EXHIBIT 10.6
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AMENDED AND RESTATED CREDIT AGREEMENT
among
DOVER DOWNS GAMING & ENTERTAINMENT, INC.
and
THE BANKS PARTY HERETO
and
WILMINGTON TRUST COMPANY,
as Agent
DATED AS OF MARCH 25, 2002
$55,000,000
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 25, 2002, among
DOVER DOWNS GAMING & ENTERTAINMENT, INC. (the "Borrower"), the several banks and
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other financial institutions from time to time parties hereto (the "Banks") and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as agent (in such
capacity, the "Agent").
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BACKGROUND
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WHEREAS, Wilmington Trust Company and the Borrower have entered into a Credit
Agreement, dated as of January 15, 2002 (the "Original Credit Agreement"),
pursuant to which Wilmington Trust Company agreed to make available certain
credit facilities to the Borrower;
WHEREAS, Wilmington Trust Company and the Borrower desire to amend and restate
the Original Credit Agreement as set forth herein, and PNC Bank, Delaware
desires to become a party thereto;
NOW THEREFORE, in consideration of the mutual covenants and agreements herein
set forth and for other consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby covenant and agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms
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shall have the following meanings:
"Affiliate": as to any Person, any other Person which, directly or
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indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person and any member, director, officer
or employee of any such Person. For purposes of this definition, "control" shall
mean the power, directly or indirectly, either to (a) vote 10% or more of the
ordinary voting power for the election of directors of such Person or (b) direct
or in effect cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agreement": this Credit Agreement, as amended, supplemented or
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otherwise modified from time to time.
"Application": an application in such form as the Issuing Bank may
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specify from time to time, requesting the Bank to issue a Letter of Credit.
"Assignment and Acceptance": an assignment and acceptance entered into
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by a Bank and an assignee, and acknowledged by the Agent, substantially in the
form of Exhibit E or such other form as shall be approved by the Agent.
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"Base Rate": for any day, a rate per annum (rounded upwards, if
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necessary, to the next 1/100th of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the
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Federal Funds Effective Rate in effect on such day plus 1/2%. If for any reason
the Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective Rate
for any reason, including the inability of the Agent to obtain sufficient
quotations in accordance with the terms thereof, the Base Rate shall be
determined without regard to clause (b) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the 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.
"Base Rate Borrowing": a Borrowing comprised of Base Rate Loans.
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"Base Rate Loans": Revolving Credit Loans bearing interest at any time
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under the Base Rate Option.
"Base Rate Option": as defined in Section 2.8(a).
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"Borrowing": a Swing Line Loan made by the Swing Line Bank or group of
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Loans of a single Type made by the Banks on a single date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect.
"Business Day": a day other than a Saturday, Sunday or other day on
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which commercial banks in Wilmington, Delaware 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 the London interbank market.
"Capital Lease": at any time, a lease with respect to which the lessee
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is required to recognize the acquisition of an asset and the incurrence of a
liability in accordance with GAAP.
"Capital Lease Obligations": at any time, the amount of the obligations
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of the Borrower and its Subsidiaries under Capital Leases which would be shown
at such time as a liability on a consolidated balance sheet of the Borrower and
its consolidated Subsidiaries prepared in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
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equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants or options to purchase any of the foregoing.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
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"Commitment": as to any Bank, the obligation of such Bank to make Loans
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to and/or issue or participate in Letters of Credit issued on behalf of the
Borrower hereunder in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth on opposite such Bank's name on Schedule I
under the caption "Commitments", or in the Assignment and Acceptance pursuant to
which the Bank becomes a party to this Agreement, as
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the same may be permanently terminated, reduced and extended from time to time
pursuant to the provisions of Section 2.10 or changed by subsequent assignments
pursuant to Section 9.6(b).
"Commitment Fee": as defined in Section 2.6(a).
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"Commitment Period": the period from and including the Effective Date to
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but not including the Termination Date, or such earlier date on which the
Commitments shall terminate as provided herein.
"Commitment Percentage": as to any Bank at any time, the proportion
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(expressed as a percentage) that such Bank's Commitment bears to the Total
Commitment at such time (or, at any time after the Commitments shall have
expired or been terminated, the percentage that such Bank's Exposure bears to
the Total Exposure at such time).
"Commonly Controlled Entity": an entity, whether or not incorporated,
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which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Consolidated EBIT": for any period of four consecutive fiscal quarters,
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Consolidated Net Income for such period, plus the amount of income taxes (if
any) and interest expense deducted from earnings in determining such
Consolidated Net Income, in each case determined on a consolidated basis for the
Borrower and its Subsidiaries in accordance with GAAP; provided, that there
shall be excluded therefrom (a) any addition for non-operating gains (including,
without limitation, extraordinary or unusual gains, gains from discontinuance of
operations or gains arising from the sale of capital assets) and (b) any
subtraction for non-operating losses during such period (including, without
limitation, extraordinary or unusual losses, losses from the discontinuance of
operations or losses arising from the sale of capital assets).
"Consolidated EBITDA": for any period of four consecutive fiscal
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quarters, Consolidated EBIT for such period, plus the amount of depreciation and
amortization expense deducted from earnings in determining such Consolidated
EBIT, in each case determined on a consolidated basis for the Borrower and its
Subsidiaries in accordance with GAAP.
"Consolidated Funded Debt": at any time, without duplication, the
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aggregate of all indebtedness of the Borrower and its Subsidiaries for borrowed
money, determined on a consolidated basis in accordance with GAAP as of such
date.
"Consolidated Interest Expense": for any period of four consecutive
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fiscal quarters, the amount of cash interest expense deducted from earnings of
the Borrower and its Subsidiaries in determining Consolidated Net Income for
such period in accordance with GAAP.
"Consolidated Net Income": for any fiscal period of four consecutive
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fiscal quarters, net earnings (or loss) after income taxes (if any) for such
period determined on a consolidated basis in accordance with GAAP.
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"Consolidated Tangible Net Worth": as of any date of determination,
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(a) the aggregate amount of all assets of the Borrower and its Subsidiaries on a
consolidated basis at such date as may be properly classified as such in
accordance with GAAP, excluding such other assets as are properly classified as
intangible assets under GAAP, minus (b) the aggregate amount of all liabilities
of the Borrower and its Subsidiaries on a consolidated basis at such date,
determined in accordance with GAAP.
"Contingent Obligation": as to any Person, any guarantee of payment or
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performance by such Person of any Debt or other obligation of any other Person,
or any agreement to provide financial assurance with respect to the financial
condition, or the payment of the obligations of, such other Person (including,
without limitation, purchase or repurchase agreements, reimbursement agreements
with respect to letters of credit or acceptances, indemnity arrangements, grants
of security interests to support the obligations of another Person, keepwell
agreements and take-or-pay or through-put arrangements) which has the effect of
assuring or holding harmless any third Person against loss with respect to one
or more obligations of such third Person; provided, however, the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation of any Person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made and (b) the maximum amount for which
such contingently liable Person may be liable pursuant to the terms of the
instrument embodying such Contingent Obligation, unless such primary obligation
and the maximum amount for which such contingently liable Person may be liable
are not stated or determinable, in which case the amount of such Contingent
Obligation shall be such contingently liable Person's maximum reasonably
anticipated liability in respect thereof as determined by such Person in good
faith.
"Contractual Obligation": as to any Person, any provision of any
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security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Cross-Default Indebtedness": as defined in Section 7.1(f).
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"Debt": of any Person at any date means (without duplication):
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(a) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices);
(b) any other indebtedness which is evidenced by a note,
bond, debenture or similar instrument;
(c) all Capital Lease Obligations of such Person;
(d) all liabilities secured by any Lien on any property
owned by such Person whether or not such Person has assumed or otherwise become
liable for the payment thereof;
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(e) all obligations of such Person with respect to Interest
Hedge Agreements (calculated on a basis satisfactory to the Agent and in
accordance with accepted practice);
(f) all Contingent Obligations of such Person, including all
obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations created for the account of such Person;
(g) all obligations of such Person under "synthetic" or
similar leases; and
(h) withdrawal liabilities of such Person or any Commonly
Controlled Entity under a Plan.
The Debt of any Person shall include any Debt of any partnership in which such
person is a general partner, unless such Debt is nonrecourse to such Person.
"Default": any of the events specified in Section 7, whether or not any
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requirement for the giving of notice, the lapse of time, or both, or any other
condition precedent therein set forth, has been satisfied.
"Distribution": in respect of any corporation, (a) dividends or other
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distributions on Capital Stock of the corporation (except distributions in
common stock of such corporation); (b) the redemption or acquisition of Capital
Stock of the corporation or of warrants, rights or other options to purchase
such stock (except when solely in exchange for common stock of such
corporation); and (c) any payment on account of, or the setting apart of any
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any share of any class of Capital
Stock of such corporation or any warrants or options to purchase any such stock.
"Dollars" and "$": dollars in lawful currency of the United States of
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America.
"Effective Date": the date that all of the conditions of Section 4.1
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have been met to the satisfaction of the Agent.
"Environmental Laws": any and all applicable foreign, Federal, state,
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local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees or binding requirements of any Governmental Authority, or binding
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of the environment, as
now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
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from time to time.
"Euro-Rate Reserve Percentage": the maximum effective percentage in
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effect on such day as prescribed by the Board of Governors of the Federal
Reserve System (or any successor) for determining the reserve requirements
(including, without limitation, supplemental,
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marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency liabilities"). The Eurodollar
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Rate shall be adjusted with respect to any Eurodollar Loan that is outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Eurodollar Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
"Eurodollar Borrowing": a Borrowing comprised of Eurodollar Loans.
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"Eurodollar Loan": any Revolving Credit Loan bearing interest at any
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time under a Eurodollar Rate Option.
"Eurodollar Rate": with respect to any Eurodollar Loan for any Interest
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Period, the interest rate per annum determined by the Agent by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1%
per annum) (i) the rate of interest determined by the Agent in accordance with
its usual procedures (which determination shall be conclusive absent manifest
error) to be the average of the London interbank offered rates for U.S. Dollars
quoted by the British Bankers' Association as set forth on Dow Xxxxx Markets
Service (formerly known as Telerate) (or appropriate successor or, if British
Bankers' Association or its successor ceases to provide such quotes, a
comparable replacement determined by the Agent) display page 3750 (or such other
display page on the Dow Xxxxx Markets Service system as may replace display page
3750) two (2) Business Days prior to the first day of such Interest Period for
an amount comparable to the principal amount of such Eurodollar Loan and having
a borrowing date and a maturity comparable to such Interest Period by (ii) a
number equal to 1.00 minus the Euro-Rate Reserve Percentage. The Eurodollar Rate
may also be expressed by the following formula:
Average of London interbank offered rates quoted
Eurodollar Rate = by BBA as shown on Dow Xxxxx Markets Service display
page 3750 or appropriate successor
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1.00 - Euro-Rate Reserve Percentage
"Eurodollar Rate Option": as defined in Section 2.8(b).
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"Event of Default": any of the events specified in Section 7, provided,
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that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Exposure": as to any Bank, at any time, an amount equal to the sum of
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(a) the aggregate principal amount of all Loans made by such Bank then
outstanding, (b) such Bank's pro rata share of L/C Obligations then outstanding
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based on its Revolving Credit Commitment Percentage, and (c) the principal
amount of such Bank's pro rata share of Swing Line Loans then outstanding based
on its Revolving Credit Commitment Percentage.
"Extensions of Credit": the collective reference to Loans made and
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Letters of Credit issued under this Agreement.
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"Federal Funds Effective Rate": for any day, the weighted average of the
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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 Agent from three
Federal funds brokers of recognized standing selected by it.
"GAAP": at any time with respect to the determination of the character
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or amount of any asset or liability or item of income or expense, or any
consolidation or other accounting computation, generally accepted accounting
principles as in effect on the date of, or at the end of the period covered by,
the financial statements from which such asset, liability, item of income, or
item of expense, is derived, or, in the case of any such computation, as in
effect on the date when such computation is required to be determined; provided,
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however, that in the event of any change in GAAP which would affect the
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calculation of the Borrower's compliance with any of the covenants contained in
Section 6.1, either favorably or unfavorably, the Agent, the Banks and the
Borrower will make appropriate adjustments to such covenants.
"Governmental Authority": any nation or government, any state or other
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political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantor": Dover Downs, Inc., a Delaware corporation.
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"Guaranty Agreement": the Amended and Restated Guaranty and Suretyship
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Agreement substantially in the form of Exhibit C hereto, executed by the
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Guarantor in favor of the Agent, for the ratable benefit of the Banks.
"Insolvency": with respect to any Multiemployer Plan, the condition
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that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
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"Interest Coverage Ratio": at any date of determination, the ratio of
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Consolidated EBITDA to Consolidated Interest Expense.
"Interest Hedge Agreement": any interest rate swap agreement, interest
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rate cap agreement, interest rate collar agreement, interest rate insurance or
any other agreement with all extensions, renewals, amendments, substitutions and
replacements to and any of the foregoing, documentation of all of which shall
conform to International Swap Dealers Association, Inc. standards.
"Interest Payment Date": (a) as to any Base Rate Loan or Swing Line
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Loan, the last day of each March, June, September and December, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, and (c) as to any Eurodollar Loan having an Interest
Period longer than three months, each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period and the last day
of such Interest Period.
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"Interest Period": with respect to any Eurodollar Loan:
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(a) initially the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three, six or nine months thereafter, as selected by the
Borrower in its notice of borrowing or notice of conversion, given with respect
thereto; and
(b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three, six, nine or twelve months thereafter, as selected by the
Borrower by irrevocable notice to the Agent not less than three Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided that, the foregoing provisions relating to Interest Periods are subject
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to the following:
(i) 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, with respect to Eurodollar Loans only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
(ii) with respect to Eurodollar Loans, any Interest
Period that begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of a calendar month;
(iii) an Interest Period that otherwise would extend
beyond the Termination Date shall end on the Termination Date; and
(iv) the Borrower shall select Interest Periods so
as not to require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"ISP98": the International Standby Practices 1998 (ISP98) published by
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the Institute of International Banking Law & Practice, Inc., as the same may be
amended, supplemented or otherwise modified from time to time.
"Issuing Bank": Wilmington Trust Company, as issuer of Letters of Credit
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hereunder.
"L/C Commitment": the lower of (a) $1,000,000 and (b) the Total
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Commitment at such time.
"L/C Coverage Requirement": with respect to each Letter of Credit at any
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time, 100% of the maximum amount available to be drawn thereunder at such time
(determined without regard to whether any conditions to drawing could be met at
such time).
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"L/C Obligations": at any time, an amount equal to the sum of (a) 100%
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of the maximum amount available to be drawn under all Letters of Credit
outstanding at such time (determined without regard to whether any conditions to
drawing could be met at such time) and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to Section
2.5(e).
"L/C Participant": in respect of each Letter of Credit, each Bank (other
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than the Issuing Bank) in its capacity as the holder of a participating interest
in such Letter of Credit.
"L/C Payment Date": the last day of each March, June, September and
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December.
"Letters of Credit": as defined in Section 2.5(a).
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"Leverage Ratio": at any date of determination, the ratio of
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Consolidated Funded Debt on such date to Consolidated EBITDA for the four
consecutive fiscal quarters of the Borrower most recently ended prior to such
date.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
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arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"Loans": the collective reference to the Revolving Credit Loans and the
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Swing Line Loans.
"Loan Documents": this Agreement, the Applications, the Notes and the
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Guaranty Agreement.
"Material Adverse Effect": a material adverse effect on (a) the validity
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or enforceability of this Agreement or any other Loan Document or the rights or
remedies of the Agent or the Banks hereunder or thereunder, (b) the business,
property, assets, financial condition, credit position, results of operations or
prospects of the Borrower and its Subsidiaries taken as a whole or (c) the
ability of the Borrower to duly and punctually pay its Debts and perform its
obligations under the Loan Documents.
"Materials of Environmental Concern": any gasoline or petroleum
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(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls, and ureaformaldehyde insulation.
"Xxxxx'x": Xxxxx'x Investors Services, Inc.
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"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
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Section 4001(a)(3) of ERISA.
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"Net Proceeds": with respect to the sale or issuance of any Capital
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Stock by the Borrower or its Subsidiary, the net amount equal to (a) the
aggregate amount received in cash in connection with such sale or issuance minus
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(b) the fees, commissions and other out-of-pocket expenses incurred by the
Borrower or its Subsidiary in connection with such sale or issuance.
"Note": the Revolving Credit Notes and the Swing Line Note.
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"Participant" as defined in Section 9.6(b).
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"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
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Subtitle A of Title IV of ERISA.
"Permitted Acquisition": an acquisition by the Borrower of the Capital
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Stock or assets of a Person (or of any segment or division of a Person) (a) that
is in the gaming industry, if the gross purchase price for such acquisition is
less than $35,000,000, (b) that is in an industry other than gaming, if the
gross purchase price for such acquisition is less than $10,000,000 or (c) which
is otherwise approved by the Required Bank; provided, that at the time that any
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definitive agreement is entered into in respect of any such acquisition, no
Default or Event of Default shall exist or would exist if such acquisition were
consummated on such date (assuming for purposes of the covenants contained in
Section 6.1 that pro forma adjustments are made to the financial statements of
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the Borrower giving effect to such acquisition as if it had occurred on the last
day of the Borrower's most recently completed fiscal quarter); provided further,
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that the prior approval of the Bank shall be required for any acquisition
proposed to be made by the Borrower during a fiscal year in which (i) the
aggregate gross purchase price of Permitted Acquisitions previously made by the
Borrower during such fiscal year equals or exceeds $35,000,000 or (ii) the
portion of the aggregate gross purchase price of Permitted Acquisition
previously made by Borrower during such fiscal year financed with Loans exceeds
$25,000,000.
"Permitted Investments":
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(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, provided that such obligations mature within one (1) year
from the date of acquisition thereof;
(b) certificates of deposit, time deposits or banker's
acceptances, maturing within one (1) year from the date of acquisition, with (i)
any Bank or (ii) any other bank or trust company organized under the laws of the
United States, the unsecured long-term debt obligations of which are rated "A3"
or higher by Xxxxx'x or "A-" or higher by S&P, and issued, or in the case of
banker's acceptance, accepted, by a bank or trust company having capital,
surplus and undivided profits aggregating at least Two Hundred Fifty Million
Dollars ($250,000,000);
(c) commercial paper given the highest rating by either
S&P or Moody's maturing not more than two hundred seventy (270) days from the
date of creation thereof;
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(d) mutual funds registered with the Securities and
Exchange Commission under the Investment Company Act of 1940 that hold
themselves out as "money market funds;"
(e) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition, having one of the two highest ratings generally obtainable from
either S&P or Moody's;
(f) commercial paper maturing no more than six months
from the date of acquisition thereof and issued by the holding company of (i)
any Bank or (ii) any other bank that has (A) combined capital, surplus and
undivided profits (less any undivided losses) of not less than $250 million, (B)
a Xxxxx Bank Watch Rating of C or better and (C) commercial paper having a
rating of A-2 (or the equivalent) or higher from S&P or P-2 (or the equivalent)
or higher from Moody's; and
(g) fully collateralized repurchase agreements with a term
of not more than ninety days for underlying securities of the type described in
paragraphs (a) and (e) of this definition.
"Permitted Liens" shall mean:
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(a) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(b) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;
(c) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(d) Good faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(e) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
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(f) Purchase Money Security Interests or Liens created
pursuant to Capital Leases; provided, that (x) such Liens shall be created
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simultaneously with the acquisition of the property which is subject to such
Lien, (y) such Liens do not at any time encumber any property other than such
property and (z) the Liens are not modified to secure any Debt other than that
used to acquire such property;
(g) the following, if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed:
(i) claims or Liens for taxes, assessments or
charges due and payable and subject to interest or penalty, provided that the
Borrower establishes and maintains such reserves or other appropriate provisions
as shall be required by GAAP and pays all such taxes, assessments or charges
forthwith upon the commencement of proceedings to foreclose any such Lien; and
(ii) claims or Liens of mechanics, materialmen,
warehousemen, carriers, or other statutory nonconsensual Liens; and
(h) Liens relating to judgments which do not constitute an
Event of Default under Section 7.1(e).
"Person": an individual, partnership, corporation, business trust, joint
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stock company, limited liability company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is covered
----
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity is
(or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate": the rate of interest per annum announced from time to time
----------
by the Agent as its "National Commercial Rate" in effect at its principal office
in Wilmington, Delaware, each change in the Prime Rate shall be effective on the
date such change is announced as effective. The Agent's "National Commercial
Rate" is used by the Agent as a reference rate with respect to different
interest rates charged to borrowers. The Agent's determination and designation
from time to time of the reference rate shall not in any way preclude the Agent
from making loans to other borrowers at a rate that is higher or lower than or
different from the reference rate.
"Properties": the collective reference to the facilities and properties
----------
owned, leased or operated by the Borrower or any of its Subsidiaries.
"Purchase Money Security Interest": shall mean Liens upon tangible
--------------------------------
personal property securing loans to the Borrower or any Subsidiary thereof or
deferred payments by the Borrower or any Subsidiary thereof for the purchase of
such tangible personal property.
-12-
"Register": as defined in Section 9.6(d).
--------
"Regulation U": Regulation U of the Board of Governors of the Federal
------------
Reserve System as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board of Governors of the Federal
------------
Reserve System as from time to time in effect, and all official rulings and
interpretations thereunder or thereof.
"Reimbursement Obligation": in respect of each Letter of Credit, the
------------------------
obligation of the Borrower to reimburse the Issuing Bank for all drawings made
thereunder in accordance with Section 2.5(e) and the Application related to such
Letter of Credit for amounts drawn under such Letter of Credit.
"Reorganization": with respect to any Multiemployer Plan, the condition
--------------
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Sections 4043(c)(1),
----------------
(2), (4), (5), (6), (10) and (13) of ERISA.
"Required Banks": shall mean all of the Banks.
----------------
"Requirement of Law": as to any Person, the certificate of
------------------
incorporation, by-laws, operating agreement or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental Authority, in
each case binding upon such Person or any of its property or to which such
Person or any of its property is subject.
"Responsible Officer": the chief executive officer, president or chief
-------------------
financial officer of the Borrower.
"Revolving Credit Borrowing": a Borrowing consisting of concurrent
--------------------------
Revolving Credit Loans from the Banks.
"Revolving Credit Borrowing Request": a request by the Borrower for the
----------------------------------
making of Revolving Credit Loans pursuant to Section 2.2 in the form of
Exhibit A-1 hereto.
-----------
"Revolving Credit Commitment Percentage": as to any Bank at any time,
--------------------------------------
the proportion (expressed as a percentage) that such Bank's Commitment bears to
the Total Commitment at such time (or, at any time after the Commitments shall
have expired or been terminated, the percentage which the principal amount of
such Bank's Revolving Credit Loans then outstanding bears to the aggregate
principal amount of all Revolving Credit Loans then outstanding).
"Revolving Credit Loans": as defined in Section 2.1. Each Revolving
----------------------
Credit Loan shall be a Eurodollar Loan or a Base Rate Loan.
-13-
"Revolving Credit Note": a promissory note of the Borrower in the form
---------------------
of Exhibit B-1, as the same may be amended, supplemented or otherwise modified
-----------
from time to time
"S&P": Standard & Poor's Rating Group, a division of XxXxxx-Xxxx
---
Corporation.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
--------------------
but which is not a Multiemployer Plan.
"Subsidiary": as to any Person, (i) any corporation, company or trust of
----------
which 50% or more (by number of shares or number of votes) of the outstanding
Capital Stock, interests, shares or similar items of beneficial interest
normally entitled to vote for the election of one or more directors, members or
trustees (regardless of any contingency which does or may suspend or dilute the
voting rights) is at such time owned directly or indirectly by such person or
one or more of such Person's Subsidiaries, or any partnership of which such
Person is a general partner or of which 50% or more of the partnership interests
is at the time directly or indirectly owned by such Person or one or more of
such Person's Subsidiaries, and (ii) any corporation, company, trust,
partnership or other entity which is controlled or capable of being controlled
by such Person or one or more of such Person's subsidiaries. Unless otherwise
indicated, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary of the Borrower.
"Swing Line Bank": Wilmington Trust Company, or any other Bank to which
---------------
the Swing Line Commitment is assigned pursuant to the terms of Section 9.6.
"Swing Line Commitment": the amount set forth opposite the Swing Line
---------------------
Bank's name under the heading "Swing Line Commitment" on Schedule I hereto, as
----------
such amount may be reduced pursuant to Section 2.3(f).
"Swing Line Loans": has the meaning given to such term in Section
----------------
2.3(a).
"Swing Line Note": has the meaning given to such term in Section 2.3(c),
---------------
as the same may be amended, supplemented or otherwise modified from time to
time.
"Swing Line Repayment Date": has the meaning given to such term in
-------------------------
Section 2.3(b).
"Taxes": as defined in Section 2.14.
-----
"Termination Date": the earlier of (a) December 31, 2004, or such later
----------------
date to which the Termination Date shall have been extended pursuant to Section
2.10(d) and (b) the date the Commitments are terminated as provided herein.
"Total Commitment": at any time, the aggregate amount of the Banks'
----------------
Commitments, as in effect at such time.
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"Total Commitment Percentage": as to any Bank at any time, the
---------------------------
proportion (expressed as a percentage) that such Bank's Commitment bears to the
Total Commitment.
"Total Exposure": at any time, the aggregate amount of the Banks'
--------------
Exposures at such time.
"Tranche": the collective reference to (a) Loans, other than Base Rate
-------
Loans, of the same type whose Interest Periods begin on the same date and end on
the same later date (whether or not such Loans originally were made on the same
date) and (b) Base Rate Loans, which shall constitute one Tranche.
"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, "Rate" shall include the
Eurodollar Rate and the Base Rate.
1.2 Other Definitional Provisions
(a) Unless otherwise specified therein, all terms defined
in this Agreement shall have the defined meanings when used in the Notes or any
certificate or other document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) As used herein and in the Notes, and any certificate
or other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower and its Subsidiaries not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
(d) The meanings given to terms defined in this Agreement
shall be equally applicable to both the singular and plural forms of such terms.
SECTION 2. THE CREDITS
2.1 Revolving Credit Loans
----------------------
(a) Subject to the terms and conditions hereof, each Bank,
severally and not jointly, agrees to make revolving credit loans in Dollars (the
"Revolving Credit Loans") to the Borrower from time to time during the
----------------------
Commitment Period, in an aggregate principal amount at any time outstanding
which, when added to such Bank's Commitment Percentage of (i) the L/C
Obligations and (ii) the principal amount of Swing Line Loans then outstanding,
does not exceed such Bank's Commitment; provided, that at no time shall the sum
--------
of (x) the aggregate principal amount of all Loans made by the Banks then
outstanding plus (y) the L/C Obligations then outstanding exceed the Total
Commitment. The Commitments may be terminated or
-15-
reduced from time to time pursuant to Section 2.10. Within the foregoing limits,
the Borrower may during the Commitment Period borrow, repay and reborrow under
the Commitment, subject to the terms, provisions and limitations set forth
herein.
(b) The Revolving Credit Loans may from time to time be
(i) Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Agent in accordance with Sections
2.2 and 2.18; provided, that no Loan shall be made as a Eurodollar Loan after
--------
the date that is one month prior to the Termination Date.
(c) The failure of any Bank to make any Revolving Credit
Loan shall not in itself relieve any other Bank of its obligation to lend
hereunder (it being understood, however, that no Bank shall be responsible for
the failure of any other Bank to make any Loan required to be made by such other
Bank). The Loans comprising any Revolving Credit Borrowing shall be (i) with
respect to a Base Rate Borrowing, in a minimum aggregate principal amount of
$100,000 or a whole multiple thereof or (ii) with respect to a Eurodollar
Borrowing, in a minimum aggregate principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof (or, in either case, an aggregate
principal amount equal to the remaining balance of the available Commitments).
2.2 Revolving Credit Loan Procedures. In order to request a
--------------------------------
Revolving Credit Borrowing, the Borrower shall hand deliver or telecopy (or
notify by telephone and promptly confirm by hand delivery or telecopy) to the
Agent the information requested by the form of Revolving Credit Borrowing
Request attached as Exhibit A-1 hereto (a) in the case of a Eurodollar
-----------
Borrowing, not later than 12:00 noon, Wilmington time, three Business Days
before a proposed Borrowing and (b) in the case of a Base Rate Borrowing, not
later than 12:00 noon, Wilmington time, on the day of a proposed Borrowing.
Such notice shall be irrevocable and shall in each case specify (i) whether the
Borrowing then being requested is to be a Eurodollar Borrowing or a Base Rate
Borrowing; (ii) the date of such Revolving Credit Borrowing (which shall be a
Business Day); (iii) the principal amount of such Borrowing; and (iv) if such
Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto. 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 a Base Rate 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 Agent
shall promptly advise the Banks of any notice given pursuant to this Section 2.2
and of each Bank's portion of the requested Borrowing.
2.3 Swing Line Loans.
-----------------
(a) Subject to the terms and conditions hereof, the Swing
Line Bank may in its discretion make swing line loans (the "Swing Line Loans")
----------------
to the Borrower from time to time during the Commitment Period in the aggregate
up to the amount of the Swing Line Commitment for periods requested by the
Borrower and agreed to by the Swing Line Bank; provided, that, no Swing Line
-------- ----
Loan shall be made if, after giving effect to the making of such Loan and the
simultaneous application of the proceeds thereof, the Total Exposure would
exceed
-16-
the Total Commitment. Within the foregoing limits, the Borrower may during the
Commitment Period borrow, repay and reborrow under the Swing Line Commitment,
subject to and in accordance with the terms and limitations hereof.
(b) The Borrower may request a Swing Line Loan to be made
on any Business Day. Swing Line Loans shall bear interest at the Base Rate
Option. Each request for a Swing Line Loan shall be in writing (or by telephone
promptly confirmed in writing) and delivered to the Swing Line Bank not later
than 12:00 noon, Wilmington time, on the Business Day such Swing Line Loan is
to be made, specifying in each case (i) the amount to be borrowed, (ii) the
requested borrowing date, and (iii) the date such Swing Line Loan is to be
repaid, if applicable (the "Swing Line Repayment Date"). The form attached as
-------------------------
Exhibit A-2 may be used. The request for such Swing Line Loan shall be
-----------
irrevocable. Provided that all applicable conditions precedent contained in
Section 4.2 hereof have been satisfied, the Swing Line Bank shall, not later
than 4:00 p.m., Wilmington time, on the date specified in the Borrower's
request for such Swing Line Loan, make such Swing Line Loan by crediting the
Borrower's deposit account with the Swing Line Bank.
(c) The obligation of the Borrower to repay the Swing Line
Loans shall be evidenced by a promissory note of the Borrower dated the date
hereof, payable to the order of the Swing Line Bank in the principal amount of
the Swing Line Commitment and substantially in the form of Exhibit B-2 (as
-----------
amended, supplemented or otherwise modified from time to time, the "Swing Line
----------
Note").
----
(d) Interest shall accrue on the outstanding principal
balance of a Swing Line Loan at the Base Rate Option and shall be payable on
each applicable Interest Payment Date and upon the repayment of such Swing Line
Loan.
(e) A Swing Line Loan shall be repaid on the earlier of
(i) the Termination Date and (ii) the Swing Line Repayment Date for such Swing
Line Loan, if any.
(f) In the event the Commitments are terminated in
accordance with Section 2.10 hereof, the Swing Line Commitment shall also be
terminated automatically. In the event the Borrower reduces the Total Commitment
to less than the Swing Line Commitment, the Swing Line Commitment shall
immediately be reduced to an amount equal to the Total Commitment. In the event
the Borrower reduces the Total Commitment to less than the outstanding principal
amount of the Swing Line Loans, the Borrower shall immediately repay the amount
by which the outstanding Swing Line Loans exceed the Swing Line Commitment as so
reduced plus accrued interest thereon.
(g) At no time shall there be more than one outstanding
Swing Line Loan.
(h) Each Swing Line Loan shall be in an original principal
amount of $100,000 or a whole multiple thereof.
(i) The Borrower shall have the right at any time and from
time to time to prepay any Swing Line Loan, in whole or in part, without premium
or penalty, upon prior
-17-
written, telecopy or telephonic notice to the Swing Line Bank given no later
than 1:00 p.m., Wilmington time, on the date of any proposed prepayment. Each
notice of prepayment shall specify the Swing Line Loan to be prepaid and the
amount to be prepaid, shall be irrevocable and shall commit the Borrower to
prepay such amount on such date, with accrued interest thereon.
2.4 General Provisions Regarding Loans.
----------------------------------
(a) Subject to Section 2.4(b), each Bank shall make each
Revolving Credit Loan to be made by it hereunder on the proposed date thereof
by wire transfer of immediately available funds to the Agent in Wilmington,
Delaware not later than 3:00 p.m., Wilmington time, and the Agent shall by 4:00
p.m., Wilmington time, credit the amounts so received to the general deposit
account of the Borrower with the Agent or, if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Banks. Revolving Credit
Loans shall be made by the Banks pro rata in accordance with Section 2.16.
Unless the Agent shall have received notice from a Bank prior to the date of
any Borrowing that such Bank will not make available to the Agent such Bank's
portion of such Borrowing, the Agent may assume that such Bank has made such
portion available to the Agent on the date of such Borrowing in accordance with
this paragraph (a) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Bank shall not have made such portion available to the Agent,
such Bank and the Borrower severally agree to repay to the 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 Agent at (i) in the case of the Borrower, the interest
rate applicable at the time to the Loans comprising such Borrowing and (ii) in
the case of such Bank, the Federal Funds Effective Rate; provided, that if such
--------
Bank shall not pay such amount within three Business Days of the date of such
Borrowing, such overdue amount shall, at the expiration of such three-Business
Day period, bear interest at the Base Rate Option. If such Bank repays to the
Agent such corresponding amount, such amount shall constitute such Bank's Loan
as part of such Borrowing for purposes of this Agreement.
(b) The Borrower may refinance all or any part of any
Borrowing with any other Borrowing subject to the conditions and limitations
set forth herein and elsewhere in this Agreement. Any Borrowing or part thereof
so refinanced shall be deemed to be repaid in accordance with Section 2.3 or
2.7 with the proceeds of a new Borrowing hereunder and the proceeds of the new
Borrowing, to the extent they do not exceed the principal amount of the
Borrowing being refinanced, shall not be paid by the Banks to the Agent or by
the Agent to the Borrower; provided, however, that (i) if the principal amount
-------- -------
extended by a Bank in a refinancing is greater than the principal amount that
was extended by such Bank in the Borrowing being refinanced, then such Bank
shall pay such difference to the Agent for distribution to the Banks described
in (ii) below, (ii) if the principal amount extended by a Bank in the Borrowing
being refinanced is greater than the principal amount agreed to be extended by
such Bank in the refinancing, the Agent shall return the difference to such
Bank out of amounts received pursuant to (i) above, and (iii) to the extent any
Bank fails to pay the Agent amounts due from it pursuant to (i) above, any Loan
or portion thereof being refinanced with such
-18-
amounts shall not be deemed repaid in accordance with Section 2.3 or 2.7 and
shall be payable by the Borrower without prejudice to the Borrower's rights
against any such Bank.
(c) Each Bank may at its option fulfill its Commitment
hereunder with respect to any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Bank to make such Loan; provided, however,
-------- -------
that any exercise of such option shall not affect the obligation of the
Borrower to repay such Loan in accordance with the terms of the Agreement and
the applicable Note.
(d) All Borrowings, conversions and continuations of
Revolving Credit Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections that,
after giving effect thereto, (A) the aggregate principal amount of the Loans
comprising each Tranche of Eurodollar Loans shall be equal to $500,000 or a
whole multiple of $100,000 in excess thereof and (B) the Borrower shall not have
outstanding at any one time more than in the aggregate eight (8) separate
Tranches of Loans (including the Base Rate Tranche).
(e) Notwithstanding any other provision of this
Agreement, the Borrower shall not be entitled to request any Borrowing if the
Interest Period requested with respect thereto would end after the Termination
Date.
2.5 Letters of Credit.
-----------------
(a) L/C Commitment.
--------------
(i) Subject to the terms and conditions hereof, the
Issuing Bank, in reliance upon the agreements of the other Banks set forth in
Section 2.5(d), agrees to issue letters of credit (collectively referred to as
the "Letters of Credit") for the account of the Borrower on any Business Day
-----------------
during the Commitment Period in such form as may be approved from time to time
by the Issuing Bank; provided, that no Letter of Credit shall be issued if,
--------
after giving effect thereto (A) the amount of the Total Exposure would exceed
the amount of the Total Commitment in effect at such time or (B) the aggregate
amount of the L/C Obligations at such time would exceed the L/C Commitment in
effect at such time.
(ii) Each Letter of Credit:
(A) shall be denominated in Dollars and shall
be a standby letter of credit; and
(B) shall be for the account of the Borrower
and for the benefit of the Borrower and/or the Guarantor;
(C) shall have an expiration date no later
than the Termination Date; and
(D) may during the Commitment Period be
extended at the sole discretion of the Issuing Bank for additional periods of
up to one year each (but in no
-19-
event to expire later than the Termination Date) upon written request from the
Borrower to the Issuing Bank at least 20 days (or such other time period as
agreed by the Borrower and the Agent) before the date upon which notice of
extension is otherwise required by the terms thereof.
(iii) Each Letter of Credit shall be subject to ISP98
and, to the extent not inconsistent therewith, the laws of the State of
Delaware.
(b) Procedure for Issuance of Letters of Credit. The
-------------------------------------------
Borrower may from time to time request that the Issuing Bank issue a Letter of
Credit by delivering to the Issuing Bank at its office for notices specified
herein an Application therefore, completed to the satisfaction of the Issuing
Bank, and such other certificates, documents and other papers and information as
the Issuing Bank may reasonably request. Upon receipt by the Issuing Bank of any
Application, the Issuing Bank will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
after determining from the Agent that issuance of the Letter of Credit requested
thereby will be within the limits imposed by Section 2.5(a)(i), issue such
Letter of Credit not later than ten (10) Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto (but in no event shall the Issuing Bank be
required to issue any Letter of Credit earlier than five (5) Business Days after
its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed by the Issuing Bank and the Borrower. The Issuing Bank shall promptly
after issuing a Letter of Credit furnish copies thereof to the Borrower.
(c) L/C Fees, Commissions and Other Charges.
---------------------------------------
(i) The Borrower shall pay to the Agent, for the
account of the Banks (including the Issuing Bank) pro rata according to their
--- ----
respective Commitment Percentages, a letter of credit fee with respect to the
aggregate face amount of all Letters of Credit outstanding, computed at the rate
of three quarters of one percent (.75%) (computed on the basis of the actual
number of days each Letter of Credit is outstanding in a year of 360 days). The
Borrower shall also pay to the Issuing Bank, in respect of each Letter of Credit
issued by the Issuing Bank, a fronting fee in an amount not to exceed $300. The
fees described in the preceding sentences shall be due and payable quarterly in
arrears on each L/C Payment Date and on the Termination Date or such earlier
date as the Commitments are terminated, and shall be nonrefundable.
(ii) In addition to the foregoing fees, the Borrower
shall pay or reimburse the Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by the Issuing Bank in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit, in
accordance with the schedule of such costs attached hereto as Schedule II.
-----------
-20-
(iii) The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Bank and the Banks all fees and commissions
received by the Agent for their respective accounts pursuant to this subsection.
(d) L/C Participations.
------------------
(i) The Issuing Bank irrevocably agrees to grant
and hereby grants to each L/C Participant, and, to induce the Issuing Bank to
issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Bank, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk, an undivided interest equal to such L/C Participant's
Revolving Credit Commitment Percentage in the Issuing Bank's obligations and
rights under each Letter of Credit issued by the Issuing Bank hereunder and the
amount of each draft paid by the Issuing Bank thereunder. Each L/C Participant
unconditionally and irrevocably agrees with the Issuing Bank that, if a draft
is paid under any Letter of Credit issued by the Issuing Bank for which the
Issuing Bank is not reimbursed in full by the Borrower in accordance with the
terms of this Agreement, such L/C Participant shall pay to the Issuing Bank
upon demand at the Issuing Bank's address for notices specified herein an
amount equal to such L/C Participant's Revolving Credit Commitment Percentage
of the amount of such draft or any part thereof, which is not so reimbursed.
Any action taken or omitted by the Issuing Bank under or in connection with a
Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall neither create for the Issuing Bank any resulting
liability to any L/C Participant nor constitute a defense to an L/C
Participant's obligation to make the payments to the Issuing Bank required by
the immediately preceding sentence.
(ii) If any amount required to be paid by any L/C
Participant to the Issuing Bank pursuant to Section 2.5(d) in respect of any
unreimbursed portion of any payment made by the Issuing Bank under any Letter
of Credit is not paid to the Issuing Bank on the date such payment is due from
such L/C Participant, such L/C Participant shall pay to the Issuing Bank on
demand an amount equal to the product of (A) such amount, times (B) the daily
average Federal Funds Effective Rate, as quoted by the Issuing Bank, during the
period from and including the date such payment is required to the date on
which such payment is immediately available to the Issuing Bank, times (C) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. A certificate of the Issuing Bank
submitted to any L/C Participant with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(iii) Whenever, at any time after the Issuing Bank
has made payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with Section
--- ----
2.5(d)(i), the Issuing Bank receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including by way of
set-off or proceeds of collateral applied thereto by the Issuing Bank), or any
payment of interest on account thereof, the Issuing Bank will distribute to
such L/C Participant its pro rata share thereof; provided, however, that in the
--- ---- -------- -------
event that any such payment received by the Issuing Bank shall be required to
be returned by the Issuing Bank, such L/C Participant shall return to the
Issuing Bank the portion thereof previously distributed by the Issuing Bank to
it.
-21-
(e) Reimbursement Obligation of the Borrower.
----------------------------------------
(i) The Borrower agrees to reimburse the Issuing
Bank in respect of a Letter of Credit on each date on which the Issuing Bank
notifies the Borrower of the date and amount of a draft presented under such
Letter of Credit and paid or to be paid by the Issuing Bank for the amount of
(A) such draft so paid and (B) any taxes, fees, charges or other direct out of
pocket costs or expenses incurred by the Bank in connection with such payment.
Each such payment shall be made to the Issuing Bank at its office listed in
Section 9.2 in Dollars and in immediately available funds.
(ii) Interest shall be payable on any and all
amounts remaining unpaid by the Borrower under this subsection from the date
such amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the per annum rate of the Base Rate Option
plus 2.0% and shall be payable on demand by the Bank.
(f) Obligations Absolute.
--------------------
(i) The obligations of the Borrower under this
Section 2.5 shall be absolute and unconditional under any and all circumstances
and irrespective of any set-off, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Bank or any beneficiary of a
Letter of Credit or any other Person.
(ii) The Borrower agrees with the Issuing Bank that
the Issuing Bank shall not be responsible for, and the Borrower's Reimbursement
Obligations under Section 2.5(e) shall not be affected by, among other things,
(A) the validity or genuineness of any documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, provided, that reliance upon such documents by the
--------
Issuing Bank shall not have constituted gross negligence or willful misconduct
by the Issuing Bank or (B) any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other Person to which such Letter of
Credit may be transferred or (C) any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee.
(iii) The Issuing Bank shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Bank's gross
negligence or willful misconduct.
(iv) The Borrower agrees that any action taken or
omitted by the Issuing Bank under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct, shall be binding on the Borrower and shall neither result
in any liability of the Issuing Bank to the Borrower nor constitute a defense
to the Borrower's obligation to reimburse the Issuing Bank.
(g) Letter of Credit Payments. If any draft shall be
-------------------------
presented for payment to the Issuing Bank under any Letter of Credit, the
Issuing Bank shall promptly notify the Borrower of the date and amount thereof.
The responsibility of the Issuing Bank to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in
-22-
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
in conformity with such Letter of Credit.
(h) Application. To the extent that any provision of any
-----------
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.
2.6 Fees.
-----
(a) The Borrower agrees to pay to the Agent for the
account of the Banks a commitment fee (a "Commitment Fee") for the period from
--------------
and including the first day of the Commitment Period to the Termination Date,
computed at a rate per annum equal to 1/4%, calculated on the basis of a 360
day year for the actual days elapsed, on the average daily amount of the
difference between the Commitment of such Bank and its Exposure during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Termination Date or such
earlier date as the Total Commitment shall be permanently reduced or terminated
as provided herein, commencing on the first of such dates to occur after the
Effective Date. Each payment by the Borrower on account of the Commitment Fee
shall be made pro rata according to the Banks' respective Revolving Credit
--- ----
Commitment Percentages.
(b) The Borrower agrees to pay to the Agent for the
account of each Bank pro rata in accordance with Section 2.16 a closing fee in
--- ----
the amount of $137,500, payable on the Effective Date.
(c) All fees shall be paid on the dates due, in
immediately available funds, to the Agent for distribution, if and as
appropriate, among the Banks. Once paid, none of the fees shall be refundable
under any circumstances.
2.7 Notes; Repayment of Revolving Credit Loans. The Revolving
------------------------------------------
Credit Loans made by each Bank shall be evidenced by a single Revolving Credit
Note duly executed on behalf of the Borrower, dated the Effective Date, in
substantially the form attached hereto as Exhibit B-1 with the blanks
-----------
appropriately filled, payable to such Bank in a principal amount equal to the
Commitment of such Bank. Each Note shall bear interest from the date thereof on
the outstanding principal balance thereof as set forth in Section 2.8. The
outstanding principal balance of each Revolving Credit Loan, as evidenced by
the relevant Note, shall be payable on the Termination Date. The Borrower
hereby authorizes the Agent to charge any deposit account of the Borrower
maintained with the Agent for any payment when due hereunder or under the Notes.
2.8 Interest on Revolving Credit Loans.
----------------------------------
(a) Subject to the provisions of Section 2.9, each Base
Rate Loan 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) at a rate per
annum equal to the Base Rate minus 1% (the "Base Rate Option").
----- ----------------
-23-
(b) Subject to the provisions of Section 2.9, each
Eurodollar Loan shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to the
Eurodollar Rate for the Interest Period in effect for such Loan plus 0.75% (the
----
"Eurodollar Rate Option").
----------------------
(c) Interest on each Revolving Credit Loan shall be
payable on each Interest Payment Date applicable to such Loan; provided, that
--------
interest accruing on overdue amounts pursuant to Section 2.9 shall be payable
on demand. The Agent's calculation of the Eurodollar Rate and the Base Rate
shall be conclusive absent manifest error.
2.9 Default Rate; Inability to Determine Interest Rate.
--------------------------------------------------
(a) Upon the occurrence of and during the continuance of
an Event of Default under Section 7.1(a) or (g), the outstanding principal
amount of the Loans and, to the extent permitted by law, accrued and unpaid
interest thereon and any other amount payable hereunder shall bear interest
from the date of such occurrence until paid in full (after as well as before
judgment) at a rate per annum which is equal to two percent (2%) in excess of
the Base Rate Option. Upon the occurrence of and during the continuance of an
Event of Default other than under Section 7.1(a) or (g), the outstanding
principal amount of the Loans and, to the extent permitted by law, accrued and
unpaid interest thereon and any other amount payable hereunder shall bear
interest from the date that the Agent shall send notice to the Borrower of the
application of the default rate until paid in full (after as well as before
judgment) at a rate per annum which is equal to two percent (2%) in excess of
the Base Rate Option. The Borrower acknowledges that such increased interest
rate reflects, among other things, the fact that such loans or other amounts
have become a substantially greater risk given its default status and that the
Banks are entitled to additional compensation for such risk.
(b) In the event, and on each occasion, that prior to the
commencement of any Interest Period for a Eurodollar Loan, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that dollar deposits in the principal amount of such Eurodollar Loan
are not generally available in the London interbank market, or that the rate at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to the Banks of making or maintaining the principal amount of
such Eurodollar Loan during such Interest Period, or that reasonable means do
not exist for ascertaining the Eurodollar Rate, the Agent shall, as soon as
practicable thereafter, give written, telegraphic or telephonic notice of such
determination to the Borrower and the Banks. After such notice shall have been
given and until the circumstances giving rise to such notice no longer exist,
each request for a Eurodollar Loan or for conversion to or maintenance of a
Eurodollar Loan pursuant to the terms of this Agreement shall be deemed to be a
request for a Base Rate Loan.
2.10 Termination, Reduction and Extension of Commitments.
---------------------------------------------------
(a) The Total Commitment shall be automatically terminated
on the Termination Date.
-24-
(b) Subject to the last sentence of this paragraph, upon
at least five Business Days' prior irrevocable written or telecopy notice to
the Agent, the Borrower may at any time in whole permanently terminate, or from
time to time permanently reduce, the Commitment. Each partial reduction of the
Total Commitment shall be in a minimum principal amount of $5,000,000 or in
whole multiples thereof, and no such termination or reduction shall be made
which would, after giving effect to any prepayments of Revolving Credit Loans
on such date reduce the Total Commitment to an amount less than the amount of
the Total Exposure.
(c) Each reduction in the Total Commitment hereunder,
other than the scheduled reduction of $5,000,000 as of December 31, 2002, shall
be made ratably among the Banks in accordance with their respective Commitment
Percentages. The Borrower shall pay to the Agent for the account of the Banks,
on the date of each termination or reduction, the Commitment Fees on the amount
of the Commitments so terminated or reduced accrued to the date of such
termination or reduction. In connection with any reduction of the Total
Commitment, the Borrower shall make any prepayment required under Section
2.11(b).
(d) During the period beginning ninety days prior to the
then effective Termination Date and ending sixty (60) days prior to such
Termination Date, the Borrower may deliver to the Agent (which shall promptly
transmit to each Bank) a notice requesting that the Commitments be extended for
an additional nine months beyond the Termination Date then in effect. Within
forty-five days after its receipt of any such notice, each Bank shall notify the
Agent of its willingness or unwillingness to extend its Commitment. Any Bank
that shall fail to notify the Agent within such period shall be deemed to have
declined to extend its Commitment. If each (but only if each) Bank agrees to
extend its Commitment, the Agent shall so notify the Borrower and each Bank,
whereupon (i) the respective Commitments of the Banks shall without further act
by any party hereto, be extended to the date nine months after the Termination
Date then in effect and (ii) the term "Termination Date" shall thereafter mean
such date. Any such extension shall be evidenced by a written agreement among
the Agent, the Banks and the Borrower, such agreement to be in form and
substance acceptable to the Agent and the Banks. In the event that one or more
Banks (each a "Non-Electing Bank") shall have declined or been deemed to have
-----------------
declined to extend its or their Commitment and Banks holding a majority in
amount of the Commitments shall have notified the Agent of their desire to
extend their Commitments, the Borrower shall have the right, but not the
obligation, at its own expense, upon notice to each such Non-Electing Bank and
the Agent, to replace all (but not less than all) such Non-Electing Banks (in
accordance with and subject to the restrictions contained in Section 9.6) at any
time before the thirtieth (30th) day prior to the Termination Date with one or
more assignees (each a "Replacement Bank") willing to purchase all of the
----------------
Non-Electing Banks' interests hereunder and to agree to extend its or their
Commitment in accordance with the notice referred to in the first sentence of
this paragraph (d). In such event, each Non-Electing Bank shall promptly upon
request transfer and assign without recourse (in accordance with and subject to
the restrictions contained in Section 9.6) all its interests, rights and
obligations under this Agreement to the applicable Replacement Bank; provided,
--------
however, that (i) no such assignment shall conflict with any law or any rule,
-------
regulation or order of any Governmental Authority, (ii) the applicable
Replacement Bank shall pay to the applicable Non-Electing Bank in immediately
available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Loans made by such Non-Electing Bank
hereunder and all other amounts
-25-
accrued for such Non-Electing Bank's account or owed to it hereunder (including
Commitment Fees and any unpaid costs or expenses), and (iii) a Non-Electing
Bank shall not be required to sell its interests hereunder unless the Borrower
has arranged for one or more Replacement Banks to acquire the interests of all
other Non-Electing Banks. If, as a result of the foregoing, each Bank
(including Replacement Banks, but excluding Non-Electing Banks whose interests
have been purchased as provided above) has agreed to extend its Commitment, the
Commitments shall be extended as provided in clause (i) of the fourth sentence
of this paragraph and the term Termination Date shall have the meaning set
forth in clause (ii) in such fourth sentence of this paragraph (d).
2.11 Optional and Mandatory Prepayments of Revolving Credit Loans.
------------------------------------------------------------
(a) The Borrower shall have the right at any time and from
time to time to prepay any Revolving Credit Borrowing, in whole or in part,
without premium or penalty (but in any event subject to Section 2.15), upon
prior written, telecopy or telephonic notice to the Agent given no later than
10:30 a.m., Wilmington time, one Business Day before any proposed prepayment;
provided, however, that each such partial prepayment shall be in the principal
-------- -------
amount of at least (x) with respect to Base Rate Loans, $100,000 or in whole
multiples thereof and (y) with respect to Eurodollar Loans, $500,000 or in
whole multiples of $100,000 in excess thereof or, in either case, the entire
amount outstanding, whether or not divisible by $100,000.
(b) On the date of any reduction of the Total Commitment
pursuant to Section 2.10, the Borrower shall pay or prepay so much of the
Revolving Credit Borrowings as shall be necessary in order that, after giving
effect to such reduction and any such payments, the Exposure at such time will
not exceed the Total Commitment.
(c) Each notice of prepayment shall specify the prepayment
date and the principal amount of each Borrowing of Revolving Credit Loans to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing (or portion thereof) by the amount stated therein. All prepayments on
Eurodollar Loans under this Section shall be accompanied by accrued interest on
the principal amount being prepaid to the date of prepayment.
2.12 Illegality. Notwithstanding any other provision herein, if any
----------
change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Bank to make or maintain Eurodollar
Loans as contemplated by this Agreement, (a) the commitment of such Bank
hereunder to make or refinance Eurodollar Loans, continue Eurodollar Loans as
such and convert or refinance Base Rate Loans to Eurodollar Loans shall
forthwith be cancelled and (b) such Bank's Loans then outstanding as Eurodollar
Loans, if any, shall be converted automatically to Base Rate Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such conversion
of a Eurodollar Loan occurs on a day which is not the last day of the then
current Interest Period with respect thereto, the Borrower shall pay to such
Bank such amounts, if any, as may be required pursuant to Section 2.15.
2.13 Requirements of Law.
-------------------
-26-
(a) In the event that any change in any Requirement of Law
or in the interpretation, or application thereof or compliance by any Bank with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Bank to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Letter of Credit, any
Application or any Eurodollar Loan made by it, or change the basis of taxation
of payments to such Bank in respect thereof (except for taxes covered by
Section 2.14 and changes in the rate of tax on the overall net income, gross
receipts or revenue of such Bank);
(ii) shall impose, modify or hold applicable any
reserve, special deposit or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any office
of such Bank which is not otherwise included in the determination of the
interest rate on such Eurodollar Loan hereunder; or
(iii) shall impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof then, in any such case, the Borrower shall as promptly as practicable
pay such Bank, upon its demand, any additional amounts necessary to compensate
such Bank for such increased cost or reduced amount receivable; provided, that
--------
the Borrower shall not be liable for any such amounts incurred by such Bank
more than 90 days prior to the date of such Bank's notification to the
Borrower. If any Bank becomes entitled to claim any additional amounts pursuant
to this subsection, it shall as promptly as practicable notify the Borrower,
through the Agent, of the event by reason of which it has become so entitled. A
certificate as to any additional amounts payable pursuant to this subsection
submitted by such Bank, through the Agent, to the Borrower shall be reasonably
detailed and include supporting documentation, and shall be conclusive in the
absence of manifest error. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) In the event that any Bank shall have determined that
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Bank or such corporation could have achieved but
for such change or compliance (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, after submission by such Bank
to the Borrower (with a copy to the Agent) of a written request therefor, which
shall be
-27-
reasonably detailed and include supporting documentation, the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such reduction; provided, that the Borrower shall not be liable for any
--------
such amounts incurred by such Bank more than 90 days prior to the date of such
Bank's notification to the Borrower.
(c) Each Bank agrees that it will use reasonable efforts
in order to avoid or to minimize, as the case may be, the payment by the
Borrower of any additional amount under Section 2.13(b); provided, however,
-------- -------
that no Bank shall be obligated to incur any expense, cost or other amount in
connection with utilizing such reasonable efforts.
(d) Notwithstanding the foregoing Section 2.13(a), (b)
and (c), the Borrower shall not be required to pay any additional amounts to
any Bank that is not incorporated under the laws of the United States or a
state thereof as a result of any change in any Requirement of Law or compliance
by such Bank with any request or directive from any central bank or
Governmental Authority to the extent that such additional amounts exceed the
amounts that would have been payable by the Borrower under Section 2.13(a), (b)
or (c) to a Bank incorporated under the laws of the United Stated or a state
thereof.
2.14 Taxes.
-----
(a) All payments made by the Borrower under this Agreement
and the Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority (excluding, net income taxes and franchise or gross
receipts taxes imposed in lieu of net income taxes imposed on the Agent or any
Bank as a result of a present or former connection between the jurisdiction of
the government or taxing authority imposing such tax and the Agent or such Bank
(excluding a connection arising solely from the Agent or such Bank having
executed, delivered or performed its obligations or received a payment under,
or enforced, this Agreement or the Notes)) (all such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"). If any Taxes are required to be withheld from any
-----
amounts payable to the Agent or any Bank hereunder or under the Notes, the
amounts so payable to the Agent or such Bank shall be increased to the extent
necessary to yield to the Agent or such Bank (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes. Whenever any Taxes are
payable by the Borrower, as promptly as possible thereafter the Borrower shall
send to the Agent for its own account or for the account of such Bank, as the
case may be, a certified copy of an original official receipt received by the
Borrower showing payment thereof. If the Borrower fails to pay any Taxes when
due to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Banks for any incremental taxes, interest or
penalties that may become payable by the Agent or any Bank as a result of any
such failure. The agreements in this subsection shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.
-28-
(b) Each Bank that is not incorporated under the laws of
the United States of America or a state thereof agrees that it will deliver to
the Borrower and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form W-8ECI or W-8BEN or successor applicable form, as
the case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or
successor applicable form. Each such Bank also agrees to deliver to the
Borrower and the Agent two further copies of the said Form W-8ECI or W-8BEN and
Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower, and
such extensions or renewals thereof as may reasonably be requested by the
Borrower or the 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 all
such forms inapplicable or which would prevent such Bank from duly completing
and delivering any such form with respect to it and such Bank so advises the
Borrower and the Agent. Such Bank shall certify (i) in the case of a Form
W-8ECI or W-8BEN, that it is entitled to receive payments under this Agreement
without deduction or withholding of any United States federal income taxes and
(ii) in the case of a Form W-8 or W-9, that it is entitled to an exemption from
United States backup withholding tax.
(c) Notwithstanding the foregoing Section 2.14(a) or (b),
the Borrower shall not be required to pay any additional amounts pursuant to
such Sections (i) to any Bank in respect of United States withholding tax if
(A) the obligation to pay such additional amounts would not have arisen but for
a failure by such Bank to comply with the requirements of Section 2.14(b) or
(B) such Bank shall not have furnished the Borrower with such forms listed in
Section 2.14(b) and shall not have taken such other steps as reasonably may be
available to it under applicable tax laws and any applicable tax treaty or
convention to obtain an exemption from, or reduction (to the lowest applicable
rate) of, such United States withholding tax or (ii) to any Bank that is not
incorporated under the laws of the United States or a state thereof to the
extent that such additional amounts exceed the amounts that would have been
payable by the Borrower under Section 2.14(a) or (b) to a Bank incorporated
under the laws of the United States or a state thereof.
2.15 Indemnity.
---------
(a) The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from any loss or expense which such Bank may sustain or
incur as a consequence of (i) default by the Borrower in payment when due of
the principal amount of or interest on any Eurodollar Loan, (ii) default by the
Borrower in making a borrowing of, conversion into or continuation of
Eurodollar Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (iii) default by the Borrower
in making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (iv) the making of a
prepayment of Eurodollar Loans on a day which is not the last day of an
Interest Period with respect thereto. This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
-29-
(b) For the purpose of calculation of all amounts payable
to a Bank under this subsection, each Bank shall be deemed to have actually
funded its relevant Eurodollar Loan through the purchase of a deposit bearing
interest at the Eurodollar Rate in an amount equal to the amount of that
Eurodollar Loan and having a maturity comparable to the relevant Interest
Period; provided, however, that each Bank may fund each of its Eurodollar Loans
-------- -------
in any manner it sees fit, and the foregoing assumption shall be utilized only
for the calculation of amounts payable under this subsection. This covenant
shall survive the termination of this Agreement and the payment of the Notes
and all other amounts payable hereunder.
2.16 Pro Rata Treatment, Etc. Except as required under Section 2.12,
-----------------------
each Revolving Credit Borrowing, each payment or prepayment of principal of any
Revolving Credit Borrowing, each payment of interest on the Revolving Credit
Loans, each payment of Letter of Credit fees (other than fees for the account
of the Issuing Bank), each reduction of the Commitments, each refinancing of
any Borrowing with a Revolving Credit Borrowing of any Type, each payment of
Commitment Fees and each conversion of Revolving Credit Loans, shall be made
pro rata among the Banks in accordance with their respective Commitment
--- ----
Percentages. Each Bank agrees that in computing such Bank's portion of any
Borrowing to be made hereunder, the Agent may, in its discretion, round each
Bank's percentage of such Borrowing to the next higher or lower whole dollar
amount.
2.17 Payments.
--------
(a) The Borrower shall make each payment (including
principal of or interest on any Loan or any fees or other amounts) hereunder
not later than 12:00 (noon), Wilmington time, on the date when due in Dollars
to the Agent at its offices specified in Section 9.2 or at such other place as
may be designated by the Agent, in immediately available funds. The Agent shall
distribute to the Banks any payments received by the Agent on the date received
in like funds as received.
(b) Whenever any payment (including principal of or
interest on any Loan or any fees or other amounts) hereunder 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, and such extension of time shall
in such case be included in the computation of interest or fees, if applicable.
2.18 Conversion and Continuation Options. The Borrower shall have
-----------------------------------
the right at any time upon prior irrevocable notice to the Agent (i) not later
than 12:00 noon, Wilmington time, on the Business Day of conversion, to convert
any Eurodollar Loan to a Base Rate Loan, (ii) not later than 12:00 noon,
Wilmington time, three Business Days prior to conversion or continuation, to
(y) convert any Base Rate Loan into a Eurodollar Loan, or (z) to continue any
Eurodollar Loan as a Eurodollar Loan for any additional Interest Period and
(iii) not later than 12:00 noon, Wilmington time, three Business Days prior to
conversion, to convert the Interest Period with respect to any Eurodollar Loan
to another permissible Interest Period, subject in each case to the following:
-------
-30-
(a) a Eurodollar Loan may not be converted at a time other
than the last day of the Interest Period applicable thereto;
(b) any portion of a Loan maturing or required to be
repaid in less than one month may not be converted into or continued as a
Eurodollar Loan;
(c) no Eurodollar Loan may be continued as such and no
Base Rate Loan may be converted to a Eurodollar Loan when any Default or Event
of Default has occurred and is continuing and the Agent or the Required Banks
have determined that such a continuation is not appropriate;
(d) any portion of a Eurodollar Loan that cannot be
converted into or continued as a Eurodollar Loan by reason of Section 2.18(b)
or (c) automatically shall be converted at the end of the Interest Period in
effect for such Loan to a Base Rate Loan; and
(e) on the last day of any Interest Period for Eurodollar
Loans if the Borrower shall have failed to give notice of conversion or
continuation as described in this subsection or if such conversion or
continuation is not permitted pursuant to this Section 2.18, such Loans shall
be converted to Base Rate Loans on the last day of such then expiring Interest
Period.
Accrued interest on a Loan (or portion thereof) being converted shall be paid
by the Borrower at the time of conversion.
2.19 Use of Proceeds. The Letters of Credit and the proceeds of the
---------------
Loans shall be used by the Borrower for working capital and general corporate
purposes in the ordinary course of business (including, but not limited to,
refinancing existing working capital-related indebtedness and, subject to the
other provisions of this Agreement, acquisition financing).
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this Agreement, and to
make the Loans and to issue and /or participate in Letters of Credit, the
Borrower hereby represents and warrants to the Agent and each Bank that:
3.1 Financial Condition.
-------------------
(a) Audited Financials. The consolidated balance sheet of
------------------
the Borrower and its consolidated Subsidiaries as at December 31, 2000 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, copies of which have heretofore been furnished to each
Bank, present fairly the consolidated financial condition of the Borrower and
its consolidated Subsidiaries as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved. Neither the Borrower nor any of its
consolidated Subsidiaries had, as of December 31, 2000, any material Contingent
Obligation, liability for taxes, or any long-term lease or unusual forward or
long-term
-31-
commitment, including, without limitation, any Interest Hedge Agreement, which
is not reflected in the financial statements contained in the Borrower's Annual
Report on Form 10-K for the period ended December 31, 2000 or the notes thereto.
(b) No Sales. During the period from December 31, 2000, to
--------
and including the date of this Agreement there has been no sale, transfer or
other disposition by the Borrower or any of its consolidated Subsidiaries of
any material part of its business or property and no purchase or other
acquisition of any business or property (including any Capital Stock of any
other Person) material in relation to the financial condition of the Borrower
and its consolidated Subsidiaries at December 31, 2000.
3.2 No Adverse Change. Since December 31, 2000, there has been no
-----------------
development or event nor any prospective development or event which has had or
could reasonably be expected individually or in the aggregate to have a
Material Adverse Effect.
3.3 Corporate Existence; Compliance with Law. Each of the Borrower
----------------------------------------
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to be so
qualified and/or in good standing could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect and (d) is in compliance with all
Requirements of Law except to the extent that the failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. The
-------------------------------------------------------
Borrower has the corporate power, authority, and legal right, to make, deliver
and perform this Agreement, the Notes and the other Loan Documents to which it
is a party and to borrow hereunder and has taken all necessary corporate action
to authorize the borrowings on the terms and conditions of this Agreement and
the Notes and to authorize the execution, delivery and performance of this
Agreement, the Notes and the other Loan Documents to which it is a party. No
consent or authorization of, filing with or other act by or in respect of, any
Governmental Authority or any other Person (including stockholders and
creditors of the Borrower) is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement, each Note or the other Loan Documents. This
Agreement has been, and each Notes and other Loan Document will be, duly
executed and delivered on behalf of the Borrower. This Agreement constitutes,
and the Notes and other Loan Document when executed and delivered will
constitute, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
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3.5 No Legal Bar. The execution, delivery and performance of this
------------
Agreement, the Notes and the other Loan Documents by the Borrower, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or Contractual Obligation of the Borrower or of any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or revenues pursuant to
any such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. No litigation, investigation or
----------------------
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or revenues
(a) with respect to this Agreement, the Notes or the other Loan Documents or
any of the transactions contemplated hereby, or (b) as to which there is a
reasonable likelihood of an adverse determination and which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
3.7 No Default. Neither the Borrower nor any of its Subsidiaries
----------
is in default under or with respect to any of its Contractual Obligations in
any respect which could reasonably be expected to have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
3.8 Taxes. Each of the Borrower and its Subsidiaries has filed or
-----
caused to be filed all tax returns which, to its knowledge, are required to be
filed and has paid all taxes shown to be due and payable on said returns or on
any assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any Governmental
Authority (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of the
Borrower or its Subsidiaries, as the case may be); no tax Lien has been filed
against the Borrower or any of its Subsidiaries, and, to the knowledge of the
Borrower, no claim is being asserted, with respect to any such tax, fee or
other charges.
3.9 Federal Regulations. No part of the proceeds of any Loans will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or for any purpose
which violates the provisions of Regulation U. If requested by any Bank or the
Agent, the Borrower will furnish to the Agent and each Bank a statement to the
foregoing effect in conformity with the requirements of FR Form U-l referred to
in said Regulation U. No part of the proceeds of the loans hereunder will be
used for any purpose which violates, or which is inconsistent with, the
provisions of Regulation X.
3.10 ERISA.
-----
(a) Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Single
Employer Plan, and each Single Employer Plan has compiled in all material
respects with the applicable provisions of ERISA and the Code. No
-33-
termination of a Single Employer Plan has occurred and no lien in favor of the
PBGC or a Plan has arisen during the five-year period prior to the date as of
which this representation is made or deemed made. No other event or condition
has occurred or exists with respect to any Plan that could reasonably be
expected individually or in the aggregate to have a Material Adverse Effect.
(b) The present value of all accrued benefits under each
Single Employer Plan in which the Borrower or any Commonly Controlled Entity is
a participant (based on those assumptions used to fund the Plans) did not, as
of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by an amount in excess of ten percent
(10%) of Consolidated Net Worth as of the end of the most recent fiscal year of
the Borrower for which financial statements have been delivered to the Banks
pursuant to this Agreement.
(c) Neither the Borrower nor any Commonly Controlled
Entity has had a complete or partial withdrawal from any Multiemployer Plan,
and neither the Borrower nor any Commonly Controlled Entity would become
subject to any liability under ERISA if the Borrower or any such Commonly
Controlled Entity were to withdraw completely from all Multiemployer Plans as
of the valuation date most closely preceding the date on which this
representation is made or deemed made, in any such case which could reasonably
be expected individually or in the aggregate to have a Material Adverse Effect.
(d) To the Borrower's knowledge, no such Multiemployer
Plan is in "reorganization" or "insolvent," within the meaning of such terms as
used in ERISA.
(e) The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Borrower and each Commonly
Controlled Entity for post retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of ten percent
(10%) of the Borrower's consolidated net worth as of the end of the most recent
fiscal year of the Borrower for which financial statements have been delivered
to the Banks pursuant to this Agreement.
3.11 Investment Company Act; Public Utility Holding Company Act.
----------------------------------------------------------
Neither the Borrower nor any of its Subsidiaries is (a) an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended; (b) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (c) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.
3.12 Purpose of Loans; Letters of Credit. The proceeds of the Loans
-----------------------------------
and the Letters of Credit shall only be used by the Borrower for the purposes
permitted under Section 2.19.
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3.13 Environmental Matters. To the best knowledge of the Borrower,
---------------------
each of the representations and warranties set forth in paragraphs (a) through
(e) of this subsection is true and correct with respect to each parcel of real
property owned or operated by the Borrower or any of its Subsidiaries (the
"Properties"), except to the extent that the facts and circumstances giving
rise to any such failure to be so true and correct could not reasonably be
expected to have a Material Adverse Effect:
(a) The Properties do not contain, and have not previously
contained, in, on, or under, including, without limitation, the soil and
groundwater thereunder, any Materials of Environmental Concern in
concentrations which violate Environmental Laws.
(b) The Properties and all operations and facilities at
the Properties are in compliance with Environmental Laws, and there is no
Materials of Environmental Concern contamination or violation of any
Environmental Law which would materially interfere with the continued operation
of any of the Properties or materially impair the fair saleable value of any
thereof.
(c) Neither the Borrower nor any of its Subsidiaries has
received or is aware of any claim, notice of violation, alleged violation,
non-compliance, investigation or advisory action or potential liability
regarding environmental matters or compliance of Environmental Law with regard
to the Properties which has not been satisfactorily resolved by the Borrower or
such Subsidiary, nor is the Borrower or any of its Subsidiaries aware or have
reason to believe that any such action is being contemplated, considered or
threatened.
(d) Materials of Environmental Concern have not been
generated, treated, stored, disposed of, at, on or under any of the Properties
in violation of Environmental Laws, nor have any Materials of Environmental
Concern been transferred from the Properties to any other location except in
either case in the ordinary course of business of the Borrower and its
Subsidiaries and in material compliance with all Environmental Laws.
(e) There are no governmental, administrative actions or
judicial proceedings pending or, to the best knowledge of the Borrower,
contemplated under any Environmental Laws to which the Borrower or any of its
Subsidiaries is or will be named as a party with respect to the Properties, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to any of the Properties.
3.14 No Burdensome Restrictions. No Requirement of Law or
--------------------------
Contractual Obligation of the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
3.15 Ownership of Borrower and Subsidiaries. The beneficial
--------------------------------------
ownership of the Capital Stock of the Borrower by its executive officers,
directors and 5% shareholders has not changed materially from that set forth in
the Borrower's most recent registration statement as filed with the Securities
and Exchange Commission. The Borrower owns all of the issued and
-35-
outstanding capital stock of each of the Guarantor and, as of the date of this
Agreement, the Borrower owns all of the issued and outstanding Capital Stock of
each of its Subsidiaries.
3.16 Patents, Trademarks, etc. Each of the Borrower and its
------------------------
Subsidiaries has obtained and holds in full force and effect or is licensed to
use all patents, trademarks, servicemarks, trade names, copyrights and other
such rights, free from burdensome restrictions, which are necessary for the
operation of its business as presently conducted. To the Borrower's best
knowledge, no material product, process, method, substance, part or other
material presently sold by or employed by the Borrower or any Subsidiary in
connection with such business infringes any patent, trademark, service xxxx,
trade name, copyright, license or other right owned by any other Person. There
is not pending or, to the Borrower's knowledge, overtly threatened any claim or
litigation against or affecting the Borrower or any Subsidiary contesting its
right to sell or use any such product, process, method, substance, part or
other material which could reasonably be expected to have a Material Adverse
Effect.
3.17 Ownership of Property. Each of the Borrower and its
---------------------
Subsidiaries has good and marketable fee simple title to or valid leasehold
interests in all real property owned or leased by it, and good title to all of
its personal property subject to no Lien of any kind except Permitted Liens.
3.18 Licenses, etc. Each of the Borrower and its Subsidiaries has
-------------
obtained and holds in full force and effect, all franchises, licenses, permits,
certificates, authorizations, qualifications, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
its business as presently conducted.
3.19 Labor Matters. As of the Effective Date, there are no
-------------
collective bargaining agreements or Multiemployer Plans covering the employees
of the Borrower or any of its Subsidiaries, and none of the Borrower nor any of
its Subsidiaries has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years and to the best knowledge
of the Borrower, there are none now threatened.
3.20 Material Contracts. All material contracts relating to the
------------------
business operations of the Borrower are valid, binding and enforceable upon the
Borrower and, to the Borrower's knowledge, each of the parties thereto in
accordance with their respective terms, and there is no material default
thereunder, to the Borrower's knowledge, with respect to parties other than the
Borrower.
3.21 Insurance. The Borrower and its Subsidiaries currently maintain
---------
insurance which meets or exceeds the requirements of Section 5.5 No notice has
been given or claim made and no grounds exist to cancel or avoid any insurance
policies or other bonds to which the Borrower or any of its Subsidiaries is a
party or to reduce the coverage provided thereby or any replacements thereof.
Such policies and bonds or any replacements thereof provide adequate coverage
from reputable and financially sound insurers in amounts sufficient to insure
the assets and risks of the Borrower and its Subsidiaries in accordance with
prudent business practice in the industry of the Borrower and its Subsidiaries.
-36-
3.22 Senior Debt Status. The obligations of the Borrower under this
------------------
Agreement and the Notes do rank and will rank at least pari passu in priority
---- -----
of payment with all other indebtedness of the Borrower except indebtedness of
the Borrower to the extent secured by Permitted Liens. There is no Lien upon or
with respect to any of the properties or income of the Borrower which secures
indebtedness or other obligations of any Person except for Permitted Liens.
3.23 No Material Misstatements. To the best of the Borrower's
-------------------------
knowledge, no information furnished by or on behalf of the Borrower or any
Subsidiary to the Agent or any Bank in this Agreement or any Schedule or
Exhibit attached hereto, or in the Borrower's financial projections delivered
pursuant to Section 4.1(k) hereof, contains any misstatement of fact, or
omitted or omits to state any fact necessary to make the statements therein not
misleading, where such misstatement or omission would be material to the
interests of the Banks with respect to the Borrower's performance of its
obligations hereunder. Any projections, forecasts or budgets provided by the
Borrower to the Agent or any Bank (other than the financial projections
delivered pursuant to Section 5.2(b) hereof) are expressly excluded from this
Section and the Borrower makes no representation or warranty as to their
accuracy or reliability. With regard to the financial projections delivered
pursuant to Section 5.2(b), the Borrower shall be entitled to a cross-reference
therein to the forward-looking statements disclaimers contained in its filings
with the Securities and Exchange Commission and the benefits of the safe harbor
afforded under the Private Securities Litigation Reform Act of 1995.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Effectiveness. The effectiveness of this
---------------------------
Agreement and the agreement of each Bank to make the initial Extension of
Credit is subject to the satisfaction of the following conditions precedent
immediately prior to or concurrently with such Extension of Credit:
(a) Loan Documents. The Agent shall have received (i) this
--------------
Agreement, executed and delivered by a duly authorized officer of the Borrower,
with a counterpart for each Bank, (ii) for the account of each Bank, a
Revolving Credit Note conforming to the requirements hereof and executed by a
duly authorized officer of the Borrower, (iii) for the account of the Swing Line
Bank, the Swing Lin e Note conforming to the requirements hereof and executed
by a duly authorized officer of the Borrower and (iv) the Guaranty Agreement,
executed and delivered by a duly authorized officer of the Guarantor.
(b) Corporate Proceedings of the Borrower and the
---------------------------------------------
Guarantor. The Agent shall have received a copy of the resolutions or other
---------
corporate proceedings or action, in form and substance satisfactory to the
Agent, (i) taken on behalf of the Borrower authorizing (A) the execution,
delivery and performance of this Agreement, the Notes and the other Loan
Documents to which it is a party, and (B) the borrowings contemplated
hereunder, and (ii) taken on behalf of the Guarantor authorizing the execution,
delivery and performance of the Guaranty Agreement, in each case certified by
the secretary or assistant secretary of the Borrower or the Guarantor as of the
Effective Date, which certificates shall state that such resolutions, or other
-37-
corporate proceedings or action thereby certified have not been amended,
modified, revoked or rescinded and shall be in form and substance satisfactory
to the Agent.
(c) Representations and Warranties True; No Default. The
-----------------------------------------------
representations and warranties of the Borrower contained in Section 3 hereof
shall be true and accurate on and as of the Effective Date with the same effect
as though such representations and warranties had been made on and as of such
date (except representations and warranties which relate solely to an earlier
date or time, which representations and warranties shall be true and correct on
and as of the specific dates or times referred to therein), and the Borrower
shall have performed and complied with all covenants and conditions hereof; and
no Event of Default or Default under this Agreement shall have occurred and be
continuing or shall exist; and the Borrower shall have delivered to the Agent a
certificate to that effect signed by a Responsible Officer.
(d) Corporate Documents. The Agent shall have received
-------------------
true and complete copies of the articles or certificate of incorporation and
bylaws of the Borrower, certified as of the Effective Date as complete and
correct copies thereof by the secretary or assistant secretary of the Borrower,
or a certificate from the secretary or assistant secretary of the Borrower to
the effect that there have been no changes in the articles or certificate of
incorporation and bylaws of the Borrower from the copies most recently
delivered to the Agent, and a good standing certificate recently issued by the
Secretary of State (or the equivalent thereof) of the jurisdiction of
incorporation of the Borrower and the Guarantor and of each state in which the
Borrower is required to be qualified to transact business.
(e) Incumbency. The Agent shall have received (i) a
----------
written certificate dated the Effective Date by the secretary or assistant
secretary of the Borrower as to the names and signatures of the officers of the
Borrower authorized to sign this Agreement and the other Loan Documents and
(ii) a written certificate dated the Effective Date by the secretary or
assistant secretary of the Guarantor as to the names and signatures of the
officers of the Guarantor authorized to sign the Guaranty Agreement. The Agent
may conclusively rely on such certificates until it shall receive a further
certificate by the secretary or assistant secretary of the Borrower or the
Guarantor amending such prior certificate.
(f) Fees and Expenses. The Borrower shall pay or cause to
-----------------
be paid to the Agent the fees to be received on the Effective Date referred to
herein and the reasonable costs and expenses for which the Agent and the Banks
are entitled to be reimbursed.
(g) Legal Opinion. The Agent shall have received the
-------------
executed legal opinion of Xxxxx X. Xxxxxxxxxx, Esquire, General Counsel to the
Borrower and the Guarantor, substantially in the form of Exhibit D hereto. Such
---------
opinion shall be addressed to the Banks and the Agent and cover such other
matters incident to the transactions contemplated by this Agreement as the
Agent may reasonably require.
(h) No Material Adverse Change. Since December 31, 2000
--------------------------
there shall have been no material adverse change in the financial condition or
prospects of the Borrower and its Subsidiaries taken as a whole (including,
without limitation, with respect to
-38-
assets, net worth and credit position), and the Borrower shall have delivered
to the Agent a certificate to that effect signed by a Responsible Officer.
(i) UCC Filing and Other Searches. The Agent shall
-----------------------------
have received the results of such additional Uniform Commercial Code searches
made with respect to the Borrower and its Subsidiaries, if any, as the Agent
shall require, together with copies of financing statements disclosed by such
searches, and the foregoing searches shall disclose no Liens, except for
Permitted Liens or, if unpermitted Liens are disclosed, the Agent shall have
received satisfactory evidence of the release of such Liens.
(j) Spin-Off. The spin-off of Dover Downs, Inc. as a
--------
wholly-owned subsidiary of the Borrower, as described in the Registration
Statement on Form 10 filed by the Borrower and bearing SEC File No. 001-16791,
shall have been consummated, and the Borrower shall have delivered to the Agent
a certificate to that effect signed by a Responsible Officer.
4.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Bank to make any Extension of Credit requested to be made by it on any date
(including, without limitation, the first such Extension of Credit hereunder)
is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
------------------------------
representations and warranties (i) made by the Borrower herein or (ii) which
are contained in any certificate, document or financial or other statement
furnished at any time under or in connection herewith or therewith shall be
true and correct in all material respects on and as of such date as if made on
and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times referred to
therein and subject as to any representations or warranties referred to in
subsection (ii) above to the exclusions and qualifications referred to in the
last two sentences of Section 3.23).
(b) No Default. No Default or Event of Default shall have
----------
occurred and be continuing on such date or after giving effect to the
Extensions of Credit requested to be made on such date.
(c) Additional Matters. All corporate and other
------------------
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be satisfactory in form and substance to the Agent, and
the Agent shall have received such other documents in respect of any aspect or
consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
Each borrowing by the Borrower hereunder or request for the issuance of a
Letter of Credit shall constitute a representation and warranty by the Borrower
as of the date of such Loan or issuance of such Letter of Credit that the
conditions contained in this Section 4.2 have been satisfied.
-39-
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note remains outstanding and unpaid, any Letter of Credit remains
outstanding or any other amount is owing to any Bank or the Agent hereunder,
the Borrower shall and (except in the case of delivery of financial
information, reports and notices) shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Bank:
--------------------
(a) as soon as available, but in any event not later than
100 days after the close of each fiscal year of the Borrower, a copy of the
annual audit report for such year for the Borrower and its consolidated
Subsidiaries, including therein the consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such fiscal year, and
related consolidated statement of income, retained earnings and cash flow of
the Borrower and its consolidated Subsidiaries for such fiscal year, setting
forth in each case in comparative form the corresponding figures for the
preceding fiscal year, all in reasonable detail, prepared in accordance with
GAAP applied on a basis consistently maintained throughout the period involved
and with the prior year with such changes therein as shall be approved by the
Borrower's independent certified public accountants, such consolidated
financial statements to be certified by independent certified public
accountants selected by the Borrower from among the five largest accounting
firms in the United States on the date of this Agreement or their successors,
or otherwise acceptable to the Agent, without a "going concern" or like
qualification or any exception or qualification arising out of the restricted
or limited nature of the examination made by such accountants; and
(b) as soon as available, but in any event not later than
55 days after the end of each of the first three quarterly periods of each
fiscal year of the Borrower, a copy of its Report on Form 10-Q for such quarter
filed with the Securities and Exchange Commission.
5.2 Certificates; Other Information. Furnish to each Bank:
-------------------------------
(a) concurrently with the delivery of the financial
statements referred to in Sections 5.1(a) and (b), a certificate of a
Responsible Officer, in the form of Exhibit F hereto, showing in detail the
---------
calculations demonstrating compliance with Section 6.1 and stating that, to the
best of his or her knowledge, the Borrower during such period has kept,
observed, performed and fulfilled each and every covenant and condition
contained in this Agreement and in the Notes and the other Loan Documents
applicable to it and that he or she obtained no knowledge of any Default or
Event of Default except as specifically indicated;
(b) as soon as available, but in any event not later than
90 days after the end of each fiscal year, (i) detailed capital expenditure
budgets of the Borrower and each of its Subsidiaries by quarter and (ii) a
forecasted consolidated balance sheet, statement of income and statement of
cash flows for the Borrower and its Subsidiaries by quarter in each case for
the following two fiscal years;
(c) promptly upon their becoming available, but in any event
not later than 120 days after the end of each fiscal year, any reports
including management letters
-40-
submitted to the Borrower or any Subsidiary by independent accountants in
connection with any annual, interim or special audit;
(d) financial statements, reports, notices or proxy
statements distributed by the Borrower to its stockholders on a date no later
than three Business Days after the date supplied to such stockholders; and
(e) promptly, such additional financial and other
information as any Bank or the Agent may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all
its obligations of whatever nature, except (a) when the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or a Subsidiary, as the case may be, and (b) where
the failure so to pay such indebtedness could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
5.4 Conduct of Business and Maintenance of Existence. Continue to
------------------------------------------------
engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges, trademarks,
trade names, licenses, franchises and other authorizations necessary or
desirable in the normal conduct of its business; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not reasonably be expected to have, in the aggregate, a
Material Adverse Effect.
5.5 Maintenance of Property; Insurance.
----------------------------------
(a) Maintain in good repair, working order and condition
(ordinary wear and tear excepted) in accordance with the general practice of
other businesses of similar character and size, all of those properties
material or necessary to its business, and from time to time make or cause to
be made all appropriate repairs, renewals or replacements thereof.
(b) Insure its properties and assets against loss or
damage by fire and such other insurable hazards as such assets are commonly
insured (including fire, extended coverage, property damage, worker's
compensation, public liability and business interruption insurance) and against
other risks (including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary. The Borrower shall
deliver at the request of the Agent from time to time a summary schedule
indicating all insurance then in force with respect to the Borrower.
5.6 Inspection of Property; Books and Records; Discussions.
------------------------------------------------------
(a) Permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and inspect during
normal business hours any of its properties and to examine and make excerpts
from its books and records and
-41-
discuss its business affairs, finances and accounts (including those of its
Affiliates) with its officers, all in such detail and at such times and as often
as any of the Banks may reasonably request, provided, that each Bank shall
--------
provide the Borrower and the Agent with reasonable notice prior to any visit or
inspection.
(b) Maintain and keep proper books of record and account
which enable the Borrower and its Subsidiaries to issue financial statements in
accordance with GAAP and as otherwise required by applicable Requirements of
Law, and in which full, true and correct entries shall be made in all material
respects of all its dealings and business and financial affairs.
5.7 Notices. Promptly give notice to the Agent and each Bank of:
-------
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any
Contractual Obligation of the Borrower or any of the Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Borrower or any of the Subsidiaries and any Governmental Authority, which in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) commencement of any litigation or proceeding affecting
the Borrower or any of the Subsidiaries in which the amount involved is
$1,000,000 or more and not covered by insurance or in which injunctive or
similar relief is sought;
(d) the following events, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know thereof:
(i) the occurrence of any Reportable Event with respect to any Plan, any Lien
in favor of PBGC or any Plan, or any withdrawal from, or the termination,
Reorganization or Insolvency of any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of, any
Single Employer Plan in a distress termination under Section 4041(c) of ERISA
or Multiemployer Plan;
(e) an event which has had or could reasonably be expected
to have a Material Adverse Effect; and
(f) any Permitted Acquisition, prior to the consummation
thereof.
Each notice pursuant to this subsection shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower proposes to take with respect
thereto.
5.8 Environmental Laws.
------------------
(a) Comply with, and require compliance by all tenants and to
the extent possible, all subtenants, if any, with, all Environmental Laws and
obtain and comply with and maintain, and require that all tenants and to the
extent possible, all subtenants obtain and
-42-
comply with and maintain, any and all licenses, approvals, registrations or
permits required by Environmental Laws except to the extent that failure to so
comply or obtain or maintain such documents could not reasonably be expected to
have a Material Adverse Effect.
(b) Comply with all lawful and binding orders and
directives of all Governmental Authorities respecting Environmental Laws except
to the extent that failure to so comply could not reasonably be expected to
have a Material Adverse Effect.
(c) Defend, indemnify and hold harmless the Agent and the
Banks, and their respective employees, agents, officers, directors, successors
and assigns from and against any claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to any violation of or noncompliance with or liability under any
Environmental Laws, or any orders, requirements or demands of Governmental
Authorities related thereto which in each case relate to or arise in connection
with the Borrower or any Subsidiary, any property or assets thereof or any
activities relating to any other property or business of a Borrower or any
Subsidiary thereof or the enforcement of any rights provided herein or in the
other Loan Documents, including, without limitation, attorneys' and
consultants' fees, response costs, investigation and laboratory fees, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of any of the foregoing
enumerated parties. This indemnity shall continue in full force and effect
regardless of the termination of this Agreement and the payment of the Notes.
5.9 Management Changes. Notify the Agent in writing within thirty
------------------
(30) days after any change of its executive officers.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Note remains outstanding and unpaid, any Letter of Credit remains
outstanding or any other amount is owing to any Bank of the Agent hereunder,
the Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, without the prior written consent of the Required Banks:
6.1 Financial Condition Covenants.
-----------------------------
(a) Leverage Ratio. Permit as of the end of any fiscal
--------------
quarter the Leverage Ratio to exceed 2.25 to 1.
(b) Interest Coverage Ratio. Permit as of the end of any
-----------------------
fiscal quarter the Interest Coverage Ratio to be less than 5 to 1.
(c) Maintenance of Tangible Net Worth. Permit Consolidated
---------------------------------
Tangible Net Worth on any day to be less than (i) ninety percent (90%) of the
Consolidated Tangible Net Worth of the Borrower as of the effective date of the
spinoff referred to in Section 6.4(c) hereof, after giving effect thereto, plus
(ii) an amount equal to 25% of the consolidated net
-43-
income (if positive) of the Borrower and its Subsidiaries for each fiscal
quarter ending after March 31, 2002, calculated on a cumulative basis.
6.2 Limitation on Debt. At any time incur, create, assume, or
------------------
suffer to exist any Debt except:
(a) amounts outstanding hereunder or under the other Loan
Documents; and
(b) Debt under Capital Leases or secured by Purchase Money
Security Interests (including those in existence on the date hereof), and other
guarantees, loans or advances made in the ordinary course of business, in an
aggregate principal amount not exceeding $5,000,000 in any fiscal year.
6.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
6.4 Limitations on Fundamental Changes. Enter into any merger,
----------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets except:
(a) any Subsidiary of the Borrower, may be merged or
consolidated with or into the Borrower (provided, that the Borrower shall be
--------
the continuing or surviving corporation) or with or into any one or more
wholly-owned Subsidiaries of the Borrower (provided, that the wholly-owned
--------
Subsidiary or Subsidiaries shall be the continuing or surviving corporation);
(b) any wholly-owned Subsidiary may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the Borrower or any wholly-owned Subsidiary of the Borrower; and
(c) the transactions described in the Registration
Statement on Form 10, filed by the Borrower and bearing SEC File No.
001-16791;
provided, that immediately after each such transaction and after giving effect
--------
thereto, the Borrower is in compliance with this Agreement and no Default or
Event of Default shall be in existence or result from such transaction.
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, accounts receivables and leasehold interests),
whether now owned or hereafter acquired, except:
(a) any sale, transfer or lease of assets in the ordinary
course of business which are no longer necessary or required in the conduct of
the Borrower's or any Subsidiary's business;
-44-
(b) transactions involving the sale, license or lease of
assets in the ordinary course of business;
(c) the sale or discount without recourse of accounts
receivable only in connection with the compromise thereof or the assignment of
past-due accounts receivable for collection;
(d) as permitted by Section 6.4;
(e) transfers between the Borrower and its Subsidiaries or
between one Subsidiary and another Subsidiary; and
(f) in addition to the above Sections 6.5(a) through
6.5(e) inclusive, sales of assets of the Borrower and its Subsidiaries for fair
market value, provided, that the aggregate amount of such sales, determined in
--------
accordance with GAAP, in any fiscal year does not exceed ten percent (10%) of
the Borrower's consolidated assets as at the end of the immediately preceding
fiscal quarter.
6.6 Limitations on Acquisitions, Investments, Loans and Advances.
-------------------------------------------------------------
Purchase, hold or acquire beneficially any stock, other securities or evidences
of indebtedness of, make or permit to exist any loans or advances to, or make
or permit to exist any investment or acquire any interest whatsoever in, any
other Person, except:
(a) extensions of trade credit to customers in the
ordinary course of business;
(b) Permitted Investments;
(c) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the ordinary
course of business;
(d) Capital Stock of any Subsidiary;
(e) loans and advances by the Borrower to its wholly-owned
Subsidiaries; and
(f) Permitted Acquisitions.
6.7 Limitation on Distributions. Declare or pay any Distribution
---------------------------
(whether in cash or property or obligations of the Borrower or any Subsidiary
thereof) in respect of the Borrower or any Subsidiary thereof except:
(a) Any wholly-owned Subsidiary may declare and pay
dividends or other distributions to the Borrower or any other wholly-owned
Subsidiary; and
(b) So long as no Default or Event of Default exists or
would be caused thereby, the Borrower (i) may declare and pay dividends on its
Capital Stock in the
-45-
ordinary course of business consistent with past practice and (ii) may declare
and pay dividends on its Capital Stock in excess of those paid historically;
provided, that the amount of any such increase in dividends paid during any
fiscal year does not exceed, in the aggregate, 50% of Consolidated Net Income
for the previous fiscal year.
6.8 Transactions with Affiliates. Except as expressly permitted in
----------------------------
this Agreement, directly or indirectly enter into any transaction or
arrangement whatsoever or make any payment to or otherwise deal with any
Affiliate, except, as to all of the foregoing in the ordinary course of and
pursuant to the reasonable requirements of the Borrower's or its Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower
or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of the Borrower.
6.9 Fiscal Year. Permit its fiscal year to end on a day other than
-----------
December 31 unless prior written notice thereof has been given to the Agent and
the Banks.
6.10 Change in Business. Engage in any business either directly or
------------------
through any Subsidiary except for businesses in which the Borrower or any
Subsidiary is engaged in on the date of this Agreement and any businesses
related to such existing businesses.
6.11 Sale and Leaseback. Enter into any arrangement with any Person
------------------
providing for the leasing by the Borrower or any Subsidiary thereof of real or
personal property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations thereof.
6.12 Limitation on Negative Pledge Clauses. Enter into any agreement
-------------------------------------
with any Person other than the Banks which prohibits or limits the ability of
the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its properties, assets or revenues, whether now
owned or hereafter acquired; provided, that the Borrower or any Subsidiary
--------
thereof may enter into such an agreement in connection with a Purchase Money
Security Interest or Capital Lease permitted hereunder, provided that such
prohibition or limitation is by its terms effective only against the assets
subject to such Lien.
6.13 Interest Hedge Agreements. Enter into any interest hedge
-------------------------
agreement other than an Interest Hedge Agreement, which in any event will be
unsecured, and with respect to which the prior approval of the Agent, which
shall not be unreasonably withheld, shall have been obtained.
SECTION 7. EVENTS OF DEFAULT
7.1 Events of Default. If any of the following events shall occur
-----------------
and be continuing:
(a) The Borrower shall fail to pay any principal of any
Note or any Reimbursement Obligation when due in accordance with the terms
thereof or hereof; or the Borrower shall fail to pay any interest on any Note,
or any other amount payable hereunder,
-46-
within five (5) days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty (i) made or deemed made
by the Borrower herein or (ii) which is contained in any certificate, document
or financial or other statement furnished at any time under or in connection
with this Agreement or any other Loan Document shall prove to have been
incorrect in any material respect on or as of the date made or deemed made
(subject as to any representation or warranty referred to in subsection (ii)
above to the exclusions and qualifications contained in the last two sentences
of Section 3.23); or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 6; or
(d) The Borrower shall default in the observance or
performance of any other agreement contained in this Agreement (other than as
provided in paragraphs (a) through (c) of this Section 7.1) or any other Loan
Document, and such default shall continue unremedied for a period of 30 days; or
(e) One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance, subject to any customary
deductible, and under which the applicable insurance carrier has acknowledged
such full coverage in writing) of $500,000 or more and all such judgments or
decrees shall not have been vacated, discharged, settled, satisfied or paid, or
stayed or bonded pending appeal, within 60 days from the entry thereof; or
(f) A Borrower or any Subsidiary thereof shall (i) default
in the payment of any principal of or interest on or any other amount payable
on any indebtedness for borrowed money (other than the Notes), beyond the
period of grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such indebtedness was created and the aggregate amount of
such indebtedness in respect of which such default or defaults shall have
occurred is at least $100,000 (the "Cross-Default Indebtedness"); or (ii)
--------------------------
default in the observance or performance of any other agreement or condition
relating to any such Cross-Default Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, with the giving of notice if required, such
Cross-Default Indebtedness to become due and payable prior to its stated
maturity; or
(g) (i) The Borrower or any Subsidiary shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or
the Borrower or any Subsidiary shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the Borrower or any
Subsidiary any case,
-47-
proceeding or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against the Borrower or any
Subsidiary any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) the Borrower or
any Subsidiary shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) the Borrower or any Subsidiary shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or
(h) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Single Employer Plan, (ii) any "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise on
the assets of the Borrower or any Commonly Controlled Entity in favor of the
PBGC or a Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or institution of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Banks, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or exist in
regard to a Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(i) Any other event shall have occurred which could
reasonably be expected to have a Material Adverse Effect.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (g) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement, the Notes and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall automatically and immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Banks, the
Agent may, or upon the written request of the Required Banks, the Agent shall,
by notice to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Banks, the Agent may, or upon the written request of the
Required Banks, the Agent shall, by notice of default to the Borrower, declare
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement, the Notes and the other Loan Documents (including,
-48-
without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to
the preceding paragraph, the Borrower shall at such time deposit in a cash
collateral account opened by the Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. The Borrower hereby
grants to the Agent, for the benefit of the Issuing Bank, the L/C Participants
and the Banks and the Agent, a security interest in such cash collateral to
secure all obligations of the Borrower under this Agreement and the other Loan
Documents. Amounts held in such cash collateral account shall be applied by the
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay other obligations of
the Borrower hereunder and under the Notes and the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations
of the Borrower hereunder and under the Notes and the other Loan Documents
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrower. The Borrower shall execute and
deliver to the Agent, for the account of the Issuing Bank, the L/C
Participants, the Banks and the Agent, such further documents and instruments
as the Agent may request to evidence the creation and perfection of the within
security interest in such cash collateral account.
Except as expressly provided above in this Section, presentment, demand,
protest and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and
-----------
appoints Wilmington Trust Company as the Agent of such Bank under this
Agreement. Each such Bank irrevocably authorizes the Agent, as the agent for
such Bank, to take such action on its behalf under the provisions of this
Agreement and to exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Agent. The Agent agrees to act as the
Agent on behalf of the Banks to the extent provided in this Agreement.
8.2 Delegation of Duties. The Agent may execute any of its duties
--------------------
under this Agreement by or through agents or attorneys-in-fact and shall be
entitled to engage and pay for the advice and services of counsel concerning
all matters pertaining to such duties. The Agent shall not be responsible to
the Banks for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
-49-
8.3 Exculpatory Provisions. Neither the Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (a) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement or the other Loan
Documents (except for its or such Person's own gross negligence or willful
misconduct) or (b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower or any
officer thereof contained in this Agreement, any other Loan Document or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, the Notes or the other Loan
Documents or for any failure of the Borrower to perform its obligations
hereunder or thereunder. The Agent shall not be under any obligation to any
Bank to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or the other Loan
Documents, or to inspect the properties, books or records of the Borrower or
any Subsidiary.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and
-----------------
shall be fully protected in relying, upon any Note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or any Subsidiary),
independent accountants and other experts selected by the Agent. The agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent. The Agent shall be fully justified in failing
or refusing to take any action under this Agreement unless it shall first
receive such advice or concurrence of the Required Banks as they deem
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement, the Notes and the other Loan Documents in accordance with a request
of the Required Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks and all future holders of
the Notes.
8.5 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Bank or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give notice thereof to the Banks. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Banks; provided, that unless and until the
--------
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Banks.
-50-
8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower, shall be deemed to constitute any
representation or warranty by the Agent to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Bank also represents that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower or its Subsidiaries
which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify the Agent in its
---------------
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement, the other Loan Documents, or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent
under or in connection with any of the foregoing; provided, that no Bank shall
--------
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the Agent's gross negligence or willful
misconduct. The agreements in this Section 8.7 shall survive the payment of the
Notes and all other amounts payable hereunder.
8.8 Agent in its Individual Capacity. The Agent and its Affiliates
--------------------------------
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though it was not the Agent hereunder. With
respect to its Loans made or renewed by it and any Note issued to it and with
respect to any Letter of Credit issued or participated in it by it, the Agent
shall have the same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Agent, and the terms "Bank" and
"Banks" shall include the Agent in its individual capacity.
-51-
8.9 Successor Agent. The Agent may resign as Agent upon 30 days'
---------------
notice to the Banks and the Borrower. If the Agent shall resign as Agent under
this Agreement, then the Required Banks shall appoint from among the Banks a
successor agent for the Banks, which appointment shall be subject to the
approval of the Borrower (which approval shall not be unreasonably withheld)
and of such successor agent. Any rejection by the Borrower of a successor agent
shall specify the reasons for such rejection. Failure of the Borrower to
approve or reject a successor agent within ten days following request for
approval shall be deemed to constitute approval. Upon such appointment and
approval, such successor agent shall succeed to the rights, powers and duties
of the Agent, and the term "Agent" shall mean such successor agent effective
upon its appointment, and the former Agent's rights, powers and duties as Agent
shall be terminated, without any other or further act or deed on the part of
such former Agent or any of the parties to this Agreement or any holders of the
Notes. After any retiring Agent's resignation as Agent, the provisions of this
Section 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
8.10 Beneficiaries. Except as expressly provided herein, the
-------------
provisions of this Section 8 are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights to rely on or enforce any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and does not assume
and shall not be deemed to have assumed any obligation toward or relationship
of agency or trust with or for the Borrower.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Note or any
----------------------
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
subsection. With the written consent of the Required Banks, the Agent and the
Borrower may, from time to time, enter into written amendments, supplements or
modifications hereto and to the Notes and the other Loan Documents for the
purpose of adding any provisions to this Agreement or the Notes or the other
Loan Documents or changing in any manner the rights of the Banks or of the
Borrower hereunder or thereunder or waiving, on such terms and conditions as
the Agent may specify in such instrument, any of the requirements of this
Agreement or the Notes or the other Loan Documents or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no
-------- -------
such amendment, supplement or modification shall directly or indirectly (a)
reduce the amount or extend the maturity of any Note or any installment
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any fee payable to any Bank hereunder, or change the duration or
amount of any Bank's Commitment, in each case without the consent of the Bank
affected thereby or (b) amend, modify or waive any provision of this Section
9.1 or reduce the percentages specified in the definition of Required Banks or
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement, the Notes and the other Loan Documents, in
each case without the written consent of all the Banks, or (c) amend, modify or
waive any provision of Section 8 without the written consent of the then Agent,
(d) amend, modify or waive any provision of Section 2.3 without the written
consent of the then Swing Line Bank or (e) amend, modify or waive any provision
of this Agreement relating to any outstanding Letter of Credit without the
written consent of the Issuing
-52-
Bank. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Banks and shall be binding upon the Borrower, the
Banks the Agent and all future holders of the Notes. In the case of any waiver,
the Borrower and the Bank shall be restored to their former position and rights
hereunder and under the outstanding Note, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.
9.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three days after being
deposited in the mail, postage prepaid, or the next Business Day if sent by
reputable overnight carrier for next day delivery, postage prepaid, or, in the
case of telecopy notice, when sent during normal business hours with electronic
confirmation or otherwise when received, addressed as follows in the case of
the Borrower and the Agent, and as set forth on Schedule I in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto and any future holders of the Notes:
The Borrower: Dover Downs Gaming & Entertainment, Inc.
0000 X. xxXxxx Xxxxxxx
Xxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
with a copy to: Dover Downs Entertainment, Inc.
15th Floor
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esquire
Telecopy: (000) 000-0000
The Agent, Wilmington Trust Company
the Swing Line 000 Xxxxx Xxxxx Xxxxxx
Bank or the Issuing Xxxxx, XX 00000
Bank: Attention: Xxxxxxx X. Xxxx,
Commercial Banking Department
Telecopy: (000) 000-0000
with a copy to: Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Commercial Banking Department
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provided that any notice, request or demand to or upon the Agent, Banks, the
--------
Swing Line Bank or the Issuing Bank pursuant to Sections 2.2, 2.3, 2.4, 2.5,
2.6, 2.10, 2.11 or 2.18 shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of any Bank, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
9.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Notes and the other Loan Documents.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
-----------------------------
or reimburse the Agent for all of its out-of-pocket costs and expenses incurred
in connection with the development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement, the Notes, the other
Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements
of counsel to the Agent, (b) to pay or reimburse each Bank and the Agent for
all of their costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents, the
Letters of Credit and any such other documents, including, without limitation,
reasonable fees and disbursements of counsel to the Agent and to the several
Banks, and (c) to pay, indemnify, and hold each Bank and the Agent harmless
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes, the
other Loan Documents, and any such other documents, and (d) to pay, indemnify,
and hold each Bank and the Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, and the performance and
administration (other than the costs and expenses of administration of each
Bank other than the Agent), of this Agreement, the Notes, the other Loan
Documents, the Letters of Credit and any such other documents (all the
foregoing, collectively, the "indemnified liabilities"), provided, that the
--------
Borrower shall have no obligation hereunder to the Agent or any Bank with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of the Agent or any such Bank. The agreements in this subsection
shall survive repayment of the Notes and all other amounts payable hereunder.
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9.6 Successors and Assigns.
----------------------
(a) Except as otherwise provided in Section 9.8(b), whenever in
this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party, and all
covenants, promises and agreements by or on behalf of the Borrower, the Agent
or the Banks that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns. The Borrower may not assign
or transfer any of its rights or obligations under this Agreement or the other
Loan Documents without the prior written consent of each Bank.
(b) Each Bank may, in accordance with applicable law, sell all
or a portion of its interests, rights and obligations under this Agreement and
the other Loan Documents (including all or a portion of its Commitment or, if
an Event of Default has occurred, the Swing Line Commitment, and the Loans at
the time owing to it and the Notes held by it); provided, however, that (i)
-------- -------
each such assignment shall be to a Bank or Affiliate thereof, or, with the
consents of the Agent and the Borrower (which consents shall not be
unreasonably withheld) to one or more banks or other financial institutions,
(ii) so long as the Commitments are in effect, the amount of each such
assignment (determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Agent) shall not be less than
$5,000,000 (or, if lower, the lesser of (x) the full amount of such Bank's
Commitments and (y) such amount as the Borrower and the Agent shall agree in
their sole discretion), (iii) the parties to each such assignment shall execute
and deliver to the Agent an Assignment and Acceptance, together with the Note
or Notes subject to such assignment and a processing and recordation fee of
$2,000, (iv) in the case of the assignment of the Swing Line Commitment, may
only be made to a Bank which holds a Commitment hereunder and must be of the
entire Swing Line Commitment and (v) each such assignment of Loans and all or
any portion of a Bank's Commitment shall be of a constant, and not a varying,
percentage of the assigning Bank's Commitment and Revolving Credit Loans then
outstanding. Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.6, 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 otherwise agreed by the Agent), (A) 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 Bank
under this Agreement and (B) the assigning Bank 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 Bank's rights
and obligations under this Agreement and the other Loan Documents, such Bank
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.12, 2.13, 2.14, 2.15 and 9.5 (to the extent that such
Bank's entitlement to such benefits arose out of such Bank's position as a Bank
prior to the applicable assignment), as well as to any Commitment Fees accrued
for its account and not yet paid). Such Assignment and Acceptance shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such assignee Bank and the resulting amounts and
percentages held by the Banks arising from the purchase by such assignee Bank
of all or a portion of the rights and obligations of such assigning Bank under
this Agreement, the Notes and the other Loan Documents. Notwithstanding any
provision of this Section 9.6, the
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consent of the Borrower shall not be required for any assignment which occurs
at any time when an Event of Default shall have occurred and be continuing.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Bank thereunder and the assignee thereunder shall be
deemed to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Bank warrants that it is the legal and beneficial
owner of the interest being assigned thereby, free and clear of any adverse
claim, and that its Commitment and/or Commitments and/or Swing Line Commitment,
as the case may be, and the outstanding balances of its Loans, in each case
without giving effect to assignments thereof which have not become effective,
are as set forth in such Assignment and Acceptance, (ii) except as set forth in
(i) above, such assigning Bank makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the other Loan Documents, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Loan Documents, or any other instrument or
document furnished pursuant hereto or thereto, or the financial condition of
the Borrower or any Subsidiary or the performance or observance by the Borrower
or any Subsidiary of any of their obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
Assignment and Acceptance; (iv) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.1 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (v) such assignee will
independently and without reliance upon the Agent, such assigning Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (vi) such
assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which
by the terms of this Agreement and the other Loan Documents are required to be
performed by it as a Bank.
(d) The Agent shall maintain at its offices a copy of each
Assignment and Acceptance and the names and addresses of the Banks, and the
Commitment and/or Swing Line Commitment of, and principal amount of the Loans
owing to, each Bank pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
--------
manifest error and the Borrower, the Agent and the Banks may treat each person
whose name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower and any Bank, at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Bank and an assignee together with the Note
or Notes subject to such assignment, the processing and recordation fee
referred to in paragraph (b) above, the Agent
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shall (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Banks. Within five Business Days after receipt of notice, the Borrower, at its
own expense, shall execute and deliver to the Agent, in exchange for the
surrendered original Note(s), (x) a new Revolving Credit Note to the order of
such assignee in an amount equal to the portion of the Commitment assumed by it
pursuant to such Assignment and Acceptance and, if applicable, a new Swing Line
Note to the order of such assignee in an amount equal to the Swing Line
Commitment and, (y) if the assigning Bank has retained a Commitment, a new
Revolving Credit Note to the order of such assigning Bank in a principal amount
equal to the applicable Commitment retained by it. Such new Notes shall be
dated the date of the surrendered Notes which they replace and shall otherwise
be in substantially the form of Exhibit B-1 or Exhibit B-2 hereto, as
----------- -----------
appropriate. Canceled Notes shall be returned to the Borrower.
(f) Each Bank may without the consent of the Borrower or
the Agent sell participations to one or more banks or other entities (each a
"Participant") in all or a portion of its rights and obligations under this
-----------
Agreement (including all or a portion of its Commitment or Swing Line
Commitment and the Loans owing to it and the Notes held by it); provided,
--------
however, that (i) such Bank's obligations under this Agreement shall remain
-------
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain
the holder of any such Note for all purposes under this Agreement and the other
Loan Documents, (iv) the Borrower, the Banks and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement and the other Loan Documents, (v) in any
proceeding under the Bankruptcy Code the Bank shall be, to the extent permitted
by law, the sole representative with respect to the obligations held in the
name of such Bank, whether for its own account or for the account of any
Participant and (vi) such Bank shall retain the sole right to approve, without
the consent of any Participant, any amendment, modification or waiver of any
provision of this Agreement or the Notes held by such Bank or any other Loan
Document, other than any such amendment, modification or waiver with respect to
any Loan or Commitment in which such Participant has an interest that forgives
principal, interest or fees or reduces the interest rate or fees payable with
respect to any such Loan or Commitment, or postpones any date fixed for any
regularly scheduled payment of principal of, or interest or fees on, any such
Loan, or releases any guarantor of such Loan or releases all or substantially
all of the collateral, if any, securing any such Loan.
(g) The Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.12, 2.13, 2.14, 2.15, 2.18 and 9.5 with
respect to its participation in the Commitments and the Loans and Letters of
Credit outstanding from time to time; provided, that no Participant shall be
--------
entitled to receive any greater amount pursuant to such Sections than the
assigning Bank would have been entitled to receive in respect of the amount of
the participation transferred by such assigning Bank to such Participant had no
such transfer occurred.
(h) If any Participant of a Bank is organized under the
laws of any jurisdiction other than the United States or any state thereof, the
assigning Bank, concurrently with the sale of a participating interest to such
Participant, shall cause such Participant (i) to represent to the assigning
Bank (for the benefit of the assigning Bank, the other Banks, the Agent
-57-
and the Borrower) that under applicable law and treaties no taxes will be
required to be withheld by the Agent, the Borrower or the assigning Bank with
respect to any payments to be made to such Participant in respect of its
participation in the Loans and (ii) to agree (for the benefit of the assigning
Bank, the other Banks, the Agent and the Borrower) that it will deliver the tax
forms and other documents required to be delivered pursuant to Section 2.14(b)
and comply from time to time with all applicable U.S. laws and regulations with
respect to withholding tax exemptions.
(i) Any Bank may at any time assign all or any portion of
its rights under this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release a Bank from any of its
--------
obligations hereunder.
9.7 Disclosure of Information. Unless otherwise consented to by the
-------------------------
Borrower in writing, each of the Banks and the Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower pursuant to this
Agreement; provided, that nothing herein shall limit the disclosure of any such
--------
information (a) to the extent required by statute, rule, regulation or judicial
process, (b) to counsel for any Bank or the Agent, (c) to bank examiners,
auditors or accountants, (d) to the Agent or any other Bank, (e) in connection
with any litigation to which any one or more of the Banks or the Agent is a
party involving the Borrower or any Subsidiary or its or their properties or in
any way relating to this Agreement or any other Loan Document or any Loans or
Letters of Credit or other obligations of the Borrower to the Agent or any Bank
and (f) to any Participant or assignee Bank (or prospective Participant or
assignee Bank) so long as such Participant or assignee Bank (or prospective
Participant or assignee Bank) agrees to comply with the requirements of this
Section. In the event of any disclosure pursuant to clauses (a) or (e) above,
the Agent or Bank making such disclosure, as the case may be, shall use its
reasonable best efforts to notify the Borrower prior to making such disclosure,
and shall cooperate with the Borrower, at the Borrower's expense, in obtaining
a protective order if the Borrower so chooses.
9.8 Adjustments; Set-off.
--------------------
(a) If any Bank (a "benefitted Bank") shall at any time
receive any payment of all or part of its Loans or the Reimbursement Obligation
owing to it, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7.1(g), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Bank, if any, in respect of such other Bank's Loans or the Reimbursement
Obligation owing to it, or interest thereon, such benefitted Bank shall
purchase for cash from the other Banks such portion of each such other Bank's
Loans or the Reimbursement Obligation owing to it, or shall provide such other
Banks with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Bank to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Banks;
provided, however, that if all or any portion of such excess payment or
-------- -------
benefits is thereafter recovered from such benefitted Bank, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
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such recovery, but without interest. The Borrower agrees that each Bank so
purchasing a portion of another Bank's Loans or Reimbursement Obligations may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Bank were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Banks
provided by law, upon the occurrence of an Event of Default and at any time
during the existence of an Event of Default, each of the Banks shall have the
right, without prior notice to the Borrower, any such notice being expressly
waived by the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by the Borrower hereunder or under the Notes
(whether at the stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Bank to or for the credit or the account of the Borrower. Each of
the Bank agrees promptly to notify the Borrower after any such set-off and
application made by such Bank, provided, that the failure to give such notice
--------
shall not affect the validity of such set-off and application.
9.9 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and each of the Banks.
9.10 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 Integration. This Agreement represents the agreement of the
-----------
Borrower, the Agent and the Banks with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Agent or any Bank relative to subject matter hereof not expressly set forth or
referred to herein or in the Notes or the other Loan Documents.
9.12 Governing Law. This Agreement, the Notes and the other Loan
-------------
Documents and the rights and obligations of the parties under this Agreement,
the Note and the other Loan Documents shall be governed by, and construed and
interpreted in accordance with, the law of the State of Delaware.
9.13 Submission To Jurisdiction; Waivers. The Borrower hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement, the Notes or the other Loan
Documents, or for recognition and
-59-
enforcement of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of Delaware, the courts of the United
States of America for the District of Delaware, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at the address set forth in Section 9.2 or at such other address of
which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or proceeding
referred to in this subsection any special, exemplary or punitive or
consequential damages.
9.14 Acknowledgements. The Borrower hereby acknowledges that:
----------------
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement, the Notes and the other Loan
Documents;
(b) neither the Agent nor any Bank has any fiduciary
relationship to the Borrower, and the relationship between the Agent and the
Banks, on the one hand, and the Borrower, on the other hand, is solely that of
debtor and creditor; and
(c) no joint venture exists among the Banks or among the
Borrower and the Banks.
9.15 WAIVERS OF JURY TRIAL. EACH OF THE BORROWER, THE AGENT AND THE
---------------------
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS AND FOR ANY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
DOVER DOWNS GAMING &
ENTERTAINMENT, INC.
By: /s/ Xxxxx XxXxxxx
---------------------------------------
Name: Xxxxx XxXxxxx
Title: President
WILMINGTON TRUST COMPANY, as Agent
and as a Bank
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
PNC BANK, DELAWARE
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Vice President
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