures in which the Borrower and its
Subsidiaries hold minority interests, including without limitation loans,
advances and leases of assets or property, are described on Schedule 3.25.
SECTION 3.26 Capital Stock; Interest in Joint Ventures. As of the
Closing Date, Schedule 3.26 sets forth a complete and accurate list describing
the authorized Capital Stock of, as well as the record and beneficial ownership
thereof, the Borrower and each of its Subsidiaries. As of the Closing Date,
Service America Corporation, a Delaware corporation, has (i) a fifty percent
(50%) interest in Service America Corporation-Service System Associates, a joint
venture formed pursuant to the Connecticut Uniform Partnership Act, and (ii) a
sixty percent (60%) interest in Service America/National Business Services
Enterprises Joint Venture, a joint venture formed pursuant to the District of
Columbia Uniform Partnership Act.
ARTICLE IV
CONDITIONS OF LENDING
The obligations of the Lenders to make Loans and of the
Fronting Bank to issue Letters of Credit hereunder (each, a "Credit Event") are
subject to the satisfaction of the following conditions:
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SECTION 4.1 All Credit Events. On the date of each Borrowing (other
than the conversion of a Eurodollar Borrowing to an ABR Borrowing) and each
issuance or renewal of a Letter of Credit:
(a) The Administrative Agent shall have received a notice
of such Borrowing (or such notice shall have been deemed given) or, in the case
of the issuance of a Letter of Credit, the Fronting Bank and the Administrative
Agent shall have received a notice requesting the issuance of such Letter of
Credit.
(b) The representations and warranties set forth in each
Loan Document shall be true and correct in all material respects on and as of
the date of such Borrowing or issuance of such Letter of Credit with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Borrowing
or issuance of such Letter of Credit, as the case may be, no Event of Default or
Default shall have occurred and be continuing.
Each Borrowing and each issuance of a Letter of Credit (except those specified
in the parentheticals contained in the introductory paragraph of this Section
4.1) shall be deemed to constitute a representation and warranty by the Borrower
on the date of such Borrowing or issuance, as the case may be, as to the matters
specified in paragraphs (b) and (c) of this Section 4.1.
SECTION 4.2 First Credit Event. On the Closing Date:
(a) Each of the Lead Arranger and the Administrative
Agent shall have received, on behalf of itself, the Lenders and the Fronting
Bank, favorable written opinions of (i) Xxxxxx Xxxx & Xxxxxx LLP and (ii) the
counsels for the Loan Parties listed on Schedule 4.2(a)2 hereto as to the
matters specified therein, in each case (A) dated the Closing Date, (B)
addressed to the Lead Arranger, the Fronting Bank, the Administrative Agent and
the Lenders, (C) covering such other matters relating to the Loan Documents and
the Transactions as the Lead Arranger, the Administrative Agent or any Lender
may reasonably request and (D) otherwise in form and substance satisfactory to
the Lead Arranger, the Administrative Agent and the Lenders. Each of Holdings
and the Borrower hereby instructs such counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the
borrowings, issuance of Notes and extensions of credit hereunder and the other
Loan Documents shall be reasonably satisfactory to the Lenders, the Fronting
Bank, the Administrative Agent and to counsel for the Lead Arranger and the
Administrative Agent.
---------------------
(2) Schedule 4.2(a) to include foreign counsel for jurisdictions in which
Foreign Subsidiaries are organized and to include no conflict opinions
with respect to the Existing Subordinated Notes Indenture.
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(c) The Lead Arranger and the Administrative Agent shall
have received (i) a copy of the certificate or articles of incorporation,
including all amendments thereto, of each Loan Party, certified as of a recent
date by the Secretary of State of the state of its organization and a
certificate as to the good standing of each Loan Party as of a recent date from
such Secretary of State and from the Secretaries of State of each other
jurisdiction where such Loan Party is required to be qualified to do business as
a foreign corporation and a failure to be so qualified would not reasonably be
expected to result in a Material Adverse Effect; (ii) a certificate of the
Secretary or Assistant Secretary of each Loan Party dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the by-laws
of such Loan Party as in effect on the Closing Date and at all times since a
date prior to the date of the resolutions described in clause (B) below, (B)
that attached thereto is a true and complete copy of resolutions or other
authorizing action duly adopted by the Board of Directors of such Loan Party
authorizing the execution, delivery and performance of the Loan Documents to
which such Person is a party and, in the case of the Borrower, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the certificate or articles
of incorporation or formation documents of such Loan Party have not been amended
since the date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to clause (i) above, and (D) as to the incumbency
and specimen signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to (ii)
above; and (iv) such other documents as the Lead Arranger, the Administrative
Agent, the Lenders, the Fronting Bank or counsel for the Lead Arranger, the
Administrative Agent and the Lenders, may reasonably request.
(d) The Lead Arranger and the Administrative Agent shall
have received a certificate of the Borrower, dated the Closing Date and signed
by a Financial Officer of and on behalf of the Borrower, confirming compliance
with the conditions precedent set forth in paragraphs (b) and (c) of Section
4.1.
(e) The Lead Arranger and the Administrative Agent shall
have received evidence of the termination and repayment in full of the Prior
Credit Agreement, all in form and substance satisfactory to the Lenders and the
Administrative Agent.
(f) The Lead Arranger, the Administrative Agent and the
Lenders shall have received all Fees and other amounts due and payable on or
prior to the Closing Date, including, to the extent invoiced, reimbursement or
other payment of all out-of-pocket expenses required to be reimbursed or paid by
any Loan Party hereunder, under any other Loan Document or under any letter
agreement to which a Loan Party is a party relating to the Transactions.
(g) The Subsidiary Guarantee Agreement shall have been
duly executed by all Domestic Subsidiaries (other than Non-Wholly-Owned
Subsidiaries), the Holdings Guarantee Agreement shall have been executed by
Holdings, and each Guarantee Agreement shall have been delivered to the
Administrative Agent and shall be in full force and effect; the Term Lender Fee
Letter shall have been executed by the Company and delivered to the Term
Lenders;
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(h) The Security Agreement and the Intellectual Property
Security Agreement shall have been duly executed by the Loan Parties party
thereto and shall have been delivered to the Administrative Agent and shall be
in full force and effect on such date, and each document (including each Uniform
Commercial Code financing statement) required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to create
in favor of the Administrative Agent for the benefit of the Secured Parties a
valid, legal and perfected first-priority security interest in and lien on the
Collateral described in each such agreement (subject to any Permitted Lien)
shall have been delivered to the Administrative Agent, and all promissory notes
and instruments (including the Borrower Intercompany Note) of the Loan Parties
shall have been endorsed in blank and delivered to the Administrative Agent.
(i) The Borrower Intercompany Note shall have been duly
issued, executed and delivered by the Borrower to Holdings, and the Borrower and
Holdings shall have executed and delivered that certain Borrower Intercompany
Subordination Agreement, all in form and substance satisfactory to the
Administrative Agent and the Lenders.
(j) The Cash Collateral Agreement, the Existing
Subordinated Notes Cash Collateral Agreement and the Control Agreement with
respect to the Dividend/CapEx Funding Account shall have been duly executed by
the parties thereto and delivered to the Administrative Agent and shall be in
full force and effect on such date.
(k) The Pledge Agreement shall have been duly executed by
the parties thereto and delivered to the Administrative Agent and shall be in
full force and effect, and 100% of the issued and outstanding Capital Stock of
the Borrower and all Domestic Subsidiaries owned by Holdings, the Borrower or
any other Subsidiary (other than the Capital Stock of Service America/National
Business Services Enterprises Joint Venture and Service America Corporation -
Service Systems Associates), and 65% of the issued and outstanding Capital Stock
of all First Tier Foreign Subsidiaries owned by Holdings, the Borrower or any
Domestic Subsidiary shall have been duly and validly pledged thereunder to the
Administrative Agent for the ratable benefit of the Secured Parties and
certificates representing such shares, accompanied by instruments of transfer
and stock powers endorsed in blank, shall be in the actual possession of the
Administrative Agent.
(l) The Administrative Agent and the Lenders shall have
received copies of favorable UCC, tax and judgment lien search reports and
intellectual property search reports with respect to each Loan Party in all
necessary or appropriate jurisdictions and under all legal and trade names of
all Loan Parties reasonably requested by the Lenders together with copies of the
financing statements disclosed by such search, accompanied by evidence
satisfactory to the Administrative Agent and the Lenders that the Liens
indicated in any such financing statement would be permitted under Section 6.2
or have been released. The Administrative Agent shall have received duly
executed documentation evidencing the termination of all Liens granted in the
Pledged Stock and in any other Collateral in connection with existing
Indebtedness of the Borrower or any of the Subsidiaries or any other Person
(other than Permitted Liens), all in form and substance satisfactory to the
Lenders and the Administrative Agent.
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(m) The Administrative Agent shall have received
certified copies of the Offering Documents and all other material documents
executed or delivered in connection therewith, all in form and substance
satisfactory to the Lenders and the Administrative Agent, including without
limitation the legal opinions delivered in connection therewith, together with
such reliance letters thereon as may be requested by the Required Lenders
allowing the Lenders and the Administrative Agent to rely on such opinions, all
in form and substance satisfactory to the Lenders and to the Administrative
Agent.
(n) The Administrative Agent shall have received copies
of, or an insurance broker's or agent's certificate as to coverage under, the
insurance policies required by Section 5.2 and the applicable provisions of the
Security Documents, each of which shall be endorsed or otherwise amended to
include a "standard" or "New York" lender's loss payable endorsement and to name
the Administrative Agent as additional insured, in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders.
(o) The Transactions shall have been consummated prior to
or simultaneously with the initial Credit Event hereunder in accordance with
applicable law.
(p) After giving effect to the Transactions, (i) none of
the Loan Parties shall have any preferred stock outstanding (other than
preferred stock owned by Loan Parties and pledged pursuant to the Pledge
Agreement) and no Indebtedness other than the Obligations and guarantees thereof
and Indebtedness otherwise permitted under Section 6.1, and (ii) Holdings shall
have outstanding no equity interest or Indebtedness other than its Capital Stock
and the Holdings Subordinated Notes.
(q) There shall have been no material adverse change in
the assets, business, properties, financial condition, liabilities, results of
operations or prospects of any Loan Party on a consolidated basis since December
31, 2002.
(r) The Lenders shall have received a pro forma
consolidated balance sheet of Holdings as of the Closing Date, in form and
substance satisfactory to the Lenders and the Administrative Agent (the "Closing
Pro Forma"), together with a certificate of Holdings, dated the Closing Date and
signed by a Financial Officer of the Holdings, to the effect that such balance
sheet fairly presents the pro forma financial position of the Loan Parties on a
consolidated basis in accordance with U.S. GAAP (except to the extent otherwise
noted) after giving effect to the initial Credit Events and the Transactions,
and the Lenders shall be reasonably satisfied that such balance sheet and the
financing arrangements contemplated hereby are not materially inconsistent with
the Prospectus and the information, the projections and the model contained
therein. Within a reasonable period prior to the Closing Date, the Borrower
shall also have provided (x) the Initial Projections, (y) a certificate of the
Chief Financial Officer of the Borrower confirming that the financial covenants
contained in Sections 6.10, 6.11 and 6.12, determined on a pro forma
consolidated basis for the Borrower and its Subsidiaries for the twelve-month
Fiscal Period most recently ended prior to the Closing Date (adjusted to give
effect to the Transactions on or about the Closing Date as if such Transactions
occurred on the first day of such twelve-month Fiscal Period and utilizing the
Pre-Closing Levels), are not violated and certifying that as of the Closing
Date, and on a pro forma basis, (a) the Total Leverage Ratio does not exceed
3.50:1.00; (b) the Senior Leverage Ratio does not exceed 2.20:1.00, and (c) the
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Interest Coverage Ratio is no less than 1.80:1.00, and (z) such other financial
information as the Lenders shall reasonably have requested in connection with
the Transactions.
(s) All requisite Governmental Authorities and all
material third parties shall have approved or consented to the Transactions to
the extent required, all applicable appeal periods shall have expired and there
shall be no governmental or judicial action, actual or threatened, that has or
could have a reasonable likelihood of restraining, preventing or imposing
burdensome conditions on the share exchange or the consummation of other
Transactions.
(t) The Borrower shall have established the Cash
Collateral Account with the Administrative Agent, which shall be maintained in
the sole dominion and control of the Administrative Agent on behalf of the
Lenders, and shall have directed the Administrative Agent to deposit from the
proceeds of the IDSs sold on the Closing Date an amount equal to the Cash
Collateral Minimum Balance into the Cash Collateral Account.
(u) The Borrower shall have established the
Dividend/CapEx Funding Account with the Administrative Agent, and shall have
directed the Administrative Agent to deposit from the proceeds of the IDSs sold
on the Closing Date an amount equal to $____________ into the Dividend/CapEx
Funding Account.
(v) The Borrower shall have established the Existing
Subordinated Notes Cash Collateral Account with the Administrative Agent, which
shall be maintained in the sole dominion and control of the Administrative Agent
on behalf of the Lenders, and shall have directed the Administrative Agent to
deposit from the proceeds of the IDSs sold on the Closing Date an amount equal
to $____________ into the Existing Subordinated Notes Cash Collateral Account.
(w) The Borrower shall have redeemed all of its Existing
Subordinated Notes, other than up to [$18,250,000] of the Existing Subordinated
Notes; the Administrative Agent and the Lenders shall have received (i) a
certified copy of the Existing Subordinated Notes Indenture, with all amendments
thereto, and (ii) evidence to their satisfaction that the Existing Subordinated
Notes Indenture has been amended to remove all covenants, to be in form and
substance satisfactory to the Lenders.
(x) The Borrower shall have delivered to the
Administrative Agent such other documents as the Lead Arranger, the
Administrative Agent, the Lenders, the Fronting Bank and counsel for the Lead
Arranger, the Administrative Agent and the Lenders, may reasonably request, all
in form and substance satisfactory to the Lenders and the Administrative Agent.
ARTICLE V
AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees with
each Lender that so long as this Agreement shall remain in effect and until the
Commitments have been
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terminated and the principal of and interest on each Loan and Term Note, all
Fees and all other expenses or amounts payable under any Loan Document shall
have been paid in full and all Letters of Credit have been cancelled or have
expired and all amounts drawn thereunder have been reimbursed in full, unless
the Required Lenders shall otherwise consent in writing, each of Holdings and
the Borrower will, and will cause each of their Subsidiaries to:
SECTION 5.1 Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except for the liquidation or dissolution of Subsidiaries,
if the assets of such corporations, to the extent they exceed estimated
liabilities, are acquired by the Borrower or a Subsidiary in such liquidation or
dissolution, provided that Subsidiaries that are Guarantors may not be
liquidated into Subsidiaries that are not Guarantors.
(b) Do or cause to be done all things necessary to
obtain, preserve, renew, extend and keep in full force and effect the rights,
licenses, permits, franchises, authorizations, patents, copyrights, trademarks
and trade names material to the conduct of its business; comply in all material
respects with all material applicable laws, rules, regulations (including any
Environmental Law) and orders of any Governmental Authority, whether now in
effect or hereafter enacted; and at all times maintain and preserve all property
material to the conduct of such business and keep such property in good repair,
working order and condition and from time to time make, or cause to be made, all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith,
if any, may be properly conducted at all times (in each case except as expressly
permitted by this Agreement).
SECTION 5.2 Insurance. Keep its insurable properties insured at all
times by financially sound and reputable insurers in such amounts as shall be
customary for similar businesses; maintain such other insurance (including, to
the extent consistent with past practices, self-insurance), of such types, to
such extent and against such risks, as is customary with companies in the same
or similar businesses, including general liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by it;
and maintain such other insurance as may be required by law or any other Loan
Document; provided, that, all policies or certificates (or certified copies
thereof) with respect to such insurance (i) shall be endorsed to the
Administrative Agent's satisfaction for the benefit of the Administrative Agent
(including a "standard" or "New York" lender's loss payable endorsement and
naming the Administrative Agent additional insured), (ii) shall state that such
insurance policies shall not be canceled without at least 30 days' prior written
notice thereof by the respective insurer to the Administrative Agent, and (iii)
shall provide that the respective insurers irrevocably waive any and all rights
of subrogation with respect to the Administrative Agent.
SECTION 5.3 Taxes. Pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property, before the same shall become
delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment and
discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as the validity
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or amount thereof shall be contested in good faith by appropriate proceedings
and the affected Loan Party or a Subsidiary of such Loan Party, shall have set
aside on its books adequate reserves with respect thereto.
SECTION 5.4 Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent and each Lender:
(a) Within 40 days after the end of each Monthly Fiscal
Period (the "Reported Month"), and in any event no less than three (3) Business
Days prior to the earlier of the Subordinated Note Interest Payment Date and the
Dividend Payment Date in each calendar month, a Monthly Report substantially in
the form of Exhibit K (the "Monthly Report") which shall include, among other
things:
(i) a monthly consolidated cash flow statement and a
monthly consolidated balance sheet for Holdings and its Subsidiaries
for the Reported Month and year-to-date,
(ii) a certification from the Borrower of (A) EBITDA and
Adjusted EBITDA for the twelve Monthly Fiscal Periods ending on the
last day of the Reported Month, (B) Available Cash, Distributable Cash,
Dividend Shortfall Amount and Dividend Payment Amount, in each case for
such Reported Month, (C) interest on the Holdings Subordinated Notes
and interest on Deferred Subordinated Note Interest scheduled to be
paid on the Subordinated Note Interest Payment Date immediately
following the required date of delivery for such Monthly Report, (D)
the aggregate outstanding amount of Deferred Subordinated Note
Interest, if any, and (E) Consolidated Service Contract Capital
Expenditures for such Reported Month and cumulatively for the Annual
Fiscal Period to-date;
(iii) a certification from the Borrower of the amount of
any Insurance Proceeds, Asset Sale Proceeds, Debt Offering Proceeds,
Unamortized Contract Value Proceeds and Equity Offering Proceeds, in
each case with respect to the Reported Month and where relevant, on a
cumulative annual basis;
(iv) a detailed report of the additions and withdrawals of
funds from the Cash Collateral Account, the Dividend/CapEx Funding
Account, the Existing Subordinated Notes Cash Collateral Account and
the CapEx Funding Account, if any, during such Monthly Fiscal Period;
(v) a computation from the Borrower in reasonable detail
demonstrating the calculation of the Total Leverage Ratio, the Senior
Leverage Ratio and the Interest Coverage Ratio and a certification from
the Borrower of compliance with the financial covenants contained in
Sections 6.10, 6.11, 6.12, 6.18 and 6.19;
(vi) confirmation from the Borrower of the absence of a
Default or Event of Default or, if such a Default or Event of Default
has occurred, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto,
together with confirmation from the Borrower that the
72
representations and warranties set forth in the Loan Documents are true
and correct in all material respects (except to the extent such
representations and warranties expressly relate to an earlier date);
and
(vii) confirmation from the Borrower of the absence of any
default or event of default pursuant to the Subordinated Note Documents
and, if any Existing Subordinated Notes are outstanding, the Existing
Subordinated Note Documents, or if such a default or event of default
has occurred, specifying the nature and extent thereof and any
corrective action proposed to be taken with respect thereto;
(b) within 45 days after the end of each Quarterly Fiscal
Period, an unaudited consolidated balance sheet and related statements of
operations, cash flows and stockholders' equity showing the financial condition
of the Loan Parties on a consolidated basis as of the close of such Quarterly
Fiscal Period and the consolidated results of their operations during such
Quarterly Fiscal Period, together with the corresponding consolidating
statements prepared in a manner consistent with the consolidating financial
statements delivered to the Lenders prior to the Closing Date;
(c) within 90 days after the end of each Annual Fiscal
Period, a consolidated balance sheet and related statements of operations, cash
flows and stockholders' equity showing the financial condition of the Loan
Parties on a consolidated basis as of the close of such Annual Fiscal Period and
the consolidated results of their operations during such Annual Fiscal Period,
together with the corresponding consolidating statements prepared in a manner
consistent with the consolidating financial statements delivered to the Lenders
prior to the Closing Date, all audited by independent public accountants of
recognized national standing reasonably acceptable to the Administrative Agent
and accompanied by an opinion of such accountants (which shall not be qualified
in any material respect, provided that disclosures by such accountants of
changes in accounting principles shall not be deemed such a qualification) to
the effect that such consolidated financial statements fairly present the
financial condition and results of operations of the Loan Parties on a
consolidated basis in accordance with GAAP, together with a written discussion
by management of annual results compared to prior year results;
(d) if, as a result of any change in accounting
principles and policies from those as in effect on the date of this Agreement,
the financial statements of the Loan Parties on a consolidated basis delivered
pursuant to paragraph (a), (b) or (c) above will differ in any material respect
from the consolidated financial statements that would have been delivered
pursuant to such clauses had no such change in accounting principles and
policies been made, then, together with the first delivery of financial
statements pursuant to paragraph (a), (b) or (c) above following such change, a
schedule prepared by a Financial Officer on behalf of Holdings and the Borrower
reconciling such changes to what the financial statements would have been
without such changes;
(e) simultaneously with the delivery of any financial
statements pursuant to paragraph (b) or (c) above, a balance sheet and related
statements of operations, cash flows and stockholder's equity for each
unconsolidated Subsidiary for the applicable period;
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(f) promptly after the same become publicly available,
copies of all periodic and other publicly available reports, proxy statements
and, to the extent reasonably requested by the Administrative Agent, other
materials filed by any Loan Party with the Securities and Exchange Commission,
or any governmental authority succeeding to any of or all the functions of said
Commission, or with any national securities exchange;
(g) within 90 days after the beginning of each Annual
Fiscal Period, a copy of an operating and capital expenditure budget for such
Annual Fiscal Period together with updated projections with respect to the
financial performance of the Borrower during the five year period commencing as
of the date the projections are prepared (the "Projections");
(h) promptly following the creation or acquisition of any
Subsidiary, a certificate from a Responsible Officer identifying such new
Subsidiary and the ownership interest of each of Holdings, the Borrower and the
Subsidiaries therein, which certificate shall further specify whether or not
such Subsidiary is required to become a Guarantor;
(i) promptly following entry into any Service Contract or
the purchase, lease or acquisition of all or any substantial part of the assets
of any other Person involving Capital Expenditures in excess of $5,000,000, a
certificate from a Responsible Officer identifying such Service Contract or such
purchase, lease or acquisition and confirming that it is a Permitted Service
Contract or Permitted Business Acquisition, as the case may be;
(j) promptly, a copy of all reports submitted in
connection with any material interim or special audit made by independent
accountants of the books of Holdings, the Borrower or any Subsidiary;
(k) within ninety (90) days after the beginning of each
Annual Fiscal Period, an updated version of the schedule of insurance policies
delivered as Schedule 3.21;
(l) within the thirty (30) day period prior to each of
the second anniversary and the fourth anniversary of the Closing Date, a legal
opinion from Borrower's counsel, in form and substance acceptable to the
Administrative Agent and the Lenders, confirming the enforceability, creation
and perfection of the Liens in favor of the Administrative Agent as contemplated
by the Security Documents;
(m) promptly, and in any event within three Business Days
after any officer of the Borrower or any of its Subsidiaries obtains knowledge
thereof, notice of the occurrence of any event which constitutes a default or an
event of default under the Subordinated Note Documents or the Existing
Subordinated Note Documents;
(n) promptly upon receipt thereof, and in any event
within three Business Days, a copy of any written notice received by any Loan
Party or Subsidiary stating or alleging that (i) such Loan Party or Subsidiary
has breached its obligations under a Service Contract, (ii) any other event has
occurred that permits the early termination of a Service Contract or (iii) a
Service Contract has been terminated;
(o) promptly, and in any event within three Business Days
after any officer of the Borrower or any of its Subsidiaries obtains knowledge
thereof, (i) notice that any
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Service Contract has terminated prior to its stated date of termination and (ii)
if such Service Contract is a Material Service Contract, a certificate of a
Financial officer of the Borrower demonstrating compliance with Section 6.9(e);
and
(p) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of any Loan
Party, or compliance with the terms of any Loan Document, or such consolidating
financial statements, as in each case the Administrative Agent or any Lender,
acting through the Administrative Agent, may reasonably request.
SECTION 5.5 Litigation, Default and Other Notices. Furnish to the
Administrative Agent and each Lender written notice of the following promptly
after any Responsible Officer of the Borrower obtains actual knowledge thereof:
(a) any Event of Default or Default, specifying the
nature and extent thereof and the corrective action (if any) proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any written threat
or notice of intention of any Person to file or commence, any action, suit or
proceeding, whether at law or in equity or by or before any Governmental
Authority, against any Loan Party thereof in respect of which there is a
reasonable possibility of an adverse determination and which could reasonably be
expected to result in a Material Adverse Effect and a notice of any material
adverse development in such action, suit or proceeding; and
(c) any other development specific to a Loan Party that
is not a matter of general public knowledge and that has resulted in, or could
reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.6 Employee Benefits. (a) Comply in all material respects with
the applicable provisions of ERISA and the provisions of the Code relating to
ERISA and any applicable similar non-U.S. law, except to the extent that the
failure to comply with this subsection would not reasonably be expected to have
a Material Adverse Effect and (b) furnish to the Administrative Agent (i) as
soon as possible after, and in any event within 30 days after any Responsible
Officer of Holdings, the Borrower or any ERISA Affiliate knows or has reason to
know that, any Reportable Event has occurred, a statement of a Financial Officer
setting forth details as to such Reportable Event and the action proposed to be
taken with respect thereto, together with a copy of the notice, if any, of such
Reportable Event given to the PBGC, (ii) promptly after any Responsible Officer
learns of receipt thereof, a copy of any notice that the Borrower or any ERISA
Affiliate may receive from the PBGC relating to the intention of the PBGC to
terminate any Plan or Plans (other than a Plan maintained by an ERISA Affiliate
that is considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Code Section 414) or to appoint a trustee to administer any such Plan, (iii)
within 30 days after the due date for filing with the PBGC pursuant to Section
412(n) of the Code a notice of failure to make a required installment or other
payment with respect to a Plan, a statement of a Financial Officer setting forth
details as to such failure and the action proposed to be taken with respect
thereto, together with a copy of any such notice given to the PBGC, (iv)
promptly after the filing of an application for a waiver of the minimum funding
standard, and promptly after the grant of such a waiver, a
75
statement of a Financial Officer setting forth details as to such waiver, (v)
promptly after any Responsible Officer learns thereof and in any event within 30
days after receipt thereof by Holdings, the Borrower or any ERISA Affiliate from
the sponsor of a Multiemployer Plan, a copy of each notice received by Holdings,
the Borrower or any ERISA Affiliate concerning (A) the imposition of Withdrawal
Liability or (B) a determination that a Multiemployer Plan is, or is reasonably
expected to be, terminated, insolvent or in reorganization, in each case within
the meaning of Title IV of ERISA, and (vi) promptly after any Responsible
Officer learns of any other event, transaction or condition that could result in
the incurrence of any liability by Holdings, the Borrower or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of
the Code relating to employee pension benefit plans, or in the imposition of any
Lien on any of the rights, properties or assets of Holdings, the Borrower or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax
provisions, a statement of a Financial Officer setting forth the nature thereof
and the action, if any, proposed to be taken with respect thereto; provided that
in the case of each of clauses (i) through (vi) above, notice to the
Administrative Agent shall only be required if such event or condition, together
with all other events or conditions referred to in clauses (i) through (vi)
above, could reasonably be expected to result in liability of Holdings, the
Borrower or any Subsidiary in an aggregate amount exceeding $2,000,000.
SECTION 5.7 Maintaining Records; Access; Inspections. Maintain all
financial records in accordance with GAAP and permit any Persons designated by
the Administrative Agent or any Lender to visit and inspect the financial
records and the properties of the Loan Parties at reasonable times, upon
reasonable prior notice to the Borrower, and as often as reasonably requested
and to make extracts from and copies of such financial records, and permit any
Persons designated by the Administrative Agent or any Lender upon reasonable
prior notice to the Borrower to discuss the affairs, finances and condition of,
any Loan Party with the officers thereof and independent accountants therefor
(subject to reasonable requirements of confidentiality, including requirements
imposed by law or by contract), in each case to be at the expense of the
Borrower if an Event of Default has occurred and is continuing.
SECTION 5.8 Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
recitals to this Agreement.
SECTION 5.9 Compliance with Environmental Laws. Comply, and make
reasonable best efforts to cause all lessees and other Persons occupying its
currently owned or leased properties to comply, with all Environmental Laws and
Environmental Permits applicable to its operations and Properties, except in the
case of such noncompliance as could not reasonably be expected to result in a
Material Adverse Effect; obtain and renew all material Environmental Permits
necessary for its operations and currently owned or leased properties, and
conduct, to the extent required under Environmental Laws, any material Remedial
Action in accordance with Environmental Laws except, in each of the foregoing,
as could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.10 Preparation of Environmental Reports. If a Default caused
by reason of a breach of Section 3.17 or 5.9 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to Lenders within 90 days after such request, at the expense of
the Borrower, an environmental site assessment report for the
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properties that are the subject of such default prepared by an environmental
consulting firm reasonably acceptable to the Administrative Agent, indicating
the presence or absence of Hazardous Materials and the estimated cost of any
Remedial Action required under any applicable Environmental Law in connection
with such properties.
SECTION 5.11 Additional Guaranties; Security; Further Assurances.
(a) Additional Subsidiary Guarantors. Take, and will
cause each of their Subsidiaries (other than Foreign Subsidiaries, except to the
extent provided in subsection (c) below, and Non-Wholly-Owned Subsidiaries) to
take, such actions from time to time as shall be necessary to ensure that all
Subsidiaries of the Borrower (other than Foreign Subsidiaries, except to the
extent provided in subsection (c) below, and Non-Wholly-Owned Subsidiaries) are
Subsidiary Guarantors. Without limiting the generality of the foregoing, in the
event that the Borrower shall form or acquire any such new Subsidiary, the
Borrower, as soon as practicable and in any event within 30 days after such
formation or acquisition, will provide the Administrative Agent with notice of
such formation or acquisition, setting forth in reasonable detail a description
of all of the assets of such new Subsidiary and will cause such new Subsidiary
to:
(i) within 45 days after such formation or acquisition,
execute a joinder agreement in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders
pursuant to which such new Subsidiary shall agree to become a
"Guarantor" under the Subsidiary Guarantee Agreement, and grantor,
pledgor, mortgagor or the like under the applicable Security Documents;
(ii) if such Person owns any real property located in the
United States the value of which exceeds $500,000, to execute and
deliver to the Administrative Agent such mortgages, deeds of trust or
other agreements or instruments covering such real property and
fixtures as shall be necessary to create and perfect valid and
enforceable Liens (subject only to Permitted Liens) on such real
property and fixtures as collateral security for the Obligations,
together in each case with such Uniform Commercial Code financing
statements, environmental reports, title insurance policies, and
surveys, as the Administrative Agent or the Required Lenders may
reasonably request;
(iii) to the extent not otherwise covered pursuant to
clause (ii) above, take such actions (including delivering such
securities, other investment property or instruments and authorizing
such Uniform Commercial Code financing statements) as shall be
necessary to create and perfect valid and enforceable first priority
Liens (subject only to Permitted Liens) on all or substantially all of
the assets of such new Subsidiary as collateral security for the
Obligations, as requested by the Required Lenders; and
(iv) deliver such proof of organizational authority,
incumbency of officers, opinions of counsel and other documents as is
consistent with those
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delivered by each Loan Party pursuant to Section 4.2 on the Closing
Date or as the Administrative Agent or the Required Lenders shall have
requested.
(b) Additional Security.
(i) Cause, and will cause each of their Subsidiaries
(other than a Foreign Subsidiary, except to the extent provided in
subsection (c) below, and Non-Wholly-Owned Subsidiaries) to cause, (A)
all of their owned real properties with a value greater than $500,000
and personal property located in the United States, and (B) all other
material assets of the Borrower and such Subsidiaries as are not
covered by the original Security Documents and as may be reasonably
requested by the Administrative Agent or the Required Lenders in their
discretion to be subject at all times to first priority (subject only
to Permitted Liens), perfected and, in the case of real property, title
insured Liens in favor of the Administrative Agent pursuant to the
Security Documents or such other security agreements, pledge
agreements, mortgages or similar collateral documents as the
Administrative Agent or the Required Lenders shall request in its or
their sole, reasonable discretion (collectively, the "Additional
Security Documents"). With respect to any owned real property with a
value greater than $500,000 located in the United States acquired by
any Loan Party subsequent to the initial Borrowing Date, such Person
will cause to be delivered to the Administrative Agent with respect to
such property, documents, instruments, including mortgages, deeds of
trust, deeds to secure debt, title insurance policies, surveys, flood
hazard certifications, environmental reports and legal opinions, all in
form, content and scope reasonably satisfactory to the Administrative
Agent and the Required Lenders. In furtherance of the foregoing terms
of this Section 5.11, the Borrower agrees to promptly provide the
Administrative Agent with written notice of the acquisition by any Loan
Party of any owned real property located in the United States having a
value greater than $500,000, setting forth in reasonable detail the
location and a description of the asset(s) so acquired. Without
limiting the generality of the foregoing, Holdings and the Borrower
will cause, and will cause each of their respective Subsidiaries to
cause, 100% of the issued and outstanding Capital Stock of all Domestic
Subsidiaries owned by Holdings, the Borrower or any other Subsidiary
(other than the Capital Stock of Service America/National Business
Services Enterprises Joint Venture and Service America Corporation -
Service Systems Associates), and 65% of the issued and outstanding
Capital Stock of all First Tier Foreign Subsidiaries (except as
provided in subsection (c) below) owned by Holdings, the Borrower or
any Domestic Subsidiary, to be subject at all times to a first
priority, perfected Lien in favor of the Administrative Agent pursuant
to the terms and conditions of the Security Documents
(ii) All security interests, mortgages and pledges shall
be granted pursuant to documentation reasonably satisfactory in form
and substance to the Administrative Agent and the Required Lenders, and
shall constitute valid and enforceable perfected security interests,
mortgages and pledges superior to and prior to the rights of all third
Persons and subject to no other Liens except for Permitted Liens. The
Additional Security Documents or instruments related
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thereto shall have been duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Administrative Agent required to be
granted pursuant to the Additional Security Documents, and all taxes,
fees and other charges payable in connection therewith shall have been
paid in full. The Borrower shall cause to be delivered to the
Administrative Agent such opinions of counsel, title insurance and
other related documents as may be reasonably requested by the
Administrative Agent to assure itself that this Section 5.11 has been
complied with.
(c) Foreign Subsidiaries Security. If the Administrative
Agent or the Required Lenders provide written notice to the Borrower that there
has been a change in the relevant sections of the Code or the regulations,
published rulings or notices, or other official pronouncements issued or
promulgated thereunder (and the Borrower agrees in its reasonable judgment that
such change has occurred), seek an opinion from counsel (which shall be chosen
by the Borrower and reasonably satisfactory to the Administrative Agent), with
respect to any Foreign Subsidiary of the Borrower which has not already had all
of its stock pledged pursuant to the Pledge Agreement, that (i) a pledge (A) of
65% or more of the total combined voting power of all classes of capital stock
of such Foreign Subsidiary entitled to vote, or (B) of any promissory note
issued by such Foreign Subsidiary to the Borrower or any of its Domestic
Subsidiaries, (ii) the entering into by such Foreign Subsidiary of a guaranty in
form and substance substantially identical to the Subsidiary Guarantee
Agreement, (iii) the entering into by such Foreign Subsidiary of a security
agreement in form and substance substantially identical to the Security
Agreement, or (iv) the entering into by such Foreign Subsidiary of a pledge
agreement in form and substance substantially identical to the Pledge Agreement,
in any such case would not cause the undistributed earnings of such Foreign
Subsidiary as determined for United States federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent
for United States federal income tax purposes, and would not have any other
materially adverse United States federal income tax consequences to the Borrower
or any of its Affiliates. If the Borrower receives an opinion of counsel (A) to
effect 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 Administrative Agent for the benefit of the
Secured Parties pursuant to the Pledge Agreement (or another pledge agreement in
substantially identical form, if needed), (B) to the effect described in clause
(ii) above, such Foreign Subsidiary shall execute and deliver the Subsidiaries
Guaranty (or another guaranty in substantially identical form, if needed),
guaranteeing the Obligations; (C) to the effect described in clause (iii) above,
such Foreign Subsidiary shall execute and deliver the Security Agreement (or
another security agreement in substantially identical form, if needed), granting
to the Administrative Agent, for the benefit of the Secured Parties, a security
interest in all of such Foreign Subsidiary's assets and securing the Secured
Obligations; or (D) to the effect described in clause (iv) above, such Foreign
Subsidiary shall execute and deliver the Pledge Agreement (or another pledge
agreement in substantially identical form, if needed), pledging to the
Administrative Agent, for the benefit of the Secured Parties, all of the Capital
Stock and promissory notes owned by such Foreign Subsidiary, in each case to the
extent that entering into such Subsidiaries Guaranty, Security Agreement or
Pledge Agreement is permitted by the laws of the respective foreign
jurisdiction, and with all documents delivered pursuant to this
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Section 5.11(c) shall be in form, scope and substance reasonably satisfactory to
the Administrative Agent and the Required Lenders.
(d) Further Assurances. Holdings and the
Borrower will, and will cause each of the other Loan Parties to, at the expense
of the Borrower, make, execute, endorse, acknowledge, file and/or deliver to the
Administrative Agent from time to time such vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports,
landlord waivers, Control Agreements and other assurances or instruments and
take such further steps relating to the Collateral covered by any of the
Security Documents as the Administrative Agent, the Administrative Agent and the
Required Lenders may reasonably require.
(e) Appraisals. If the Administrative Agent or
any Lender reasonably determines that they are required by law or regulation to
have appraisals prepared in respect of any real property of the Borrower and its
Subsidiaries constituting Collateral, the Borrower will, at its own expense,
provide to the Administrative Agent appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which
shall otherwise be in form and substance reasonably satisfactory to the
Administrative Agent.
(f) General. Holdings and the Borrower each
agree that each action required by clauses (a) through (e) of this Section 5.11
shall be completed as soon as possible, but in no event later than 45 days (or
such shorter time period expressly provided herein) after such action is
requested to be taken by the Administrative Agent or the Required Lenders, as
the case may be; provided that, in no event will Holdings or any of its
Subsidiaries be required to take any action, other than using its best efforts,
to obtain consents from third parties with respect to its compliance with this
Section 5.11.
SECTION 5.12 Fiscal Year; Accounting. In the case of each Loan Party,
cause its respective Annual Fiscal Period to end on the Tuesday closest to
December 31 of such Annual Fiscal Period and its respective first, second and
third Quarterly Fiscal Periods to end on the Tuesday closest to March 31, June
30 and September 30, respectively, of such Annual Fiscal Period.
SECTION 5.13 Dividends. In the case of the Borrower, permit its
Subsidiaries to pay Dividends to Loan Parties and cause such Dividends to be
paid to Loan Parties to the extent required to pay the monetary obligations of
the Borrower, subject to any prohibitions that may be imposed by applicable
requirements of law.
SECTION 5.14 Compliance with Statutes, etc. Comply with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by,
all Governmental Authorities, 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
non-compliances as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
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ARTICLE VI
NEGATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees with
each Lender that, so long as this Agreement shall remain in effect and until the
Commitments have been terminated and the principal of and interest on all Loans
and Term Notes, all Fees and all other expenses or amounts payable under any
Loan Document have been paid in full and all Letters of Credit have been
cancelled or have expired and all amounts drawn thereunder have been reimbursed
in full, unless the Required Lenders shall otherwise consent in writing, none of
the Loan Parties will, and will not cause or permit any of their respective
Subsidiaries to:
SECTION 6.1 Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness of the Borrower and its
Subsidiaries existing on the date hereof and set forth in Schedule 6.1, but not
any extensions, renewals or replacements of such Indebtedness except (i)
renewals and extensions expressly provided for in the agreements evidencing any
such Indebtedness as the same are in effect on the date of this Agreement and
(ii) refinancings and extensions of any such Indebtedness if the average life to
maturity thereof is greater than or equal to that of the Indebtedness being
refinanced or extended, provided that such Indebtedness permitted under clause
(i) or clause (ii) above shall not be (A) Indebtedness of an obligor that was
not an obligor with respect to the Indebtedness being extended, renewed or
refinanced, (B) in a principal amount which exceeds the Indebtedness (plus
accrued interest and premiums thereon) being renewed, extended or refinanced or
(C) incurred, created or assumed if any Default or Event of Default has occurred
and is continuing or would result therefrom;
(b) Indebtedness created hereunder and under the
other Loan Documents;
(c) in the case of the Guarantors, their
respective Guaranties under the Guarantee Agreements;
(d) Indebtedness of any Loan Party or its
Subsidiaries owed to (including obligations in respect of letters of credit for
the benefit of) any Person providing worker's compensation, health, disability
or other employee benefits or property, casualty or liability insurance to such
Loan Party or its Subsidiaries, pursuant to reimbursement or indemnification
obligations to such Person and Indebtedness in respect of insurance premiums;
(e) Indebtedness of any Foreign Subsidiary or
Non-Wholly-Owned Subsidiary owed to the Borrower and the other Subsidiaries so
long as the aggregate amount of Non-Guarantor Expenditures outstanding at any
time, including such Indebtedness and all Non-Guarantor Expenditures made prior
to the Closing Date that remain outstanding, does not exceed $13,000,000 in the
aggregate;
(f) Indebtedness of any Loan Party owed to any
other Loan Party;
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(g) Indebtedness of a Loan Party or a Subsidiary
thereof in respect of performance bonds, bid bonds, appeal bonds, completion
guaranties, surety bonds and similar obligations and trade related letters of
credit, in each case provided in the ordinary course of business, including
those incurred to secure health, safety and environmental obligations in the
ordinary course of business, and any extension, renewal or refinancing thereof
to the extent not provided to secure the repayment of other Indebtedness and to
the extent that the amount of refinancing Indebtedness is not greater than the
amount of Indebtedness being refinanced;
(h) Indebtedness of a Loan Party or a Subsidiary
thereof arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument drawn against insufficient funds in the
ordinary course of business, provided that such Indebtedness is extinguished
within two Business Days of its incurrence;
(i) Capital Lease Obligations, mortgage
financings and purchase money Indebtedness in an aggregate principal amount
outstanding at any time not in excess of $5,000,000 incurred by a Loan Party or
a Subsidiary thereof prior to or within 270 days after a Capital Expenditure in
order to finance such Capital Expenditure, and extensions, renewals and
refinancings thereof if the interest rate with respect thereto and other terms
thereof are no less favorable to such Loan Party or a Subsidiary thereof than
the Indebtedness being refinanced and the average life to maturity thereof is
greater than or equal to that of the Indebtedness being refinanced, provided
that such refinancing Indebtedness shall not be (i) Indebtedness of an obligor
that was not an obligor with respect to the Indebtedness being extended, renewed
or refinanced (plus unpaid accrued interest and premiums thereon), (ii) in a
principal amount that exceeds the Indebtedness being renewed, extended or
refinanced or (iii) incurred, created or assumed if any Default or Event of
Default has occurred and is continuing or would result therefrom;
(j) Indebtedness of any Loan Party or a
Subsidiary thereof supported by a Letter of Credit, in a principal amount not in
excess of the stated amount of such Letter of Credit;
(k) Indebtedness arising from agreements of a
Loan Party or a Subsidiary thereof providing for reasonable and customary
indemnification, adjustment of purchase price or similar obligations, in each
case incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary;
(l) Borrower Intercompany Indebtedness, provided
that (i) such Indebtedness shall be subordinated pursuant to the Borrower
Intercompany Subordination Agreement and (ii) Holdings shall have pledged its
rights in respect of such Indebtedness pursuant to the Loan Documents;
(m) the Holdings Subordinated Notes (including
additional Holdings Subordinated Notes issued after the Closing Date in
connection with the sale of IDSs) and guarantees thereof and of related
obligations by the Loan Parties, provided that all such Indebtedness shall be
subordinated to payment of the Obligations on terms and conditions set forth in
the Subordinated Note Indenture;
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(n) all premium (if any), interest (including
post-petition interest), fees, expenses, indemnities, charges and additional or
contingent interest on obligations described in clauses (a) through (m) above;
(o) at all times prior to March 1, 2004,
Existing Subordinated Notes in an aggregate amount outstanding not to exceed
[$18,250,000]; and
(p) other Indebtedness (other than for borrowed
money) not to exceed $2,000,000 at any time.
SECTION 6.2 Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any Person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, or sell or transfer any account
receivable or any right in respect thereof, except:
(a) Liens on property or assets of the Loan
Parties or their Subsidiaries existing on the date hereof and set forth in
Schedule 6.2, provided that such Liens shall secure only those obligations that
they secure on the date hereof (and extensions, renewals and refinancings of
such obligations permitted by Section 6.1(a)) and shall not subsequently apply
to any other property or assets of such Loan Parties;
(b) any Lien created under the Loan Documents;
(c) Liens for taxes, assessments or other
governmental charges or levies not yet delinquent, or that are being contested
in compliance with Section 5.3;
(d) carriers', warehousemen's, mechanic's,
materialmen's, repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due and payable or that are being
contested in good faith by appropriate proceedings and in respect of which, if
applicable, the appropriate Loan Party or a Subsidiary thereof shall have set
aside on its books reserves in accordance with GAAP;
(e) pledges and deposits made in the ordinary
course of business in compliance with the Federal Employers Liability Act or any
other workmen's compensation, unemployment insurance and other social security
laws or regulations and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements in respect of such obligations;
(f) deposits to secure the performance of bids,
trade contracts (other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds, performance bonds,
completion guarantees and other obligations of a like nature incurred in the
ordinary course of business, including those incurred to secure health, safety
and environmental obligations in the ordinary course of business;
(g) zoning restrictions, easements, trackage
rights, leases (other than Capital Lease Obligations), licenses, special
assessments, rights-of-way, restrictions on use of real property and other
similar encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and do not materially detract from the
value of the
83
property subject thereto or interfere with the ordinary conduct of the business
of any Loan Party or a Subsidiary thereof;
(h) Liens on capital assets, real property,
improvements thereto or equipment hereafter acquired (or, in the case of
improvements, constructed) by a Loan Party or a Subsidiary thereof (including
the interests of vendors and lessors under conditional sale and title retention
agreements and capitalized lease obligations), provided that (i) such Liens
secure only the Indebtedness permitted by Section 6.1(i), (ii) the Indebtedness
secured thereby does not exceed 100% of the cost of such capital assets, real
property, improvements or equipment at the time of such acquisition, improvement
or completion of construction thereof, (iii) such expenditures are permitted by
this Agreement and (iv) such Lien does not secure any other property or assets
of the Loan Parties or their Subsidiaries (other than accessions to such capital
assets, real property, improvements or equipment and provided that individual
financings of equipment provided by a single lender may be cross-collateralized
to other financings of equipment provided solely by such lender);
(i) the sale of defaulted accounts receivable in
connection with the liquidation of such claims consistent with past practices of
the Borrower and its Subsidiaries;
(j) Liens securing judgments for the payment of
money in an aggregate amount not in excess of $5,000,000 (except to the extent
covered by insurance as to which the insurer has acknowledged in writing its
obligation to cover), unless such judgments shall remain undischarged for a
period of more than 30 consecutive days during which execution shall not be
effectively stayed;
(k) precautionary UCC filings made with respect
to operating leases pursuant to which Holdings or any of its Subsidiaries are
the lessee;
(l) any leases or subleases to other persons of
properties or assets owned or leased by a Loan Party or a Subsidiary thereof;
(m) Liens that are contractual rights of set-off
(i) relating to the establishment of depository relations with banks not given
in connection with the issuance of Indebtedness or (ii) pertaining to pooled
deposit and/or sweep accounts of a Loan Party or a Subsidiary thereof to permit
satisfaction of overdraft or similar obligations incurred in the ordinary course
of business of the Loan Parties and their Subsidiaries, to the extent that
commencing 90 days after the Closing Date, all such accounts of Loan Parties are
subject to Control Agreements duly executed and delivered by the applicable Loan
Party and the applicable bank;
(n) the replacement, extension or renewal of any
Lien permitted by clause (h) above, provided that such replacement, extension or
renewal Lien shall not cover any property other than the property that was
subject to such Lien prior to such replacement, extension or renewal; and
provided further that the Indebtedness and other obligations secured by such
replacement, extension or renewal Lien are permitted by this Agreement;
(o) Liens required to be created pursuant to the
terms of any Permitted Service Contract; provided, that such Liens shall (i)
apply only to tangible property located at the
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property subject to such Permitted Service Contract and (ii) be limited to
$2,000,000 in the aggregate at any time; and
(p) Liens on assets consisting of the obligation
to return or resell assets, at the termination of, or to perform under the terms
of, a Service Contract, and Liens on assets acquired pursuant thereto.
SECTION 6.3 Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
SECTION 6.4 Investments, Loans and Advances. Purchase, hold or acquire
any capital stock, evidences of Indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other Person, except:
(a) investments (i) existing on the date hereof
in the Capital Stock of the Subsidiaries; (ii) by Holdings in the common stock
of the Borrower; (iii) by the Borrower or any Subsidiary in any Subsidiary
Guarantor; (iv) by any Loan Party or any Subsidiary in Foreign Subsidiaries,
Non-Wholly-Owned Subsidiaries and joint ventures in which the Borrower or a
Subsidiary owns Capital Stock, provided that the aggregate amount of
Non-Guarantor Expenditures outstanding at any time, including the aggregate
amount of the consideration (whether cash or property, as valued at the time
each such investment is made) for all investments made pursuant to this clause
(iv) and all Non-Guarantor Expenditures made prior to the Closing Date that
remain outstanding, does not exceed $13,000,000 in the aggregate;
(b) Permitted Liquid Investments, together with
investments that were Permitted Liquid Investments when made pursuant to clauses
(a) through (e) of the definition thereof but only until the maturity of such
investments and excluding any extensions, renewals or rollovers thereof;
(c) investments arising out of the receipt by
the Borrower or any Subsidiary of non-cash consideration for the sale of assets,
provided that such consideration (if the stated amount or value thereof is in
excess of $500,000) is pledged upon receipt pursuant to the Pledge Agreement to
the extent required thereby;
(d) Indebtedness among Loan Parties and their
Subsidiaries permitted under Section 6.1;
(e) loans and advances to officers, directors
and employees (and partnerships for their benefit) of any Loan Party, whether in
respect of salary advances, for payment of taxes or otherwise, provided,
however, that the aggregate amount of such loans and advances, including those
outstanding on the Closing Date and refinancings thereof, shall not exceed
$2,000,000 at any time;
85
(f) (i) accounts receivable arising and trade
credit granted in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors to the extent reasonably necessary in order to prevent or limit loss and
(ii) prepayments and other credits to suppliers made in the ordinary course of
business which is consistent with the past practices of Holdings, the Borrower
and the Subsidiaries;
(g) investments existing on the Closing Date and
set forth on Schedule 6.4;
(h) investments resulting from pledges and
deposits referred to in Section 6.2(e) or (f);
(i) investments permitted by Section 6.5(a) and
Section 6.16(b);
(j) loans and other investments by the Borrower
or any of its Subsidiaries to customers made in connection with entering into a
Permitted Service Contract; provided, however, that such loans and other
investments may not exceed $10,000,000 in any Annual Fiscal Period or
$20,000,000 in aggregate amount outstanding at any time (such loans to be
included in the calculation of Consolidated Service Contract Capital
Expenditures); and
(k) investments (other than loans and advances
to officers, directors or employees of Holdings and its Subsidiaries) funded
with proceeds from the issuance of Capital Stock of Holdings described in clause
(b) of the first parenthetical phrase of the definition of "Equity Offering
Proceeds", to the extent such proceeds are not required to prepay the
Obligations under Section 2.10, and are not applied to Capital Expenditures
under Section 6.15 or investments permitted under Section 6.5(a);
(l) investments in assets useful in the business
of the Borrower and the Subsidiaries funded with proceeds that would constitute
Asset Sale Proceeds but for the first proviso of the definition thereof, or that
would constitute Insurance Proceeds but for the first proviso of the definition
thereof.
SECTION 6.5 Mergers; Consolidations; Sales of Assets; Acquisitions.
Merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or any substantial
part of its assets (whether now owned or hereafter acquired), or purchase, lease
or otherwise acquire (in one transaction or a series of transactions) all or any
substantial part of the assets of any other Person, except that this Section 6.5
shall not prohibit:
(a) Permitted Business Acquisitions, provided
that the maximum aggregate purchase price expended in connection with all such
acquisition(s) during the term of this Agreement shall not exceed (i)
$35,000,000 plus (ii) any proceeds from the issuance of Capital Stock of
Holdings described in clause (b) of the first parenthetical phrase of the
definition of "Equity Offering Proceeds", to the extent such proceeds are not
required to prepay the Obligations under Section 2.10, and are not applied to
Capital Expenditures under Section 6.15 or investments permitted under Section
6.4(k); provided, further that in no event shall the
86
maximum aggregate purchase price expended in connection with all such
acquisition(s) during the term of this Agreement by Subsidiaries that are not
Loan Parties exceed $5,000,000;
(b) if at the time thereof and immediately after
giving effect thereto no Event of Default or Default shall have occurred and be
continuing, (i) the merger of any Wholly-Owned Subsidiary into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) the merger
or consolidation of any Subsidiary Guarantor into or with any other Subsidiary
Guarantor and (iii) the merger or consolidation of any Non-Wholly Owned
Subsidiary or any joint venture in which the Borrower or a Subsidiary owns 50%
of the Capital Stock as long as the surviving entity is a Loan Party and the
aggregate amount of consideration paid to the equity holders of such joint
venture as part of such merger or consolidation would be permitted under Section
6.15 (excluding clause (a) thereof);
(c) sales, leases or transfers of assets or
property from the Borrower or any Subsidiary to any Non-Wholly-Owned Subsidiary
provided that all Non-Guarantor Expenditures outstanding at any time, including
the aggregate net value (after giving effect to any consideration received) of
the property to be sold, leased or transferred pursuant to this clause (c) and
all Non-Guarantor Expenditures made prior to the Closing Date that remain
outstanding, does not exceed $13,000,000 in the aggregate;
(d) the sale of any Capital Stock of any
Non-Wholly Owned Subsidiary or any joint venture in which the Borrower or a
Subsidiary owns Capital Stock, to the extent that the Equity Offering Proceeds
are applied in accordance with Section 2.10;
(e) transactions permitted by Sections 6.4 and
6.6.
SECTION 6.6 Sale of Assets. Sell, lease, transfer or otherwise dispose
of, including on liquidation, dissolution or winding-up (any such transaction
being herein called a "Disposition") any of their respective properties or
assets or any interest therein other than (a) sales of inventory in the ordinary
course of business, (b) sales and transfers of property under Service Contracts
in accordance with the terms of such Service Contracts, (c) Dispositions of
Permitted Liquid Investments; (d) disposition at fair market value of an
obsolete, surplus or unusable asset not required for the continued operation of
its business; (e) Dispositions by the Borrower and the Subsidiaries of
properties or assets (other than the disposition of a portion of the Capital
Stock of the Borrower or any Subsidiary, but including the disposition of all
Capital Stock of a Subsidiary) representing in the aggregate no more than (i)
$1,000,000 of net book value in any Annual Fiscal Period and (ii) $5,000,000 of
net book value during the term of this Agreement, (f) Dispositions to the
Borrower or any Subsidiary Guarantor and (g) transfers permitted under Sections
6.4 and 6.5.
SECTION 6.7 Transactions with Affiliates. (a) Sell or transfer any
property or assets to, or purchase or acquire any property or assets from, or
otherwise engage in any other transaction with, any of its Affiliates or any
known direct or indirect holder of 10% or more of any class of capital stock of
Holdings, unless such transaction is (x) otherwise permitted under this
Agreement and (y) consummated upon terms no less favorable to any Loan Party or
a Subsidiary thereof than it would obtain in a comparable arm's-length
transaction with a Person that was not an Affiliate, provided that the foregoing
restriction shall not apply to (i) transactions
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among Holdings, the Borrower and Subsidiaries otherwise permitted by this
Agreement, (ii) any employment agreements entered into by the Borrower or any of
the Subsidiaries in the ordinary course of business, (iii) Distributions
permitted under Section 6.16, (iv) any purchase by Holdings of Capital Stock of
the Borrower, or any contribution by Holdings to the equity capital of the
Borrower, so long as any additional Capital Stock of the Borrower is pledged to
the Administrative Agent pursuant to Section 5.11 or (v) any of the transactions
contemplated by Section 6.4.
SECTION 6.8 Business of Holdings and its Subsidiaries. (a) In the case
of each of the Borrower and the Subsidiaries, engage at any time in any business
or business activity other than the business currently conducted by it and
business activities reasonably incidental or related thereto and any other
business or business activity acquired as part of a Permitted Business
Acquisition if such other business or business activity constitutes less than
10% of the business of the Loan Parties taken on a consolidated basis at the
time of acquisition and (b) in the case of Holdings, engage at any time in any
business or business activity other than (i) the ownership of all the
outstanding capital stock of Borrower, together with activities directly related
thereto, (ii) performance of its obligations under the Loan Documents and the
other Transaction Documents and the related transactions; and (iii) if
applicable, actions required by law to maintain its status as a corporation.
SECTION 6.9 Material Agreements; Constituent Documents. (a) (i) Enter
into any Service Contract other than a Permitted Service Contract, (ii) sell,
assign, transfer or otherwise dispose of any right under or interest in any
Service Contract (other than under the Security Documents or to another Loan
Party) except in connection with a transaction permitted by Sections 6.4, 6.5 or
6.6 or (iii) amend or modify any Service Contract in any way if such Service
Contract as amended would not constitute a Permitted Service Contract if it were
entered into on the date of such amendment or modification or would otherwise
result in a Material Adverse Effect.
(b) (i) Directly or indirectly, make any
payment, retirement, repurchase or redemption on account of the principal of or
directly or indirectly prepay or defease (x) the Holdings Subordinated Notes,
the Existing Subordinated Notes or any other Indebtedness subordinated in right
of payment to the Obligations and (y) if an Event of Default has occurred, any
other Indebtedness (other than the Loan Documents), in each case prior to the
stated maturity date of such Indebtedness, (ii) make any payment or prepayment
of any such Indebtedness that would violate the terms of this Agreement or of
such Indebtedness, any agreement or document evidencing, related to or securing
the payment or performance of such Indebtedness or any subordination agreement
or provision applicable to such Indebtedness or (iii) pay in cash any amount in
respect of such Indebtedness that may at the Borrower's option be paid in kind
thereunder. Notwithstanding the foregoing, the Borrower may prepay the Existing
Subordinated Notes with the cash contained in the Existing Subordinated Notes
Cash Collateral Account at any time.
(c) Amend or modify in any manner adverse to the
Lenders, or grant any waiver or release under or terminate in any manner (if
such action shall be adverse to the Lenders), the articles or certificate of
incorporation or bylaws, or memorandum and articles of association, of any Loan
Party or any of their respective Subsidiaries.
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(d) Amend or modify the Subordinated Notes
Indenture, the Existing Subordinated Notes Indenture, any other Subordinated
Note Document, any other Existing Subordinated Note Document or any other
document or agreement governing or evidencing any other Indebtedness
subordinated in right of payment to the Obligations if the effect of such
amendment or modification is to (i) increase the interest rate applicable to the
Holdings Subordinated Notes, Deferred Subordinated Note Interest, the Existing
Subordinated Notes or any other Indebtedness governed or evidenced thereby, (ii)
change to an earlier date the scheduled dates of payment of any component of
principal, interest or other amounts thereon, (iii) increase principal
prepayments or amortization payments thereon, (iv) alter the redemption,
prepayment or subordination provisions thereof; (v) add to or alter the
covenants (including without limitation financial covenants), defaults and
events of default set forth therein in a manner that would make such provisions
more onerous or restrictive to Holdings or any Subsidiary, or (v) otherwise
increase the obligations of any Loan Party or any Subsidiary in respect of the
Holdings Subordinated Notes, Deferred Subordinated Note Interest, the Existing
Subordinated Notes or other Indebtedness governed thereby or confer additional
rights upon the holders thereof which individually or in the aggregate would be
adverse to any Loan Party or any of its Subsidiaries or to the Administrative
Agent or the Lenders.
(e) If a Material Service Contract is terminated
without being replaced with another Service Contract with no change in the
parties thereto or the properties or facilities subject thereto, fail to comply
with Sections 6.10, 6.11, and 6.12 as of the last day of the most recently ended
Monthly Fiscal Period for which a Monthly Report has been delivered, giving pro
forma effect to the termination of such Material Service Contract as if such
termination had occurred on the first day of the 12-Monthly Fiscal Periods being
tested.
SECTION 6.10 Interest Coverage Ratio. Permit the Interest Coverage
Ratio as of the last day of any Monthly Fiscal Period ending during the period
set forth below to be less than the ratio set forth below for such period:
Applicable Period: Minimum Interest Coverage Ratio:
As of the Closing Date and for all 1.80:1.00
Monthly Fiscal Periods ending
thereafter through and including the
Annual Fiscal Period 2007
Monthly Fiscal Periods ending in 1.75:1.00
Annual Fiscal Period 2008 and
thereafter
SECTION 6.11 Total Leverage Ratio. Permit the Total Leverage Ratio as
of the end of any Monthly Fiscal Period during the period set forth below to be
greater than the ratio set forth below for such Monthly Fiscal Period:
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Applicable Period: Maximum Total Leverage Ratio:
As of the Closing Date 3.50:1.00
For all Monthly Fiscal Periods ending 5.25:1.00
in Annual Fiscal Period 2003
Monthly Fiscal Periods ending in 5.10:1.00
Annual Fiscal Period 2004
Monthly Fiscal Periods ending in 5.05:1.00
Annual Fisca Period 2005
Monthly Fiscal Periods ending in 5.25:1.00
Annual Fiscal Period 2006
Monthly Fiscal Periods ending in 5.20:1.00
Annual Fiscal Period 2007
Thereafter 5.25:1.00
SECTION 6.12 Senior Leverage Ratio. Permit the Senior Leverage Ratio as
of the end of any Monthly Fiscal Period during the period set forth below to be
greater than the ratio set forth below for such Monthly Fiscal Period:
Applicable Period: Maximum Senior Leverage Ratio:
As of the Closing Date and for all 2.20:1.00
Monthly Fiscal Periods ending in
Annual Fiscal Period 2003
Monthly Fiscal Periods ending in 2.05:1.00
Annual Fiscal Period 2004
Monthly Fiscal Periods ending in 2.00:1.00
Annual Fiscal Period 2005
Monthly Fiscal Periods ending in 2.20:1.00
Annual Fiscal Period 2006 and
thereafter
SECTION 6.13 Capital Stock. Issue any Capital Stock of the Borrower or
any Subsidiary, except (x) shares of Capital Stock issued to Loan Parties and
pledged to the Administrative Agent pursuant to the Pledge Agreement and (y)
shares of Capital Stock of Foreign Subsidiaries and Non-Wholly-Owned
Subsidiaries permitted to be issued pursuant to Section 6.4(a)(iv) to the extent
that the requirements of Section 5.11 are met; sell, transfer, lease or
otherwise dispose of, or make subject to any subscription, option, warrant,
call, right or other
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agreement or commitment of any nature, the Capital Stock of any Subsidiary,
other than (a) pursuant to the Security Documents, (b) pursuant to a transaction
permitted pursuant to Sections 6.4 or 6.5 and (c) with respect to directors'
qualifying shares.
SECTION 6.14 Foreign Revenues. Permit revenues of Subsidiaries located
in countries other than the United States or Canada in any Annual Fiscal Period
to be greater than 25% of the consolidated revenues of the Loan Parties in such
Annual Fiscal Period.
SECTION 6.15 Limitations with respect to Capital Expenditures. Make any
Capital Expenditures, including without limitation Consolidated Service Contract
Capital Expenditures, other than
(a) Consolidated Service Contract Capital
Expenditures with respect to Permitted Service Contracts executed in 2003 listed
on Schedule 6.15 in an aggregate amount not to exceed $9,800,000;
(b) Consolidated Service Contract Capital
Expenditures in an aggregate amount not to exceed $10,000,000 during the term of
this Agreement;
(c) Consolidated Service Contract Capital
Expenditures which, when aggregated with consideration paid in mergers or
consolidations contemplated in Section 6.5(b)(iii) and purchases and redemptions
of Capital Stock contemplated in Section 6.16(b)(ii), do not exceed in any
Annual Fiscal Period (x) $14,000,000 plus (y) commencing in Annual Fiscal Period
2005, the aggregate unused portion of the basket in clause (x) for all preceding
Annual Fiscal Periods commencing with Annual Fiscal Period 2004;
(d) Consolidated Service Contract Capital
Expenditures made with any return of capital or repayment of Indebtedness with
respect to Capital Expenditures otherwise permitted under this Section 6.15 when
initially made or existing on the Closing Date;
(e) Capital Expenditures made with proceeds of
asset sales described in the first proviso of the definition of "Asset Sale
Proceeds", Insurance Proceeds and Unamortized Contract Value Proceeds which are
otherwise available for reinvestment to fund Consolidated Service Contract
Capital Expenditures;
(f) Capital Expenditures made with funds from
the Dividend/CapEx Funding Account; and
(g) Capital Expenditures made with the proceeds
from the issuance of Capital Stock of Holdings described in clause (b) of the
first parenthetical phrase of the definition of "Equity Offering Proceeds", to
the extent such proceeds are not required to prepay the Obligations under
Section 2.10, and are not applied to investments permitted under Sections 6.4(k)
and 6.5(a).
SECTION 6.16 Dividends and Distributions. Authorize, declare or pay, or
permit any of its Subsidiaries to authorize, declare or pay, any Distributions;
provided, however, that:
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(a) any Subsidiary of the Borrower may declare
and pay cash Distributions to any Loan Party, or in the case of Non-Wholly-Owned
Subsidiaries, to the Borrower or any Subsidiary and to each other owner of
Capital Stock of such Non-Wholly-Owned Subsidiary on a pro rata basis (or more
favorable basis from the perspective of the Borrower or such Subsidiary) based
on their relative ownership interests);
(b) the Borrower or any Subsidiary may purchase
or redeem the Capital Stock of any minority shareholder of a Non-Wholly Owned
Subsidiary or any equity holder of Capital Stock in any joint venture in which
the Borrower or any Subsidiary also owns Capital Stock, provided that (i) that
such purchase or redemption results in such Non-Wholly-Owned Subsidiary or joint
venture entity becoming a Wholly-Owned Subsidiary and a Loan Party, and (ii)
such purchase or redemption of Capital Stock would be permitted under Section
6.15 (excluding clause (a) thereof);
(c) the Borrower may make Distributions
consisting of Dividends or payments on the Borrower Intercompany Indebtedness to
Holdings for the purpose of funding Holdings Administrative Expenses in an
amount not to exceed during any Annual Fiscal Period the lesser of (i)
$1,000,000 or (ii) the amounts budgeted therefore in the Borrower's Projections
most recently delivered pursuant to the Lenders to Section 4.2(r) or Section
5.4(g), as the case may be;
(d) the Borrower and any Subsidiary may make
Distributions consisting of Dividends or payments on the Borrower Intercompany
Indebtedness and Guarantees thereof, directly or indirectly, to Holdings for the
purpose of funding tax liabilities of Holdings that are payable in cash, in each
case to the extent incurred by Holdings in connection with its direct or
indirect ownership of the Borrower and its Subsidiaries;
(e) so long as (i) no Event of Default has
occurred and is continuing, (ii) no Interest Deferral Period is in effect
pursuant to Section 6.18, (iii) all Deferred Subordinated Note Interest has been
paid in full, (iv) no Dividend Suspension Period is in effect pursuant to
Section 6.19, and (v) funds in the Cash Collateral Account are at least equal to
the Cash Collateral Minimum Balance, Holdings may declare and pay Dividends to
the holders of its Capital Stock monthly on each Dividend Payment Date
(commencing as of the Dividend Payment Date which occurs in the first full
Monthly Fiscal Period after the Closing Date), in an amount that does not exceed
the Dividend Payment Amount as of the last day of the Monthly Fiscal Period for
which the most recent Monthly Report has been delivered, and the Borrower may
make Distributions consisting of Dividends or payments on the Borrower
Intercompany Indebtedness to Holdings on (or the Business Day immediately
preceding) such Dividend Payment Date for the purpose of funding such Dividends
paid by Holdings;
(f) subject to the terms of the Article 10 of
the Subordinated Note Indenture and so long as no Interest Deferral Period is in
effect pursuant to Section 6.18, Holdings may pay interest on the Holdings
Subordinated Notes and interest on the Deferred Subordinated Note Interest in
cash on each Subordinated Note Interest Payment Date (commencing as of the
Subordinated Note Interest Payment Date which occurs in the first full Monthly
Fiscal Period after the Closing Date), in an amount that does not exceed the
Available Cash for the most recently ended Monthly Fiscal Period for which a
Monthly Report has been
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delivered and the Borrower may make Distributions on the Borrower Intercompany
Indebtedness to Holdings on (or the Business Day immediately preceding) such
Subordinated Note Interest Payment Date for the purpose of funding such
Distributions paid by Holdings; and
(g) subject to the terms of the Article 10 of
the Subordinated Note Indenture and so long as no Interest Deferral Period is in
effect pursuant to Section 6.18, Holdings may pay the Deferred Subordinated Note
Interest (i) at any time from the funds in the Dividend/CapEx Funding Account
or, to the extent permitted by Section 2.22, from the funds in the CapEx Funding
Account; provided, that any funds withdrawn from the Dividend/CapEx Funding
Account and CapEx Funding Account to pay Deferred Subordinated Note Interest are
applied to pay such Deferred Subordinated Note Interest within one Business Day
of such withdrawal and (ii) otherwise on each Subordinated Note Interest Payment
Date from Available Cash (to the extent remaining after the payment of interest
permitted under paragraph (i) above); provided that with respect to payments
pursuant to clause (ii), (x) at any time on or prior to the fourth anniversary
of the Closing Date if the payment of interest has been deferred pursuant to
Section 6.18 for three consecutive Subordinated Note Interest Payment Dates or
for six cumulative Subordinated Note Interest Payment Dates since the Closing
Date and (y) at any time after the fourth anniversary of the Closing Date,
Deferred Subordinated Note Interest may only be paid to the extent that after
giving pro forma effect to the amount of Deferred Subordinated Note Interest to
be paid, the Senior Leverage Ratio measured as of the last day of the most
recently ended Monthly Fiscal Period for which a Monthly Report has been
delivered would be less than 1.25:1.0; provided, further that if the Monthly
Report for the most recently ended Monthly Fiscal Period has not been timely
delivered in accordance with Section 5.4(a), no payments of Deferred
Subordinated Note Interest may be paid under clause (ii) of this paragraph (g);
SECTION 6.17 Holdings' Use of Distributions from Borrower. Holdings
shall promptly utilize the proceeds of any and all Distributions from the
Borrower on the Borrower's Capital Stock and on the Borrower Intercompany
Indebtedness received by it from time to time for the purposes expressly
contemplated in Section 6.16, and for no other purpose. Any such amounts
received from time to time by Holdings that are not so applied within five
Business Days of receipt shall be transferred by Holdings to the Borrower as a
capital contribution.
SECTION 6.18 Deferral of Subordinated Note Interest. If on any
Subordinated Note Interest Payment Date, (a) the Interest Coverage Ratio, the
Total Leverage Ratio or the Senior Leverage Ratio as of the last day of the most
recently ended Monthly Fiscal Period for which a Monthly Report has been
delivered does not meet the threshold required in clauses (i), (ii) or (iii),
respectively, below, as reported in such Monthly Report, or (b) the Monthly
Report for the second Monthly Fiscal Period immediately preceding such
Subordinated Note Interest Payment Date is not timely delivered to the Lenders
pursuant to Section 5.4(a) for such Monthly Fiscal Period, then the payment of
interest on the Holdings Subordinated Notes and on Deferred Subordinated Note
Interest otherwise due and payable on such Subordinated Note Interest Payment
Date shall be deferred to the fifth anniversary of the Closing Date, payment of
interest on a Subordinated Note Interest Payment Date will be deferred on the
Holdings Subordinated Notes if on the last day of the Monthly Fiscal Period for
which a Monthly Report was most recently delivered prior to such Subordinated
Note Interest Payment Date:
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(i) The Interest Coverage Ratio is less than:
Applicable Period: Minimum Interest Coverage Ratio
Monthly Fiscal Periods ending in 1.95:1.00
Annual Fiscal Periods 2003 through
2005
Monthly Fiscal Periods ending in 1.90:1.00
Annual Fiscal Period 2006 and
thereafter
(ii) The Total Leverage Ratio is greater than:
Applicable Period: Maximum Total Leverage Ratio
Monthly Fiscal Periods ending in 4.95:1.00
Annual Fiscal Period 2003
Monthly Fiscal Periods ending in 4.80:1.00
Annual Fiscal Period 2004
Monthly Fiscal Periods ending in 4.70:1.00
Annual Fiscal Period 2005
Monthly Fiscal Periods ending in 4.95:1.00
Annual Fiscal Period 2006
Monthly Fiscal Periods ending in 4.90:1.00
Annual Fiscal Period 2007 and
thereafter
OR
(iii) The Senior Leverage Ratio is greater than:
Applicable Period: Maximum Senior Leverage Ratio
Monthly Fiscal Periods ending in 2.10:1.00
Annual Fiscal Period 2003
Monthly Fiscal Periods ending in 1.95:1.00
Annual Fiscal Period 2004
Monthly Fiscal Periods ending in 1.85:1.00
Annual Fiscal Period 2005
Monthly Fiscal Periods ending in 2.10:1.00
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Annual Fiscal Period 2006
Monthly Fiscal Periods ending in 2.05:1.00
Annual Fiscal Period 2007 and
thereafter
Notwithstanding the foregoing or any other provision of any Loan Document, but
subject to the terms of Article 10 of the Subordinated Notes Indenture, (i) the
payment of no more than twenty four (24) months of interest on the Holdings
Subordinated Notes in the aggregate may be deferred during the initial five-year
period during which the Holdings Subordinated Notes are outstanding, [(II) THE
PAYMENT OF INTEREST ON THE HOLDINGS SUBORDINATED NOTES MAY BE DEFERRED FOR NO
MORE THAN TEN (10) SUBORDINATED NOTE INTEREST PAYMENT DATES IN THE AGGREGATE
DURING ANY SUBSEQUENT FIVE-YEAR PERIOD DURING WHICH THE HOLDINGS SUBORDINATED
NOTES ARE OUTSTANDING](3) and (iii) the payment of interest on the Holdings
Subordinated Notes shall not be deferred (A) after the fifth anniversary of the
Closing Date unless all Deferred Subordinated Note Interest accrued on and prior
to such fifth anniversary (together with accrued and unpaid interest thereon)
has been paid in cash or (B) if an Event of Default (as defined in the
Subordinated Note Indenture) has occurred and is continuing and payment of the
Holdings Subordinated Notes has been accelerated. Notwithstanding anything
contained in the Loan Documents to the contrary, but subject to the provisions
of Article 10 of the Subordinated Notes Indenture, all Deferred Subordinated
Note Interest, all unpaid interest thereon and all unpaid interest on the
Holdings Subordinated Notes may be paid on the fifth anniversary of the Closing
Date.
Payments of current interest on the Holdings Subordinated Notes and current
interest on Deferred Subordinated Note Interest may resume once (x) the Interest
Coverage Ratio is greater than the level set forth above and the Total Leverage
Ratio and the Senior Leverage Ratio are less than the levels set forth above,
all on a subsequent Subordinated Note Interest Payment Date and (y) all
conditions set forth in Section 6.16(f) have been satisfied. Payments of
Deferred Subordinated Note Interest may resume once (x) the Interest Coverage
Ratio is greater than the level set forth above and the Total Leverage Ratio and
the Senior Leverage Ratio are less than the levels set forth above, all on a
subsequent Subordinated Note Interest Payment Date and (y) all conditions set
forth in Section 6.16(g) have been satisfied.
SECTION 6.19 Suspension of Dividend Payments on Holdings Capital Stock.
If on any Dividend Payment Date, (a) the Interest Coverage Ratio, the Total
Leverage Ratio or the Senior Leverage Ratio as of the last day of the most
recently ended Monthly Fiscal Period for which a Monthly Report has been
delivered does not meet the threshold required in clauses (i), (ii) or (iii),
respectively, below, as reported in such Monthly Report or (b) the Monthly
Report for the second Monthly Fiscal Period immediately preceding the relevant
Dividend Payment Date is not timely delivered to the Lenders pursuant to Section
5.4(a) for such Monthly Fiscal Period, Dividends on the Capital Stock of
Holdings will be suspended. Payment of Dividends on the Capital Stock of
Holdings on a Dividend Payment Date shall be suspended if on the last day of the
Monthly Fiscal Period for which a Monthly Report was most recently delivered
prior to such Dividend Payment Date:
----------
(3) Waiting for final language form the tax lawyers.
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(i) The Interest Coverage Ratio is less than:
Monthly Fiscal Period: Minimum Interest Coverage Ratio
Monthly Fiscal Periods ending in 2.05:1.00
Annual Fiscal Periods 2003 through
2006
Monthly Fiscal Periods ending in 2.00:1.00
Annual Fiscal Period 2007 and
thereafter
(ii) The Total Leverage Ratio is greater than:
Monthly Fiscal Period: Maximum Total Leverage Ratio
Monthly Fiscal Period ending in 4.65:1.00
Annual Fiscal Period 2003
Monthly Fiscal Periods ending in 4.50:1.00
Annual Fiscal Period 2004
Monthly Fiscal Periods ending in 4.45:1.00
Annual Fiscal Period 2005
Monthly Fiscal Periods ending in 4.65:1.00
Annual Fiscal Period 2006
Monthly Fiscal Periods ending in 4.60:1.00
Annual Fiscal Period 2007 and
thereafter
OR
(iii) The Senior Leverage Ratio is greater than:
Monthly Fiscal Period: Maximum Senior Leverage Ratio
Monthly Fiscal Period ending in 1.95:1.00
Annual Fiscal Period 2003
Monthly Fiscal Periods ending in 1.85:1.00
Annual Fiscal Period 2004
Monthly Fiscal Periods ending in 1.75:1.00
Annual Fiscal Period 2005
Monthly Fiscal Periods ending in 1.95:1.00
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Annual Fiscal Period 2006
Monthly Fiscal Periods ending in 1.90:1.00
Annual Fiscal Period 2007
Monthly Fiscal Periods ending in 1.95:1.00
Annual Fiscal Period 2008 and
thereafter
Payments of Dividends on the Capital Stock of Holdings may resume once (x) the
Interest Coverage Ratio is greater than the level set forth above and the Total
Leverage Ratio and the Senior Leverage Ratio are less than the levels set forth
above, all on a subsequent Dividend Payment Date and (y) all conditions set
forth in Section 6.16(e) have been satisfied.
SECTION 6.20 Dividend/CapEx Funding Account, CapEx Funding Account,
Cash Collateral Account and Existing Subordinated Notes Cash Collateral Account.
(a) Fail to maintain at all times the Dividend/CapEx
Funding Account and the Cash Collateral Account, unless all monies contained
therein have been applied to prepay the Obligations after an Event of Default
has occurred and is continuing in accordance with Section 2.10; fail to maintain
the CapEx Funding Account at all times after the deposit therein of any portion
of Annual Excess Cash Flow for any Annual Fiscal Period, commencing with the
Annual Fiscal Period 2004, unless all monies contained therein have been applied
to prepay the Obligations after an Event of Default has occurred and is
continuing in accordance with Section 2.10 or applied in a manner contemplated
by Section 2.22; fail to maintain the Existing Subordinated Notes Cash
Collateral Account at all times prior to March 2, 2004, unless all monies
contained therein have been applied to prepay the Obligations after an Event of
Default has occurred and is continuing in accordance with Section 2.10;
(b) Withdraw funds from (i) the Dividend/CapEx Funding
Account other than to the extent permitted in Section 2.20, (ii) the Cash
Collateral Account other than to the extent permitted in Section 2.19, (iii) the
Existing Subordinated Notes Cash Collateral Account other than to the extent
permitted in Section 2.21 or (iv) the CapEx Funding Account other than to the
extent permitted in Section 2.22; and
(c) Amend, modify or change any provision of the Cash
Collateral Agreement, the Existing Subordinated Notes Cash Collateral Account or
the Control Agreements related to the Dividend/CapEx Funding Account and the
CapEx Funding Account, without the prior written consent of the Required
Lenders.
SECTION 6.21 Subordinated Debt. (i) Fail to give notice to the trustee
under the Existing Subordinated Notes Indenture on or prior to December 31, 2003
that the Borrower will redeem all Existing Subordinated Notes on Xxxxx 0, 0000,
(xx) fail to mail, or to cause the trustee under the Existing Subordinated Notes
Indenture to mail, on or prior to January 31, 2004, a notice of redemption by
first-class mail to the holders of the Existing Subordinated Notes then
outstanding, (iii) fail to redeem the Existing Subordinated Notes in full on
March 1, 2004. The Borrower will not incur or obtain commitments for more than
(x) $115,000,000 of "Senior
97
Indebtedness" permitted under Section 4.03(b)(i) of the Existing Subordinated
Notes Indenture, other than the Indebtedness incurred under this Agreement or
(y) $35,000,000 of "Senior Indebtedness" permitted under Section 4.03(b)(i) of
the Subordinated Notes Indenture other than the Indebtedness incurred under this
Agreement.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") occur:
(a) any representation, warranty or
certification made or deemed made by any Loan Party in any Loan Document, or any
representation, warranty, statement or information contained in any report,
certificate, financial statement or other instrument furnished in connection
with or pursuant to any Loan Document, shall be false or misleading in any
material respect when so made, deemed made or furnished by such Loan Party;
(b) failure to pay any principal of any Loan,
any Term Note, any Reimbursement Obligation or any Term Note Make-Whole Amount
when and as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or by acceleration thereof or
otherwise;
(c) failure to pay interest on any Loan, any
Term Note or any Reimbursement Obligation or to pay any Fee or any other amount
(other than an amount referred to in (b) above) due under any Loan Document,
when and as the same shall become due and payable, and such failure shall
continue unremedied for a period of three (3) Business Days;
(d) failure of any Loan Party to observe or
perform any covenant, condition or agreement contained in Sections 5.1(a) (with
respect to the Borrower or Holdings), 5.5(a), 5.8 or in Article VI;
(e) failure of any Loan Party to observe or
perform any covenant, condition or agreement contained in any Loan Document
(other than those specified in (b), (c) or (d) above) and such failure shall
continue unremedied for a period of 30 days after the earlier of (i) notice
thereof from the Administrative Agent or the Required Lenders to the Borrower or
(ii) any Responsible Officer of any Loan Party having actual knowledge thereof;
(f) failure of any Loan Party or any of its
Subsidiaries to observe or perform any term, covenant, condition or agreement
contained in any other agreement or instrument evidencing or governing the
Holdings Subordinated Notes, the Existing Subordinated Notes or any other
Indebtedness (other than any Indebtedness under any Loan Document) having an
aggregate principal or notional amount in excess of $5,000,000, if the effect of
any such failure is to cause, or to permit the holder or holders of such
Indebtedness or a trustee on its or their behalf (with or without the giving of
notice, the lapse of time or both) to cause, such Indebtedness to become due
prior to its stated maturity, or any Loan Party or any of its Subsidiaries shall
(i) fail to pay any principal in respect of any such Indebtedness at the stated
maturity thereof or (ii) fail to pay any interest with respect to the Holdings
Subordinated Notes, including any Deferred Subordinated Note Interest, when due;
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(g) an involuntary proceeding shall be commenced
or an involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of any Loan Party or any of its Subsidiaries, or
of a substantial part of the property or assets of such Loan Party or any of its
Subsidiaries, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for such Loan
Party or any of its Subsidiaries or for a substantial part of the property or
assets of such Loan Party or any of its Subsidiaries or (iii) the winding-up or
liquidation of such Loan Party or any of its Subsidiaries; and such proceeding
or petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall be entered;
(h) any Loan Party or any of its Subsidiaries
shall (i) voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or the filing of any
petition described in (g) above, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for such Loan Party or such Subsidiary or for a substantial part of the property
or assets of such Loan Party or such Subsidiary, (iv) file an answer admitting
the material allegations of a petition filed against it in any such proceeding,
(v) make a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of
money in an aggregate amount in excess of $5,000,000 (except to the extent
covered by insurance as to which the insurer has acknowledged in writing its
obligation to cover) or non-monetary judgments that would have a Material
Adverse Effect shall be rendered against any Loan Party or any of its
Subsidiaries or any combination thereof and the same shall remain undischarged
for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of the affected Loan Party or Subsidiary to
enforce any such judgment;
(j) (i) a Reportable Event or Reportable Events,
or a failure to make a required installment or other payment (within the meaning
of Section 412(n)(1)(A) of the Code), shall have occurred with respect to any
Plan or Plans, (ii) a trustee shall be appointed by a United States district
court to administer any Plan or Plans, (iii) the PBGC shall institute
proceedings (including giving notice of intent thereof) to terminate any Plan or
Plans or the Borrower or any ERISA Affiliate shall file for a distress
termination of a Plan under Section 4041(c) of ERISA, (iv) the Borrower or any
ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such Multiemployer Plan, (v) the
Borrower or any ERISA Affiliate shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in reorganization, insolvent
or is being terminated, within the meaning of Title IV of ERISA, (vi) the
Borrower or any ERISA Affiliate shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(vii) any other similar event or condition shall occur or exist with respect to
a
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Plan; and in each case in clauses (i) through (vii) above, such event or
condition, together with all other such events or conditions, if any, would
reasonably be expected to involve possible taxes, penalties or other liabilities
affecting the Borrower or any ERISA Affiliate in an aggregate amount in excess
of $10,000,000 or require payments with respect to such taxes, penalties or
other liabilities exceeding $5,000,000 in any Annual Fiscal Period;
(k) (i) any Guarantee Agreement, any other Loan Document
or any provision thereof shall for any reason cease to be, or shall be asserted
by a Loan Party not to be, a legal, valid and binding obligation of any party
thereto, (ii) any Guarantor or any Person acting for or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under the
Guarantee Agreement to which it is a party, (iii) 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 the Guarantee Agreement to which it is a
party; or (iv) any security interest purported to be created by any Security
Document shall cease to be, or shall be asserted by a Loan Party not to be, a
valid, perfected, first priority (except as otherwise expressly provided in this
Agreement or such Security Document) security interest in the securities, assets
or properties covered thereby;
(l) any taxation authority recharacterizes as equity any
of the indebtedness of the Borrower or Holdings, or their respective affiliates
or otherwise denies any interest deduction for Holdings, the Borrower or their
respective affiliates contemplated in the Prospectus, or Canadian or U.S.
withholding taxes that were not contemplated by and disclosed in the Prospectus
shall be assessed on any payments made by Holdings, the Borrower or its
affiliates in respect of the IDSs, the Holdings Subordinated Notes, the
Revolving Credit Commitments, the Term Notes or the other Loan Documents, with
the result in each case that there is a Material Adverse Effect;
(m) there shall have occurred a Change of Control;
(n) from and after the Revolving Credit Maturity Date,
the Borrower shall have failed to replace the Revolving Credit Commitments with,
or failed to maintain, a revolving credit facility with a term equal to or
beyond the remaining term of the Term Notes and in an amount equal to no less
than $50,000,000; or
(o) failure of any Loan Party or any of its Subsidiaries
to observe or perform any Service Contract where such failure could reasonably
be expected to result in a Material Adverse Effect;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments, (ii) declare the Loans and Term Notes then outstanding to be
forthwith due and payable in whole or in part, (iii) demand cash collateral
pursuant to Section 2.18(k), (iii) exercise all remedies contained in any other
Loan Document, and (iv) exercise any other remedies available at law or in
equity, whereupon the principal of the Loans and Term Notes so declared to be
due and payable, together with accrued interest thereon, Term Note Make-Whole
Amount
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and any unpaid accrued Fees and all other liabilities of the Borrower accrued
hereunder and under any other Loan Document, shall become forthwith due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Borrower and Holdings, anything
contained herein or in any other Loan Document to the contrary notwithstanding;
and in any event with respect to the Borrower described in paragraph (g) or (h)
above, the Commitments shall automatically terminate, the principal of the Loans
and Term Notes then outstanding, together with accrued interest thereon, Term
Note Make-Whole Amount, all unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder and under any other Loan Document, shall
automatically become due and payable and the Administrative Agent shall be
deemed to have made a demand for cash collateral to the full extent permitted
under Section 2.18(k), without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the Borrower, anything
contained herein or in any other Loan Document to the contrary notwithstanding.
ARTICLE VIII
THE AGENTS
SECTION 8.1 Appointment. In order to expedite the transactions
contemplated by this Agreement, (i) CIBC World Markets is hereby appointed to
act as the Lead Arranger and (ii) KeyBank is hereby appointed to act as the
Administrative Agent on behalf of the Lenders and the Fronting Bank. Each of the
Lenders and each assignee of any such Lender hereby irrevocably authorizes the
Administrative Agent to take such actions on behalf of such Lender, such
assignee or the Fronting Bank and to exercise such powers as are specifically
delegated to the Administrative Agent by the terms and provisions hereof and of
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto. The Administrative Agent is hereby expressly
authorized by the Lenders and the Fronting Bank, without hereby limiting any
implied authority, (a) to receive on behalf of the Lenders and the Fronting Bank
all payments of principal of and interest on the Loans and the Term Notes and in
respect of Reimbursement Obligations and all other amounts due to the Lenders
and the Fronting Bank hereunder, and promptly to distribute to each Lender or
the Fronting Bank its proper share of each payment so received; (b) to give
notice on behalf of each of the Lenders to the Borrower of any Event of Default
specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by a Loan Party pursuant to a Loan Document as received by
the Administrative Agent. Without limiting the generality of the foregoing, the
Administrative Agent is hereby expressly authorized, to execute any and all
documents (including releases) with respect to the Collateral and the rights of
the Lenders with respect thereto, as contemplated by and in accordance with the
provisions of this Agreement and the Security Documents.
SECTION 8.2 Nature of Duties. Neither the Administrative Agent nor any
of its directors, officers, employees or agents shall be liable as such for any
action taken or omitted by any of them except for its, his or her own gross
negligence or willful misconduct, or be responsible for any statement, warranty
or representation herein or the contents of any document
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delivered in connection herewith, or be required to ascertain or to make any
inquiry concerning the performance or observance by any Loan Party of any of the
terms, conditions, covenants or agreements contained in any Loan Document. The
Administrative Agent shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents or other instruments or agreements, except
with respect to the Administrative Agent. The Administrative Agent shall in all
cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders and, except as
otherwise specifically provided herein, such instructions and any action or
inaction pursuant thereto shall be binding on all the Lenders. The
Administrative Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Administrative Agent nor any of its directors, officers,
employees or agents shall have any responsibility to any Loan Party on account
of the failure of or delay in performance or breach by any Lender or the
Fronting Bank of any of its obligations hereunder or to any Lender or the
Fronting Bank on account of the failure of or delay in performance or breach by
any other Lender or the Fronting Bank or any Loan Party of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. The Administrative Agent may execute any and
all duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel. The Lenders
hereby acknowledge that the Administrative Agent shall not be under any duty to
take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement unless it shall be requested in writing to do so by
the Required Lenders. The Lenders further acknowledge and agree that so long as
an Administrative Agent shall make any determination to be made by it hereunder
or under any other Loan Document in good faith, such Agent shall have no
liability in respect of such determination to any Person.
SECTION 8.3 Resignation; Removal. Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by notifying the Lenders and the
Borrower and may be removed at any time with or without cause by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint a successor with the consent of the Borrower (not to be
unreasonably withheld and not required if an Event of Default has occurred and
is continuing). If no successor shall have been so appointed by the Required
Lenders and approved by the Borrower and shall have accepted such appointment
within 30 days after the retiring Administrative Agent gives notice of its
resignation or the Required Lenders give notice of their removal of the
Administrative Agent, then the outgoing Administrative Agent may, on behalf of
the Lenders with the consent of the Borrower (not to be unreasonably withheld),
appoint a successor Administrative Agent which shall be a bank with an office in
New York, New York, having a combined capital and surplus of at least
$500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the outgoing Administrative Agent and the outgoing
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any such Administrative Agent's resignation or removal
hereunder, the provisions of this Article and Section 9.5 shall continue in
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effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Administrative Agent.
SECTION 8.4 The Administrative Agent in its Individual Capacity. With
respect to the Loans made by it hereunder, the Administrative Agent in its
individual capacity as a Lender shall have the same rights and powers as any
other Lender and may exercise the same as though it were not the Administrative
Agent, and the Administrative Agent and its Affiliates may accept deposits from,
lend money to and generally engage in any kind of business with the Borrower or
any Subsidiary or other Affiliate thereof as if it were not an Administrative
Agent.
SECTION 8.6 Indemnification. Each Lender agrees (a) to reimburse the
Administrative Agent, on demand, in the amount of its pro rata share (based on
its Commitments hereunder (or if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of its
applicable outstanding Loans and Term Notes or participations in unreimbursed
Letter of Credit Disbursements, as applicable)) of any reasonable expenses
incurred for the benefit of the Lenders by the Administrative Agent, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, which shall not have been reimbursed by the Loan
Parties in accordance with this Agreement and the Loan Documents and (b) to
indemnify and hold harmless the Administrative Agent and any of its directors,
officers, employees or agents, on demand, in the amount of such pro rata share,
from and against any and all liabilities, taxes, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against it in its capacity as Agent or any of them in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Agreement or any other Loan Document, to
the extent the same shall not have been reimbursed by a Loan Party in accordance
with this Agreement and the Loan Documents, provided that no Lender shall be
liable to an Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of such Agent or any of its directors, officers, employees or agents.
SECTION 8.7 Lack of Reliance on Administrative Agent. Each Lender
acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon any Loan Document, any related agreement or
any document furnished hereunder or thereunder.
SECTION 8.8 Delivery of Notices, Reports, Etc. to Lenders. As soon as
practicable after it becomes aware of an Event of Default that has occurred and
is continuing, the Administrative Agent shall notify each Lender thereof.
Promptly upon receipt of any financial statements, certificates, reports,
notices, requests for Borrowings or any other information delivered in
connection herewith by the Loan Parties to the Administrative Agent, the
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Administrative Agent shall deliver a copy thereof to each Lender. The
Administrative Agent will notify the Lenders promptly following the issuance of
each Letter of Credit, and shall report to the Lenders the aggregate amount of
all Letters of Credit and all Swingline Loans no less frequently than monthly.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy, (a) in the
case of any Loan Party or any Agent, to their respective addresses set forth on
Schedule 9.1 hereto, and (b) if to a Lender, to it at its address (or telecopy
number) set forth in the Administrative Questionnaire delivered to the
Administrative Agent by such Lender in connection with the execution of this
Agreement or in the Assignment and Acceptance pursuant to which such Lender
shall have become a party hereto. All notices and other communications given to
any party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given on the date of receipt if delivered by hand or
overnight courier service or sent by telecopy or on the date five Business Days
after dispatch by certified or registered mail if mailed, in each case
delivered, sent or mailed (properly addressed) to such party as provided in this
Section 9.1 or in accordance with the latest unrevoked direction from such party
given in accordance with this Section 9.1.
SECTION 9.2 Survival of Agreement. All covenants, agreements,
representations and warranties made by or on behalf of a Loan Party in any Loan
Documents and in the certificates or other instruments prepared or delivered in
connection therewith shall be considered to have been relied upon by the Lenders
and the Fronting Bank and shall survive the execution and delivery to the
Lenders of the Loan Documents, the making by the Lenders of the Loans, the
purchasing by the Lenders of the Term Notes, and the issuance of the Letters of
Credit, regardless of any investigation made by the Lenders or on their behalf,
and shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan, any Term Note, any Reimbursement Obligation, any
Fee, any expenses or any other amount payable under this Agreement or any other
Loan Document is outstanding and unpaid or any Letter of Credit is outstanding
and so long as the Commitments have not been terminated. Without prejudice to
the survival of any other agreements contained herein, indemnification and
reimbursement obligations contained herein (including pursuant to Sections 2.11,
2.13, 2.17 and 9.5) shall survive the payment in full of the principal and
interest hereunder, the expiration of the Letters of Credit and the termination
of the Commitments or this Agreement.
SECTION 9.3 Binding Effect. This Agreement shall become effective when
it shall have been executed by Holdings, the Borrower, the Fronting Bank, the
Administrative Agent and each Lender and when the Administrative Agent shall
have received copies hereof which, when taken together, bear the signatures of
each of the other parties hereto, and thereafter shall be binding upon and inure
to the benefit of Holdings, the Borrower, the Fronting Bank, the Administrative
Agent and each Lender and their respective permitted successors and assigns.
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SECTION 9.4 Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of Holdings, the Borrower, the Administrative
Agent, the Fronting Bank or the Lenders that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all
or a portion of its interests, rights and obligations as a Lender under this
Agreement (including all or a portion of its Commitments, the Loans at the time
owing to it and participations in Letters of Credit held by it (it being
understood that Revolving Credit Commitments, Revolving Credit Loans, Letter of
Credit Disbursements and participations in Letters of Credit may only be
assigned in pro rata amounts) and the Term Notes held by it); provided, however,
that (i) except in the case of an assignment to another Lender or an Affiliate
of such Lender or any assignment by Prudential, Met Life or any of their
affiliates, (A) the Borrower (unless an Event of Default has occurred and is
continuing) and the Administrative Agent must each give its prior written
consent to such assignment (which consent shall not in either case be
unreasonably withheld or delayed), and (B) in the case of participations in
Letters of Credit, Letter of Credit Disbursements or Revolving Credit
Commitments, the Fronting Bank must give its prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed), (ii)
except in the case of an assignment to another Lender or an Affiliate of such
Lender or any assignment by Prudential, Met Life or any of their affiliates, the
amount of the Loans, the Term Notes or Commitments of the assigning Lender
subject to such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall be an amount not less than $2,500,000 with respect to the Revolving
Credit Commitments and $1,000,000 with respect to the Term Notes, with integral
multiples of $500,000 in excess thereof, respectively, or shall be the entire
remaining amount of such Loans, Term Notes or Commitments of such assigning
Lender, (iii) the parties to each such assignment shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, (iv) the assignee, if it shall not be
a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire and (v) the assignee is a U.S. person as defined in Section
7701(a)(30) of the Code or is entitled to receive payments under the Loan
Documents free and clear of the withholding of any United States federal income
taxes and withholding taxes. Upon acceptance and recording pursuant to paragraph
(e) of this Section 9.4, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof unless agreed otherwise by the Administrative
Agent, (i) the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (ii) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.11, 2.13, 2.17 and 9.5, as well as to any Fees accrued
for its account and not yet paid).
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(c) The Administrative Agent shall maintain at its
address referred to in subsection 9.1 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitments of, and principal amount of the
Loans, the Term Notes and Letter of Credit Disbursements (whether or not
evidenced by a Note) owing to, each Lender from time to time. The Administrative
Agent shall also record the Letter of Credit Exposure of each Lender in the
Register. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Administrative Agent, the Fronting Bank
and the Lenders shall treat each Person whose name is recorded in the Register
as the owner of Commitments, Revolving Credit Exposure and Term Notes recorded
therein for all purposes of this Agreement. An assignment of any Term Note or
any Loan whether or not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. Any
assignment or transfer of all or part of a Term Note or a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Term Note or the Note evidencing such Loan, as the
case may be, accompanied by a duly executed Assignment and Acceptance, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued by the Borrower (at its expense) to the designated Assignee and the old
Notes shall be returned by the Administrative Agent to the Borrower marked
"cancelled". The Register shall be available for inspection by the Borrower, the
Fronting Bank, any Lender and their representatives (including counsel and
accountants), at any reasonable time and from time to time upon reasonable prior
notice. Every Note surrendered for registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of transfer duly
executed, by the holder of such Note or such holder's attorney duly authorized
in writing. Any Note or Notes issued in exchange for any Note or upon transfer
thereof shall carry the rights to unpaid interest and interest to accrue which
were carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon receipt
of written notice from the holder of any Note of the loss, theft, destruction or
mutilation of such Note and, in the case of any such loss, theft or destruction,
upon receipt of such holder's unsecured indemnity agreement, or in the case of
any such mutilation upon surrender and cancellation of such Note, the Borrower
will make and deliver a new Note, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Note.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower,
the Fronting Bank and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Lenders. Notwithstanding anything to the contrary
contained herein, no assignment under Section 9.4(b) of any rights or
obligations shall be effective unless and until the Administrative Agent shall
have recorded such assignment in the Register. The Administrative Agent shall
record the name of the transferor, the name of the transferee, and the amount of
the transfer in the Register after receipt of all documents required pursuant to
this Section 9.4 and such other documents as the Administrative Agent may
reasonably request.
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(e) Each Lender may without the consent of the Borrower,
the Fronting Bank or the Administrative Agent sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitments, the Loans owing
to it, the Term Notes held by it, its Letter of Credit Exposure and the
participations in Letters of Credit held by it); provided, however, that (i)
such Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participating banks or other entities
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.11, 2.13, 2.17 and 9.5 to the same extent as if they were Lenders,
provided that no such participating bank or entity shall be entitled to receive
any greater amount pursuant to such Sections than a Lender would have been
entitled to receive in respect of the amount of the participation sold by such
Lender to such participating bank or entity had no sale occurred, and (iv) the
Borrower, the Administrative Agent, the Fronting Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower or any other
Loan Party, as the case may be, relating to its Loans, Term Notes, Letter of
Credit Exposure and participations in Letters of Credit and Fees and to approve
any amendment, modification or waiver of any provision of this Agreement or any
other Loan Document (other than amendments, modifications or waivers decreasing
any Fee payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, Term Notes or Letter of Credit Disbursements,
extending any final maturity date or increasing or extending any Commitment, in
each case in respect of an Obligation in which the relevant participating bank
or entity is participating, or releasing all or substantially all of the
Collateral or any Guarantor from its Guarantee Agreement unless all or
substantially all the Capital Stock of such Guarantor is sold in a transaction
permitted by this Agreement or as provided in Section 9.17). Each Lender will
disclose the identity of its participants to the Borrower and Administrative
Agent if requested by the Borrower or the Administrative Agent.
(f) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.4, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower or any Guarantor
furnished to such Lender by or on behalf of the Borrower or any Guarantor,
provided that, prior to any such disclosure, each such assignee or participant
or proposed assignee or participant shall execute an agreement whereby such
assignee or participant shall agree to be bound by Section 9.16.
(g) Any Lender may at any time assign all or any portion
of its rights under this Agreement to a Federal Reserve Bank and, any Lender
which is an investment fund may pledge all or any portion of its Notes or Loans
to its trustee in support of its obligations to such trustee; provided, (i) no
Lender shall, as between Borrower and such Lender, be relieved of any of its
obligations hereunder as a result of any such assignment and pledge and (ii) in
no event shall such Federal Reserve Bank or trustee be considered to be a
"Lender" or be entitled to require the assigning Lender to take or omit to take
any action hereunder. In order to facilitate such an assignment to a Federal
Reserve Bank, the Borrower shall, at the request of the assigning Lender, duly
execute and deliver to the assigning Lender a promissory note or notes
evidencing the Loans made to the Borrower by the assigning Lender hereunder.
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(h) Neither Holdings nor the Borrower shall assign or
delegate any of its rights or duties hereunder and any attempted assignment
shall be null and void.
(i) Except as provided herein, the Fronting Bank shall
not assign or delegate any of its interests, rights or obligations as a Fronting
Bank under this Agreement without the prior written consent of the Borrower and
the Administrative Agent.
SECTION 9.5 Expenses; Indemnity. (a) Each of Holdings and the Borrower
agree to pay all reasonable out-of-pocket expenses incurred by the
Administrative Agent and the Lenders in connection with the preparation of the
Loan Documents, by any Agent in connection with the syndication of the
Commitments or by any Agent or the Lenders in the administration of this
Agreement (including expenses incurred in connection with ongoing Collateral
examination, limited to expenses for no more than one examination per year if no
Event of Default has occurred and is continuing and unlimited if an Event of
Default has occurred and is continuing) or in connection with any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or incurred by the
Administrative Agent or any Lender in connection with the enforcement or
protection of their rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made or the Letters of Credit and Term
Notes issued hereunder, including the reasonable fees, charges and disbursements
of Xxxxxx Xxxx & Xxxxxx LLP, counsel for the Administrative Agent, and King &
Spalding LLP, counsel for Prudential and Met Life and, in connection with any
such enforcement or protection, the reasonable fees, charges and disbursements
of any other counsel (including the reasonable allocated costs of internal
counsel if a Lender elects to use internal counsel in lieu of outside counsel)
for the Administrative Agent, the Fronting Bank or any Lender (but no more than
one such counsel for any Lender other than Prudential and Met Life).
(b) Each of Holdings and the Borrower agree to indemnify
the Administrative Agent, the Fronting Bank, each Lender and each of their
respective directors, trustees, officers, employees, investment advisors,
affiliates and agents (each such Person being called an "Indemnitee") against,
and to hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities, taxes and related costs and expenses, including, without
limitation, reasonable counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of any Loan Document or any agreement
or instrument contemplated hereby or thereby, the performance by the parties
hereto and thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated hereby
and thereby, (ii) the use of the proceeds of the Loans or the use of any Letter
of Credit or (iii) any claim, litigation, investigation or proceeding relating
to the Transaction or any of the foregoing, whether or not any Indemnitee is a
party thereto, provided that (x) such indemnity shall not, as to any Indemnitee,
be available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee (treating, for this purpose only, the
Administrative Agent, the Fronting Bank or any Lender that is such Indemnitee
and its directors, trustees, officers and employees as a single Indemnitee) and
(y) amounts to which an Indemnitee is entitled to payment hereunder shall be
without duplication of amounts to which such Indemnitee is entitled under
Sections 2.11, 2.13 or 2.17 and shall
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exclude those amounts expressly excluded from indemnity or payment by the
Borrower in Section 2.11, 2.13 or 2.17. Subject to and without limiting the
generality of the foregoing sentence, each of Holdings and the Borrower agrees
to indemnify each Indemnitee against, and hold each Indemnitee harmless from,
any Environmental Claim, and any and all losses, claims, damages, liabilities
and related expenses, including, without limitation, reasonable counsel or
consultant fees, charges and disbursements, incurred by or asserted against any
Indemnitee (and arising out of, or in any way connected with or as a result of,
any of the events described in clause (i), (ii) or (iii) of the preceding
sentence) arising out of, in any way connected with, or as a result of any
actual or alleged presence or Release of Hazardous Materials on any of the
Properties, or any Environmental Claim related in any way to Holdings, the
Borrower or any Subsidiary, provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such Environmental Claim is, or such
losses, claims, damages, liabilities or related costs and expenses are,
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or any of its directors, trustees, officers or employees. The
provisions of this Section 9.5 shall remain operative and in full force and
effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Obligations, the invalidity or unenforceability of any term or provision of
any Loan Document, or any investigation made by or on behalf of any Agent, the
Fronting Bank or any Lender. All amounts due under this Section 9.5 shall be
payable on written demand therefor.
SECTION 9.6 Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and the Fronting Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other Indebtedness at any time owing by such
Lender or the Fronting Bank to or for the credit or the account of the Borrower
against any of and all the obligations of the Borrower now or hereafter existing
under this Agreement or any other Loan Document owed to the Lenders and Fronting
Bank, irrespective of whether or not such Lender or the Fronting Bank shall have
made any demand under this Agreement or such other Loan Document and although
such obligations may be unmatured. The rights of each Lender and Fronting Bank
under this Section 9.6 are in addition to other rights and remedies (including
other rights of setoff) which such Lender or the Fronting Bank may have, and are
subject to Section 2.15.
SECTION 9.7 APPLICABLE LAW. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
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SECTION 9.8 Waivers; Amendment. (a) No failure or delay of any Agent,
the Fronting Bank or any Lender in exercising any right or power hereunder or
under any Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Administrative Agent, the Fronting Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by Holdings, the Borrower or any Guarantor therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) below,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. No notice or demand on Holdings, the
Borrower or any Guarantor in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any other Loan Document
nor any provision hereof or thereof may be waived, amended or modified except,
in the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Required Lenders, the Borrower and Holdings, or the
applicable Loan Party, as the case may be, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such agreement shall (i) decrease the
principal amount of, or extend or shorten the final maturity of, or decrease the
rate of interest on, any Loan, any Term Note or any Reimbursement Obligation,
without the prior written consent of each Lender directly affected thereby, or
extend, waive or forgive any other payment (other than a mandatory or optional
prepayment) required hereunder without the consent of each Lender directly
affected thereby, (provided, however, that only the consent of the Required
Lenders shall be necessary (x) to waive or alter any obligation of the Borrower
to pay interest at the Default Rate or (y) to amend any financial covenant
hereunder (or any defined term used therein) even if the effect of such
amendment would be to reduce the rate of interest on any Loan, any Term Note or
any Reimbursement Obligation or to reduce any fee payable hereunder), (ii)
extend any date on which payment of interest on any Loan, any Term Note or any
Reimbursement Obligation is due without the prior written consent of each Lender
directly affected thereby, (iii) increase, decrease, extend or shorten the
Commitment of any Lender or decrease the Commitment Fees or L/C Participation
Fees or other fees of any Lender without the prior written consent of such
Lender, (iv) effect any waiver, amendment or modification that by its terms
adversely affects the rights in respect of mandatory or optional prepayments or
Collateral, without the consent of a majority in interest of the Revolving
Lenders or 66 2/3% of the Term Lenders, as the case may be, participating in the
adversely affected Facility, or change the relative rights in respect of
payments or Collateral without the consent of a majority in interest of the
Revolving Lenders or 66 2/3% of the Term Lenders, as the case may be,
participating in each affected Facility, (v) amend or modify the provisions of
Sections 2.8, 2.11, 2.13, or 2.17 without the prior written consent of each
Lender directly adversely affected thereby, (vi) amend or modify the provisions
of this Section, the definition of "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders required to amend, waive
or otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender (it being
understood that, with the consent of Required Lenders, additional extensions of
credit pursuant hereto may be included in the
110
determination of "Required Lenders" on substantially the same basis as the other
extensions of credit under this Agreement are included on the Closing Date), or
(vii) release all or substantially all the Collateral or release any Guarantor
from its Guarantee Agreement (unless all or substantially all the Capital Stock
of such Guarantor is sold in a transaction permitted by this Agreement or as
provided in Section 9.17), without the prior written consent of each Lender
adversely affected thereby; provided further that no such agreement shall amend,
modify or otherwise affect the rights or duties of the any Agent or the Fronting
Bank hereunder without the prior written consent of such Agent or the Fronting
Bank acting as such at the effective date of such agreement, as the case may be.
Each Lender shall be bound by any waiver, amendment or modification authorized
by this Section 9.8 and any consent by any Lender pursuant to this Section 9.8
shall bind any assignee of such Lender.
SECTION 9.9 Interest Rate Limitation. Notwithstanding anything herein
to the contrary, if at any time the applicable interest rate, together with all
fees and charges which are treated as interest under applicable law
(collectively the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any Lender or Fronting Bank, shall exceed the maximum
lawful rate (the "Maximum Rate") that may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable hereunder, together with all Charges payable to such Lender
or the Fronting Bank, shall be limited to the Maximum Rate, provided that such
excess amount shall be paid to such Lender or the Fronting Bank on subsequent
payment dates to the extent not exceeding the legal limitation.
SECTION 9.10 Entire Agreement. This Agreement, the other Loan Documents
and the agreements regarding certain Fees referred to herein constitute the
entire contract between the parties relative to the subject matter hereof. Any
previous agreement among or representations from the parties with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents. Nothing in this Agreement or in the other Loan Documents, expressed
or implied, is intended to confer upon any party other than the parties hereto
and thereto any rights, remedies, obligations or liabilities under or by reason
of this Agreement or the other Loan Documents.
SECTION 9.11 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12 Severability. In the event any one or more of the
provisions contained in this Agreement or in any other Loan Document should be
held invalid, illegal or
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unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein and therein shall not in any way be
affected or impaired thereby. The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 9.13 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.3.
SECTION 9.14 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15 Jurisdiction; Consent to Service of Process. (a) Each of
Holdings and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to the Loan Documents, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender or the Fronting Bank may otherwise have to bring any action or proceeding
relating to the Loan Documents against Holdings, the Borrower or any Guarantor
or their properties in the courts of any jurisdiction.
(b) Each of Holdings and the Borrower hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and effectively
do so, any objection which it may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement
or the other Loan Documents in any New York State or federal court. Each of the
parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.1. Nothing in
this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.16 Confidentiality. Each of the Lenders, the Fronting Bank
and the Administrative Agent agrees that it shall maintain in confidence any
information relating to any Loan Parties that was clearly marked or labeled or
otherwise adequately identified when received by you as being confidential
information of the Loan Parties or any of their Subsidiaries (other than
information that (a) was publicly known or becomes publicly known other than as
a result of a disclosure by such party, (b) has been independently developed by
such Lender, the Fronting Bank or the Administrative Agent without violating
this Section 9.16, (c) was or becomes
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available to such Lender, the Fronting Bank or the Administrative Agent from a
third party having, to such Person's knowledge, no obligations of
confidentiality to a Loan Party or (d) constitutes financial statements and
financial information delivered to such Lender, the Fronting Bank or the
Administrative Agent under Section 5.4 that are otherwise publicly available),
such information (the "Confidential Information") to be maintained in accordance
with procedures adopted by such Lender, the Fronting Bank or the Administrative
Agent in good faith to protect confidential information of third parties
delivered to such Lender, the Fronting Bank or the Administrative Agent, and
shall not reveal the same other than (i) to the directors, trustees, officers,
employees, agents, attorneys and advisors of such Lender, the Fronting Bank or
the Administrative Agent (so long as each such Person shall have been instructed
to keep the same confidential in accordance with this Section 9.16), (ii) any
other Lender, (iii) any lender or financial institution to which such Lender,
the Fronting Bank or the Administrative Agent sells or offers to sell all or a
portion of its Commitments, Revolving Credit Exposure or Term Notes or any
participation therein (if such Person has agreed in writing prior to its receipt
of such Confidential Information to be bound by the provisions of this Section
9.16), (iv) as contemplated by Section 9.4(f), (v) any federal or state
regulatory authority having jurisdiction over such Lender, the Fronting Bank or
the Administrative Agent, (vi) the National Association of Insurance
Commissioners or any similar organization, or any nationally recognized rating
agency that requires access to information about the investment portfolio of any
Lender or (vii) any other Person to which such delivery or disclosure may be
necessary or appropriate (w) to effect compliance with any law, rule, regulation
or order applicable to such Lender, the Fronting Bank or the Administrative
Agent, (x) in response to any subpoena or other legal process, (y) in connection
with any litigation to which such Lender, the Fronting Bank or the
Administrative Agent is a party or (z) if an Event of Default has occurred and
is continuing, to the extent such Lender, the Fronting Bank or the
Administrative Agent may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under the Loan Documents. The Borrower hereby acknowledges and
agrees that each Lender may share with any of its affiliates, and such
affiliates may share with such Lender, any information related to the Borrower
or any of its Subsidiaries (including any non-public customer information
regarding the creditworthiness of the Borrower and its Subsidiaries), provided
such Persons shall be subject to the provisions of this Section 9.16 to the same
extent as such Lender. Notwithstanding anything herein to the contrary, any
Lender, the Fronting Bank or the Administrative Agent (and any employee,
representative or other agent of such Lender, Fronting Bank or Administrative
Agent) may disclose to any and all Persons, without limitation of any kind, the
U.S. federal income tax treatment and the U.S. federal income tax structure of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure. However, no disclosure of any information
relating to such tax treatment or tax structure may be made to the extent
nondisclosure is reasonably necessary in order to comply with applicable
securities laws.
SECTION 9.17 Release of Liens and Guarantees. In the event that
Holdings, the Borrower or any Subsidiary conveys, sells, leases, assigns,
transfers or otherwise disposes of all or any portion of any assets or property
of Holdings, the Borrower or any of the Subsidiaries, or the Capital Stock of
any Subsidiary, in a transaction expressly permitted by paragraphs (c) and (d)
of Section 6.5 or paragraphs (a) through (e) of Section 6.6, Administrative
Agent shall promptly (and the Lenders hereby authorize the Administrative Agent
to) take such action and
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execute any such documents as may be reasonably requested by the Borrower and at
the Borrower's expense to release any Liens created by any Loan Document in
respect of such Capital Stock, assets or property, and, in the case of a
disposition of all or substantially all the Capital Stock or assets of any
Subsidiary Guarantor, terminate such Subsidiary Guarantor's obligations under
the Subsidiary Guarantee Agreement. In addition, Administrative Agent agree to
take such actions as are reasonably requested by the Borrower and at the
Borrower's expense to terminate the Liens and security interests created by the
Loan Documents when all the Obligations are paid in full and all Letters of
Credit and Commitments are terminated. Any representation, warranty or covenant
contained in any Loan Document relating to any such Capital Stock, assets,
property or Subsidiary shall no longer be deemed to be made once such Capital
Stock, assets or property is conveyed, sold, leased, assigned, transferred or
disposed of.
SECTION 9.18 Representations of the Term Lenders with Respect to the
Term Notes. Each Term Lender represents as follows:
(a) Such Term Lender is not acquiring the Term Notes to
be purchased by it hereunder with a view to or for sale in connection with any
distribution thereof within the meaning of the Securities Act of 1933, provided
that the disposition of its property shall at all times be and remain within its
control.
(b) At least one of the following statements is an
accurate representation as to each source of funds (a "Source") to be used by
such Term Lender to pay the purchase price of the Term Notes to be purchased by
such Term Lender hereunder:
(i) the Source is an "insurance company general
account" (as the term is defined in the United States Department of Labor's
Prohibited Transaction Exemption ("PTE") 95-60) in respect of which the reserves
and liabilities (as defined by the annual statement for life insurance companies
approved by the National Association of Insurance Commissioners (the "NAIC
Annual Statement")) for the general account contract(s) held by or on behalf of
any employee benefit plan together with the amount of the reserves and
liabilities for the general account contract(s) held by or on behalf of any
other employee benefit plans maintained by the same employer (or affiliate
thereof as defined in PTE 95-60) or by the same employee organization in the
general account do not exceed 10% of the total reserves and liabilities of the
general account (exclusive of separate account liabilities) plus surplus as set
forth in the NAIC Annual Statement filed with such Term Lender's state of
domicile; or
(ii) the Source is a separate account that is
maintained solely in connection with such Term Lender's fixed contractual
obligations under which the amounts payable, or credited, to any employee
benefit plan (or its related trust) that has any interest in such separate
account (or to any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment performance of the
separate account; or
(iii) the Source is either (a) an insurance
company pooled separate account, within the meaning of PTE 90-1 or (b) a bank
collective investment fund, within the meaning of the PTE 91-38 and, except as
disclosed by such Term Lender to the Borrower in writing pursuant to this clause
(iii), no employee benefit plan or group of plans maintained by the
114
same employer or employee organization beneficially owns more than 10% of all
assets allocated to such pooled separate account or collective investment fund;
or
(iv) the Source constitutes assets of an
"investment fund" (within the meaning of Part V of PTE 84-14 (the "QPAM
Exemption")) managed by a "qualified professional asset manager" or "QPAM"
(within the meaning of Part V of the QPAM Exemption), no employee benefit plan's
assets that are included in such investment fund, when combined with the assets
of all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of such employer or by the same employee organization and managed by
such QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the
QPAM nor a person controlling or controlled by the QPAM (applying the definition
of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more interest
in the Borrower and (a) the identity of such QPAM and (b) the names of all
employee benefit plans whose assets are included in such investment fund have
been disclosed to the Borrower in writing pursuant to this clause (iv); or
(v) the Source constitutes assets of a "plan(s)"
(within the meaning of Section IV of PTE 96-23 (the "INHAM Exemption")) managed
by an "in-house asset manager" or "INHAM" (within the meaning of Part IV of the
INHAM exemption), the conditions of Part I(a), (g) and (h) of the INHAM
Exemption are satisfied, neither the INHAM nor a person controlling or
controlled by the INHAM (applying the definition of "control" in Section IV(h)
of the INHAM Exemption) owns a 5% or more interest in the Borrower and (a) the
identity of such INHAM and (b) the name(s) of the employee benefit plan(s) whose
assets constitute the Source have been disclosed to the Borrower in writing
pursuant to this clause (v); or
(vi) the Source is a governmental plan; or
(vii) the Source is one or more employee benefit
plans, or a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Borrower in writing
pursuant to this clause (vii); or
(viii) the Source does not include assets of any
employee benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 9.18, the terms "employee benefit
plan," "governmental plan," and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
VOLUME SERVICES AMERICA, INC.
By ____________________________________
Name:
Title:
VOLUME SERVICES AMERICA HOLDINGS, INC.
By ____________________________________
Name:
Title:
CIBC WORLD MARKETS,
as Lead Arranger
By ____________________________________
Authorized Signatory
KEYBANK NATIONAL ASSOCIATION, as a
Lender and as the Administrative Agent, as
the Fronting Bank and the Swingline Lender
By ____________________________________
Name:
Title:
[ ]
As a Lender
By ____________________________________
Name:
Title:
