Exhibit 10.13
[Draft: (New York) June 30, 1999]
================================================================================
CREDIT AGREEMENT
among
HCI DIRECT, INC.
VARIOUS LENDING INSTITUTIONS,
BANKERS TRUST COMPANY,
AS ADMINISTRATIVE AGENT
and
FIRST UNION,
AS DOCUMENTATION AGENT
____________________________________
Dated as of July __, 1999
____________________________________
[$135,000,000]
================================================================================
CREDIT AGREEMENT, dated as of July __, 1999, among HCI DIRECT, INC.
(the "Borrower"), a Delaware corporation, the lending institutions listed from
time to time on Annex I hereto (each, a "Lender" and, collectively, the
"Lenders"), BANKERS TRUST COMPANY, as Administrative Agent (the "Administrative
Agent") and FIRST UNION, as Documentation Agent (the "Documentation Agent").
Unless otherwise defined herein, all capitalized terms used herein and defined
in Section 10 are used herein as so defined.
W I T N E S S E T H:
-------------------
WHEREAS, the Borrower and the Lenders desire to enter into this
Agreement to provide for the credit facilities described herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
--------------------------
1.01 Commitment. Subject to and upon the terms and conditions herein
----------
set forth, each Lender severally agrees to make a loan or loans (each, a "Loan"
and, collectively, the "Loans") to the Borrower, which Loans shall be drawn, to
the extent such Lender has a commitment under such Facility, under the Term
Facility and the Revolving Facility, as set forth below:
(a) Loans under the Term Facility (each, a "Term Loan" and,
collectively, the "Term Loans") (i) shall be made pursuant to a single
drawing on the Initial Borrowing Date, (ii) may be incurred and maintained
as, and/or converted into, Base Rate Loans or Eurodollar Loans provided
that all Term Loans outstanding as part of the same Borrowing shall, unless
specifically provided herein, consist of Term Loans of the same Type and
(iii) shall not exceed in aggregate principal amount for any TF Lender at
the time of incurrence thereof the Term Commitment of such Lender in effect
on such date. Once repaid, Term Loans borrowed hereunder may not be
reborrowed.
(b) Loans under the Revolving Facility (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") (i) shall be made at any time and from
time to time on and after the Initial Borrowing Date and prior to the
Revolving Maturity Date, (ii) except as hereinafter provided, may, at the
option of the Borrower, be incurred and maintained as, and/or converted
into, Base Rate Loans or Eurodollar Loans, provided that all Revolving
Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same Type,
(iii) may be repaid and reborrowed in accordance with the provisions
hereof, (iv) shall not exceed for all RC Lenders at any time outstanding
that aggregate principal amount which, when combined with the aggregate
principal amount of all Swingline Loans then outstanding, the Borrowing
Base at such time and (v) shall not exceed for any RC Lender at any time
outstanding that aggregate principal amount which, when combined with the
aggregate outstanding principal amount of all other Revolving Loans of such
Lender and such Lender's Adjusted RC Percentage of the sum of (x) the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time and (y) the outstanding principal amount of
Swingline Loans (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time, equals (1) if such RC Lender
is a Non-Defaulting Lender, the Adjusted Revolving Commitment of such RC
Lender at such time and (2) if such RC Lender is a Defaulting Lender, the
Revolving Commitment of such RC Lender at such time.
(c) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to
time after the Initial Borrowing Date and prior to the Swingline Expiry
Date, a loan or loans to the Borrower (each, a "Swingline Loan", and,
collectively, the "Swingline Loans"), which Swingline Loans (i) shall be
made and maintained as Base Rate Loans, (ii) may be repaid and reborrowed
in accordance with the provisions hereof, (iii) shall not exceed in
aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting
Lenders then outstanding and the Letter of Credit Outstandings (exclusive
of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time, an amount equal to the Adjusted Total
Revolving Commitment then in effect (after giving effect to any reductions
to the Adjusted Total Revolving Commitment on such date), (iv) shall not
exceed in aggregate principal amount at any time outstanding, when combined
with the aggregate principal amount of all Revolving Loans then
outstanding, the Borrowing Base at such time and (v) shall not exceed in
aggregate principal amount at any time outstanding the Maximum Swingline
Amount. BTCo will not make a Swingline Loan after it has received written
notice from the Required Lenders that one or more of the applicable
conditions to Credit Events specified in Section 5.02 are not then
satisfied.
(d) On any Business Day, BTCo may, in its sole discretion, give
notice to the RC Lenders that its outstanding Swingline Loans shall be
funded with a Borrowing of Revolving Loans (provided that each such notice
shall be deemed to have been automatically given upon the occurrence of an
Event of Default under Section 9.05 or upon the exercise of any of the
remedies provided in the last paragraph of Section 9), in which case a
Borrowing of Revolving Loans constituting Base Rate Loans (each such
Borrowing, a "Mandatory Borrowing") shall be made on the immediately
succeeding Business Day by all RC Lenders pro rata based on each RC
--- ----
Lender's Adjusted RC Percentage, and the proceeds thereof shall be applied
directly to repay BTCo for such outstanding Swingline Loans. Each RC
Lender hereby irrevocably agrees to make Base Rate Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified in
writing by BTCo notwithstanding (i) that the amount of the Mandatory
Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) whether any conditions specified in Section 5.02
are then satisfied, (iii) whether a Default or an Event of Default has
occurred and is continuing, (iv) the date of such Mandatory Borrowing and
(v) any reduction in the Total Revolving Commitment or
-3-
the Adjusted Total Revolving Commitment or the Borrowing Base after any
such Swingline Loans were made. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Borrower), each RC
Lender (other than BTCo) hereby agrees that it shall forthwith purchase
from BTCo (without recourse or warranty) such assignment of the outstanding
Swingline Loans as shall be necessary to cause the RC Lenders to share in
such Swingline Loans ratably based upon their respective Adjusted RC
Percentages, provided that all interest payable on the Swingline Loans
shall be for the account of BTCo until the date the respective assignment
is purchased and, to the extent attributable to the purchased assignment,
shall be payable to the RC Lender purchasing same from and after such date
of purchase.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
-------------------------------
of each Borrowing under a Facility shall not be less than the Minimum Borrowing
Amount for such Facility. The aggregate principal amount of each Borrowing of
Swingline Loans shall not be less than $100,000, and, if greater, shall be in an
integral multiple of $50,000. More than one Borrowing may be incurred on any
day, provided that at no time shall there be outstanding more than seven
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
-------------------
incur Loans under any Facility (excluding Borrowings of Swingline Loans and
Mandatory Borrowings), it shall give the Administrative Agent at its Notice
Office, prior to 11:00 A.M. (New York time), at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing of Eurodollar Loans and at least one Business Day's prior written
notice (or telephonic notice promptly confirmed in writing) of each Borrowing of
Base Rate Loans to be made hereunder. Each such notice (each, a "Notice of
Borrowing") shall be in the form of Exhibit A and shall be irrevocable and shall
specify (i) the Facility pursuant to which such Borrowing is being made, (ii)
the aggregate principal amount of the Loans to be made pursuant to such
Borrowing, (iii) the date of Borrowing (which shall be a Business Day) and (iv)
whether the respective Borrowing shall consist of Base Rate Loans or (to the
extent permitted) Eurodollar Loans and, if Eurodollar Loans, the Interest Period
to be initially applicable thereto. The Administrative Agent shall promptly
give each Lender written notice (or telephonic notice promptly confirmed in
writing) of each proposed Borrowing, of such Lender's proportionate share
thereof and of the other matters covered by the Notice of Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give BTCo, prior to 11:00 A.M. (New York
time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Loan to be
made hereunder. Each such notice shall be irrevocable and shall specify in each
case (x) the date of such Borrowing (which shall be a Business Day) and (y) the
aggregate principal amount of the Swingline Loan to be made pursuant to such
Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline
-4-
Loan, to the making of Mandatory Borrowings as set forth in such Section
1.01(d).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent, BTCo (in the case of a Borrowing of Swingline Loans) or
the Letter of Credit Issuer (in the case of the issuance of Letters of Credit),
as the case may be, may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by the
Administrative Agent, BTCo or the Letter of Credit Issuer in good faith to be
from an Authorized Officer of the Borrower. In each such case, the Borrower
hereby waives the right to dispute the Administrative Agent's, BTCo's or the
Letter of Credit Issuer's record of the terms of such telephonic notice.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
---------------------
time) on the date specified in each Notice of Borrowing or each notice described
in Section 1.03(b)(i) or (ii), each Lender with a Commitment under the
respective Facility will make available its pro rata share of each Borrowing
--- ----
requested to be made on such date (or in the case of Swingline Loans, BTCo shall
make available the full amount thereof) in the manner provided below. All such
amounts shall be made available to the Administrative Agent in U.S. dollars and
immediately available funds at the Payment Office and the Administrative Agent
promptly will make available to the Borrower by depositing to its account at the
Payment Office the aggregate of the amounts so made available in the type of
funds received. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent its portion of the Borrowing or Borrowings
to be made on such date, the Administrative Agent may assume that such Lender
has made such amount available to the Administrative Agent on such date of
Borrowing, and the Administrative Agent, in reliance upon such assumption, may
(in its sole discretion and without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Lender and the
Administrative Agent has made available same to the Borrower, the Administrative
Agent shall be entitled to recover such corresponding amount from such Lender.
If such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrower, and the Borrower shall immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Lender or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (x) if paid by such Lender,
the overnight Federal Funds Effective Rate or (y) if paid by the Borrower, the
then applicable rate of interest, calculated in accordance with Section 1.08,
for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
1.05 Register. (a) The Borrower's obligation to pay the principal
--------
of, and interest
-5-
on, the Loans made to it by each Lender shall be set forth in the Register
maintained by the Administrative Agent pursuant to Section 12.16 and, if
requested by any Lender, shall be evidenced by a promissory note (each a "Note"
and collectively, the "Notes") (i) if Term Loans, substantially in the form of
Exhibit B-1 with blanks appropriately completed in conformity herewith, (ii) if
Revolving Loans, substantially in the form of Exhibit B-2 with blanks
appropriately completed in conformity herewith and (iii) if Swingline Loans, by
a promissory note substantially in the form of Exhibit B-3, with blanks
appropriately completed in conformity herewith.
(b) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes (if any), endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to convert on
-----------
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans owing (other
than Swingline Loans, which at all times shall be maintained as Base Rate Loans)
pursuant to a single Facility into a Borrowing or Borrowings pursuant to such
Facility of another Type of Loan, provided that (i) except as otherwise provided
in Section 1.10(b), Eurodollar Loans may be converted into Base Rate Loans only
on the last day of an Interest Period applicable thereto and no partial
conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding
principal amount of the Eurodollar Loans made pursuant to such Borrowing to less
than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may
only be converted into Eurodollar Loans (x) if no Default or Event of Default is
in existence on the date of the conversion and (y) if prior to the Syndication
Date, on the first day of a PSD Interest Period and (iii) Borrowings of
Eurodollar Loans resulting from this Section 1.06 shall be limited in number as
provided in Section 1.02. Each such conversion shall be effected by the Borrower
giving the Administrative Agent at its Notice Office, prior to 10:00 A.M. (New
York time), at least three Business Days' (or two Business Days', in the case of
a conversion into Base Rate Loans) prior written notice (or telephonic notice
promptly confirmed in writing) (each, a "Notice of Conversion") specifying the
Loans to be so converted, the Type of Loans to be converted into and, if to be
converted into a Borrowing of Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Administrative Agent shall give each Lender
prompt notice of any such proposed conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Loans under this Agreement (other than
-------------------
Swingline Loans) shall be made by the Lenders pro rata on the basis of their
--- ----
Term Commitments or Revolving Commitments, as the case may be. It is understood
that no Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
--------
Loan shall bear
-6-
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) All overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall bear interest at a rate per annum equal to the Base Rate in
effect from time to time plus the sum of (i) 2% and (ii) the Applicable Base
Rate Margin, provided that no Loan shall bear interest after maturity (whether
by acceleration or otherwise) at a rate per annum less than 2% plus the rate of
interest applicable thereto at maturity.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December, (ii) in respect of
each Eurodollar Loan, on the last day of each Interest Period applicable thereto
and, in the case of an Interest Period in excess of three months, on each date
occurring at three month intervals after the first day of such Interest Period
and (iii) in respect of each Loan, on any prepayment or conversion (other than
the prepayment or conversion of any Revolving Loan that is a Base Rate Loan) (on
the amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Lenders thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a Notice
----------------
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 10:00 A.M. (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three or six month,
or if available to all RC Lenders or TF Lenders, as the case may be, twelve
month period. Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of Eurodollar
Loans shall commence on the date of such Borrowing (including the date of
any conversion from a
-7-
Borrowing of Base Rate Loans) and each Interest Period occurring thereafter
in respect of such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) subject to the foregoing clauses (i) through (iii), inclusive,
only a one month Interest Period shall be available to be selected prior to
the Syndication Date, with all Term Loans constituting Eurodollar Loans
during such period to be outstanding pursuant to a single Borrowing and all
Revolving Loans constituting Eurodollar Loans during such period to be
outstanding pursuant to a single Borrowing, with all such Borrowings to
commence and end on the same day;
(v) no Interest Period with respect to a Borrowing of Revolving Loan
shall extend beyond the Revolving Maturity Date;
(vi) no Interest Period with respect to any Borrowing of Term Loans
may be elected that would extend beyond any date upon which a Scheduled
Repayment is required to be made if, after giving effect to the selection
of such Interest Period, the aggregate principal amount of Term Loans
maintained as Eurodollar Loans with Interest Periods ending after such date
would exceed the aggregate principal amount of Term Loans permitted to be
outstanding after such Scheduled Repayment; and
(vii) no Interest Period may be elected at any time when a violation
of Section 9.01 or an Event of Default is then in existence if the
Administrative Agent or the Required Lenders have determined that such an
election at such time would be disadvantageous to the Lenders.
(b) If upon the expiration of any Interest Period, the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x) in
---------------------------------
the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
-8-
(i) on any date for determining the Eurodollar Rate for any Interest
Period that, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loans (other than any increased cost or reduction in the
amount received or receivable resulting from the imposition of or a change
in the rate of taxes or similar charges) because of (x) any change since
the Effective Date in any applicable law, governmental rule, regulation,
guideline or order (or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline or order) (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate) and/or (y) other circumstances affecting such Lender,
the interbank Eurodollar market or the position of such Lender in such
market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has become unlawful by compliance by such Lender in good faith with
any law, governmental rule, regulation, guideline (or would conflict with
any such governmental rule, regulation, guideline or order not having the
force of law but with which such Lender customarily complies even though
the failure to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the Effective
Date which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within ten Business
Days of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion given by the Borrower
with respect to Eurodollar Loans which have not yet been incurred shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to such Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such increased
costs or reductions in amounts receivable hereunder (a written notice as to the
additional amounts owed to such Lender, showing the basis for the calculation
thereof, submitted to the Borrower by such Lender shall, absent manifest error,
be final and conclusive and binding upon all parties hereto) and (z) in the case
of clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan
-9-
affected pursuant to Section 1.10(a)(iii), the Borrower shall) either (i) if the
affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said
Borrowing by giving the Administrative Agent telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
a Lender pursuant to Section 1.10(a)(ii) or (iii), or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days' notice
to the Administrative Agent, require the affected Lender to convert each such
Eurodollar Loan into a Base Rate Loan, provided that if more than one Lender is
affected at any time, then all affected Lenders must be treated the same
pursuant to this Section 1.10(b).
(c) If any Lender shall have determined that after the Effective
Date, the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender or any corporation controlling such Lender
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender's or such
corporation's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, effectiveness, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy), then from time to time, within 15
days after demand by such Lender (with a copy to the Administrative Agent), the
Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such corporation for such reduction. Each Lender,
upon determining in good faith that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. (a) The Borrower shall compensate each Lender,
------------
upon its written request (which request shall set forth the basis for requesting
such compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds required by
such Lender to fund its Eurodollar Loans but excluding in any event the loss of
anticipated profits) which such Lender may sustain: (i) if for any reason
(other than a default by such Lender or the Administrative Agent) a Borrowing of
Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment, repayment
or conversion of any of its Eurodollar Loans occurs on a date which is not the
last day of an Interest Period applicable thereto; (iii) if any prepayment of
any of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Eurodollar Loans when required by the terms
of this Agreement or (y) an election made pursuant to Section 1.10(b).
-10-
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice required by Section 1.10, 2.06 or 4.04 is given by any
Lender more than 180 days after such Lender obtained, or reasonably should have
obtained, knowledge of the occurrence of the event giving rise to the additional
costs of the type described in such Section, such Lender shall not be entitled
to compensation under Section 1.10, 2.06 or 4.04 for any amounts incurred or
accruing prior to the giving of such notice to the Borrower.
1.12 Change of Lending Office. Each Lender agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.06 or 4.04 with respect to such Lender, it will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
affected by such event, provided that such designation is made on such terms
that such Lender and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such Section. Nothing in this Section 1.12 shall
affect or postpone any of the obligations of the Borrower or the right of any
Lender provided in Section 1.10, 2.06 or 4.04.
1.13 Replacement of Lenders. (x) Upon the occurrence of any event
----------------------
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c),
Section 2.06 or Section 4.04 with respect to any Lender which results in such
Lender charging to the Borrower increased costs in excess of those being
generally charged by the other Lenders, (y) if a Lender becomes a Defaulting
Lender and/or (z) in the case of a refusal by a Lender to consent to a proposed
change, waiver, discharge or termination with respect to this Agreement which
has been approved by the Required Lenders as provided in Section 12.12, the
Borrower shall have the right, if no Default or Event of Default then exists, to
replace such Lender (the "Replaced Lender") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Lender at
the time of such replacement (collectively, the "Replacement Lender") reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Lender shall enter
into one or more Assignment Agreements pursuant to Section 12.04(b) (and with
all fees payable pursuant to said Section 12.04(b) to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Loans of, and in each case participations in Letters
of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the Replaced Lender in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, (B) an amount equal to all Unpaid Drawings that
have been funded by (and not reimbursed to) such Replaced Lender, together with
all then unpaid interest with respect thereto at such time and (C) an amount
equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender
pursuant to Section 3.01 and (y) the Letter of Credit Issuer an amount equal to
such Replaced Lender's RC Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Lender, and (ii) all obligations of the Borrower owing to the
Replaced Lender (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full to such Replaced Lender concurrently with
such replacement. Upon the execution of the respective Assignment and Assumption
Agreements, the payment of amounts
-11-
referred to in clauses (i) and (ii) above, the recordation of the assignment in
the Register as provided in Section 12.16 and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Borrower, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder,
except with respect to indemnification provisions applicable to the Replaced
Lender under this Agreement, which shall survive as to such Replaced Lender.
SECTION 2. Letters of Credit.
-----------------
2.01 Letters of Credit. (a) Subject to and upon the terms and
-----------------
conditions herein set forth, the Borrower may request that a Letter of Credit
Issuer at any time and from time to time on or after the Initial Borrowing Date
and prior to the date which is five Business Days prior to the Revolving
Maturity Date issue, for the account of the Borrower and in support of (x) trade
obligations of the Borrower and/or its Subsidiaries (each such letter of credit
a "Trade Letter of Credit" and, collectively, the "Trade Letters of Credit")
and/or (y) such other obligations of the Borrower that are acceptable to the
Administrative Agent (each such letter of credit, a "Standby Letter of Credit"
and, collectively, the "Standby Letters of Credit" and together with the Trade
Letters of Credit and the Existing Letters of Credit the "Letters of Credit")
and, subject to and upon the terms and conditions herein set forth, such Letter
of Credit Issuer agrees to issue from time to time, irrevocable letters of
credit denominated in U.S. dollars and issued on a sight basis, in such form as
may be approved by such Letter of Credit Issuer and the Administrative Agent.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued, the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, would
exceed either (x) $5,000,000 or (y) when added to the aggregate principal amount
of all Revolving Loans made by Non-Defaulting Lenders and all Swingline Loans
then outstanding, the Adjusted Total Revolving Commitment at such time and (ii)
(x) each Standby Letter of Credit shall have an expiry date occurring not later
than one year after such Letter of Credit's date of issuance, provided that any
such Letter of Credit may be extendable for successive periods of up to 12
months on terms acceptable to the Letter of Credit Issuer and in no event shall
any Standby Letter of Credit have an expiry date occurring later than five
Business Days prior to the Revolving Maturity Date and (y) each Trade Letter of
Credit shall have an expiry date occurring no later than the earlier of (a) 180
days after the issuance thereof or (b) 30 days prior to the Revolving Maturity
Date.
(c) Notwithstanding the foregoing, in the event a Lender Default
exists, the Letter of Credit Issuer shall not be required to issue any Letter of
Credit unless the Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate the Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of the Defaulting
Lender or Lenders, including by cash collateralizing such Defaulting Lender's or
Lenders' Revolving Percentage of the Letter of Credit Outstandings.
(d) Annex III hereto contains a description of each letter of credit
issued under the Existing Credit Agreement that is outstanding on, and that will
continue in effect after, the
-12-
Initial Borrowing Date and that is issued by a Lender (each, an "Existing Letter
of Credit"). Each such Existing Letter of Credit shall (x) constitute a Letter
of Credit issued for all purposes of this Agreement on the Initial Borrowing
Date and (y) continue to have the same expiry date as in effect on the Initial
Borrowing Date, subject to renewal on a basis consistent with renewals permitted
by Section 2.01(b).
2.02 Minimum Stated Amount. The initial Stated Amount of each Letter
---------------------
of Credit shall be not less than $150,000 or such lesser amount acceptable to
the Letter of Credit Issuer.
2.03 Letter of Credit Requests; Notices of Issuance. (a) Whenever
----------------------------------------------
it desires that a Letter of Credit be issued, the Borrower shall give the
Administrative Agent and the Letter of Credit Issuer written notice (including
by way of facsimile transmission) in the form of Exhibit C thereof prior to 1:00
P.M. (New York time) at least three Business Days (or such shorter period as may
be acceptable to the Letter of Credit Issuer) prior to the proposed date of
issuance (which shall be a Business Day) (each, a "Letter of Credit Request"),
which Letter of Credit Request shall include any documents that the Letter of
Credit Issuer customarily requires in connection therewith.
(b) Each Letter of Credit Issuer shall, promptly after each issuance
of a Standby Letter of Credit by it, give the Administrative Agent, each RC
Lender and the Borrower written notice of the issuance of such Letter of Credit,
accompanied by a copy to the Administrative Agent of such Letter of Credit or
Letters of Credit issued by it. Each Letter of Credit Issuer shall provide to
the Administrative Agent a weekly summary describing each Trade Letter of
Credit, if any, issued by such Letter of Credit Issuer and then outstanding.
Based on the foregoing, the Administrative Agent will send to each RC Lender,
upon such Letter of Credit fee payment date, a report setting forth for the
period covered by such fee the daily aggregate Letter of Credit Outstandings
during such period.
2.04 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
--------------------------------------------
hereby agrees to reimburse the Letter of Credit Issuer, by making payment to the
Administrative Agent at the Payment Office, for any payment or disbursement made
by the Letter of Credit Issuer under any Letter of Credit (each such amount so
paid or disbursed until reimbursed, an "Unpaid Drawing") immediately after, and
in any event on the date on which the Borrower is notified by the Letter of
Credit Issuer of such payment or disbursement with interest on the amount so
paid or disbursed by the Letter of Credit Issuer, to the extent not reimbursed
prior to 1:00 P.M. (New York time) on the date of such payment or disbursement,
from and including the date paid or disbursed to but not including the date the
Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall
be the Applicable Base Rate Margin plus the Base Rate as in effect from time to
time (plus an additional 2% per annum if not reimbursed by the third Business
Day after the date of such notice of payment or disbursement), such interest
also to be payable on demand.
(b) The Borrower's obligation under this Section 2.04 to reimburse
the Letter of Credit Issuer with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff,
-13-
counterclaim or defense to payment which the Borrower may have or have had
against the Letter of Credit Issuer, the Administrative Agent or any Lender,
including, without limitation, any defense based upon the failure of any drawing
under a Letter of Credit to conform to the terms of the Letter of Credit or any
non-application or misapplication by the beneficiary of the proceeds of such
drawing; provided, however, that the Borrower shall not be obligated to
reimburse the Letter of Credit Issuer for any wrongful payment made by the
Letter of Credit Issuer under a Letter of Credit as a result of acts or
omissions constituting willful misconduct or gross negligence on the part of the
Letter of Credit Issuer.
2.05 Letter of Credit Participations. (a) Immediately upon the
-------------------------------
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of
Credit Issuer shall be deemed to have sold and transferred to each other RC
Lender, and each such RC Lender (each, a "Participant") shall be deemed
irrevocably and unconditionally to have purchased and received from such Letter
of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Adjusted RC Percentage, in
such Letter of Credit, each substitute letter of credit, each drawing made
thereunder and the obligations of the Borrower under this Agreement with respect
thereto (although the Letter of Credit Fee shall be payable directly to the
Administrative Agent for the account of the RC Lenders as provided in Section
3.01(b) and the Participants shall have no right to receive any portion of any
Facing Fees) and any security therefor or guaranty pertaining thereto. Upon any
change in the Revolving Commitments or Adjusted RC Percentages of the RC Lenders
pursuant to Section 12.04(b) or upon a Lender Default, it is hereby agreed that,
with respect to all outstanding Letters of Credit and Unpaid Drawings, there
shall be an automatic adjustment to the participations pursuant to this Section
2.05 to reflect the new Adjusted RC Percentages of the assigning and assignee RC
Lender or of all RC Lenders, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the
Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be delivered
under such Letter of Credit have been delivered and that they strictly comply on
their face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by the Letter of Credit Issuer under or in connection with
any Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct, shall not create for the Letter of Credit Issuer any
resulting liability.
(c) In the event that the Letter of Credit Issuer makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Letter of Credit Issuer pursuant to Section 2.04(a), the
Letter of Credit Issuer shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Participant of such failure, and
each Participant shall promptly and unconditionally pay to the Administrative
Agent for the account of the Letter of Credit Issuer, the amount of such
Participant's Adjusted RC Percentage of such payment in U.S. dollars and in same
day funds; provided, however, that no Participant shall be obligated to pay to
the Administrative Agent its Adjusted RC Percentage of such unreimbursed amount
for any wrongful payment made by the Letter of Credit Issuer under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or gross
negligence on the part of the Letter of Credit Issuer. If the Administrative
Agent so notifies any
-14-
Participant required to fund an Unpaid Drawing under a Letter of Credit prior to
11:00 A.M. (New York time) on any Business Day, such Participant shall make
available to the Administrative Agent for the account of the Letter of Credit
Issuer such Participant's Adjusted RC Percentage of the amount of such payment
on such Business Day in same day funds. If and to the extent such Participant
shall not have so made its Adjusted RC Percentage of the amount of such Unpaid
Drawing available to the Administrative Agent for the account of the Letter of
Credit Issuer, such Participant agrees to pay to the Administrative Agent for
the account of the Letter of Credit Issuer, forthwith on demand such amount,
together with interest thereon, for each day from such date until the date such
amount is paid to the Administrative Agent for the account of the Letter of
Credit Issuer at the overnight Federal Funds Effective Rate. The failure of any
Participant to make available to the Administrative Agent for the account of the
Letter of Credit Issuer its Adjusted RC Percentage of any Unpaid Drawing under
any Letter of Credit shall not relieve any other Participant of its obligation
hereunder to make available to the Administrative Agent for the account of the
Letter of Credit Issuer its Adjusted RC Percentage of any payment under any
Letter of Credit on the date required, as specified above, but no Participant
shall be responsible for the failure of any other Participant to make available
to the Administrative Agent for the account of the Letter of Credit Issuer such
other Participant's Adjusted RC Percentage of any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Administrative Agent has received for
the account of the Letter of Credit Issuer any payments from the Participants
pursuant to clause (c) above, the Letter of Credit Issuer shall pay to the
Administrative Agent and the Administrative Agent shall promptly pay to each
Participant which has paid its Adjusted RC Percentage thereof, in U.S. dollars
and in same day funds, an amount equal to such Participant's Adjusted RC
Percentage of the principal amount thereof and interest thereon accruing at the
overnight Federal Funds Effective Rate after the purchase of the respective
participations.
(e) The obligations of the Participants to make payments to the
Administrative Agent for the account of the Letter of Credit Issuer with respect
to Letters of Credit shall be irrevocable and not subject to counterclaim, set-
off or other defense or any other qualification or exception whatsoever
(provided that no Participant shall be required to make payments resulting from
the Administrative Agent's gross negligence or willful misconduct) and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, the Letter of Credit Issuer, any Lender or other
Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions
(including any
-15-
underlying transaction between the Borrower and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
(f) To the extent the Letter of Credit Issuer is not indemnified by
the Borrower, the Participants will reimburse and indemnify the Letter of Credit
Issuer, in proportion to their respective "percentages" of the Total Revolving
Commitment, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or disbursements
of whatsoever kind or nature which may be imposed on, asserted against or
incurred by the Letter of Credit Issuer in performing its respective duties in
any way relating to or arising out of its issuance of Letters of Credit;
provided that no Participants shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Letter of Credit Issuer's
gross negligence or willful misconduct.
2.06 Increased Costs. If at any time after the Effective Date, the
---------------
adoption or effectiveness of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central Lender or comparable agency charged with the
interpretation or administration thereof, or compliance by the Letter of Credit
Issuer or any Participant with any request or directive (whether or not having
the force of law) by any such authority, central Lender or comparable agency
shall either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against Letters of Credit issued by the Letter
of Credit Issuer or such Participant's participation therein, or (ii) shall
impose on the Letter of Credit Issuer or any Participant any other conditions
affecting this Agreement, any Letter of Credit or such Participant's
participation therein; and the result of any of the foregoing is to increase the
cost to the Letter of Credit Issuer or such Participant of issuing, maintaining
or participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by the Letter of Credit Issuer or such Participant
hereunder (other than any increased cost or reduction in the amount received or
receivable resulting from the imposition of or a change in the rate of taxes or
similar charges), then, upon demand to the Borrower by the Letter of Credit
Issuer or such Participant (a copy of which notice shall be sent by the Letter
of Credit Issuer or such Participant to the Administrative Agent), the Borrower
shall pay to the Letter of Credit Issuer or such Participant such additional
amount or amounts as will compensate the Letter of Credit Issuer or such
Participant for such increased cost or reduction. A certificate submitted to the
Borrower by the Letter of Credit Issuer or such Participant, as the case may be
(a copy of which certificate shall be sent by the Letter of Credit Issuer or
such Participant to the Administrative Agent), setting forth the basis for the
-16-
determination of such additional amount or amounts necessary to compensate the
Letter of Credit Issuer or such Participant as aforesaid shall be conclusive and
binding on the Borrower absent manifest error, although the failure to deliver
any such certificate shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section 2.06 upon the
subsequent receipt thereof.
SECTION 3. Fees; Commitments.
-----------------
3.01 Fees. (a) The Borrower agrees to pay to the Administrative
----
Agent a commitment commission ("Commitment Commission") for the account of each
Non-Defaulting Lender with a Revolving Commitment for the period from and
including the Initial Borrowing Date to, but not including, the date the Total
Revolving Commitment has been terminated, computed at a rate per annum for each
day equal to Applicable CC Fee on the daily average of such Lender's Unutilized
Revolving Commitment. Such Commitment Commission shall be due and payable in
arrears on the last Business Day of each March, June, September and December and
on the date upon which the Total Revolving Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each RC Lender that is a Non-Defaulting Lender pro rata on the basis
--- ----
of its respective Adjusted RC Percentage, a fee in respect of each Letter of
Credit (the "Letter of Credit Fee") computed at the rate equal to the Applicable
Eurodollar Margin then in effect on the daily Stated Amount of such Letter of
Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December of
each year and on the date upon which the Total Revolving Commitment is
terminated.
(c) The Borrower agrees to pay to each Letter of Credit Issuer a fee
in respect of each Letter of Credit issued by it (the "Facing Fee") computed at
the rate of 1/4 of 1% per annum on the daily Stated Amount of such Letter of
Credit, provided that in no event shall the annual Facing Fee be less than $500
per year per Letter of Credit. Accrued Facing Fees shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December of each year and on the date upon which the Total Revolving Commitment
is terminated.
(d) The Borrower agrees to pay directly to the Letter of Credit
Issuer upon each issuance of, payment under, and/or amendment of, a Letter of
Credit issued by such Letter of Credit Issuer such amount as shall at the time
of such issuance, payment or amendment be the administrative charge which such
Letter of Credit Issuer is customarily charging for issuances of, payments under
or amendments of, letters of credit issued by it.
(e) The Borrower shall pay to the Administrative Agent (x) on the
Restatement Effective Date for its own account and/or for distribution to the
Lenders such fees as heretofore agreed by the Borrower and the Administrative
Agent and (y) for its own account such other fees as agreed to between the
Borrower and the Administrative Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
-17-
3.02 Voluntary Reduction of Commitments. Upon at least three
----------------------------------
Business Days' prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrower shall have the right, without premium or penalty, to terminate or
partially reduce the Total Unutilized Revolving Commitment, provided that (x)
any such termination shall apply to proportionately and permanently reduce the
Revolving Commitment of each Lender, (y) no such reduction shall reduce any Non-
Defaulting Lender's Revolving Commitment to an amount that is less than the sum
of (A) the outstanding Revolving Loans of such Lender plus (B) such Lender's
Adjusted RC Percentage of (i) outstanding Swingline Loans and (ii) Letter of
Credit Outstandings and (z) any partial reduction pursuant to this Section 3.02
shall be in the amount of at least $1,000,000.
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
------------------------------------------
Commitment (and the Total Term Commitment and the Total Revolving Commitment)
shall terminate on September 30, 1999 if the Initial Borrowing Date has not yet
occurred.
(b) The Total Term Commitment shall terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of Term Loans on such
date).
(c) The Total Revolving Commitment (and the Revolving Commitment of
each RC Lender) shall terminate in its entirety on the earlier of (i) the
Revolving Maturity Date and (ii) the date on which any Change of Control occurs.
(d) The Total Revolving Commitment shall be reduced at the time of
any mandatory repayment of Term Loans pursuant to Section 4.02(A)(c), (d), (e),
(f), (g) or (h) if Term Loans were then outstanding, in an amount, if any, by
which the amount of such repayment (determined as if an unlimited amount of Term
Loans were then outstanding) exceeds the aggregate amount of Term Loans then
outstanding.
(e) Each partial reduction of the Total Revolving Commitment
pursuant to this Section 3.03 shall apply proportionately to the Revolving
Commitment of each RC Lender.
SECTION 4. Payments.
--------
4.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay Loans in whole or in part, without premium or penalty, from time to time
on the following terms and conditions: (i) the Borrower shall give the
Administrative Agent at the Payment Office written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay the Loans, whether such
Loans are Term Loans, Revolving Loans or Swingline Loans, the amount of such
prepayment and (in the case of Eurodollar Loans) the specific Borrowing(s)
pursuant to which made, which notice shall be given by the Borrower at least one
Business Day prior to the date of such prepayment with respect to Base Rate
Loans (other than Swingline Loans, with respect to which notice shall be given
by the Borrower on the day of prepayment) and at least two Business Days prior
to the date of such prepayment with respect to Eurodollar Loans, which notice
shall promptly be transmitted by the Administrative Agent to each of the
Lenders; (ii) (x) each partial prepayment of any Borrowing (other than a
Borrowing of Swingline Loans) shall be in an
-18-
aggregate principal amount of at least $1,000,000 and, if greater in an integral
multiple of $100,000 and (y) each partial prepayment of any Borrowing of
Swingline Loans shall be in an aggregate principal amount of at least $100,000
and, if greater, in an integral multiple of $50,000, provided that no partial
prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce the
aggregate principal amount of the Loans outstanding pursuant to such Borrowing
to an amount less than the Minimum Borrowing Amount applicable thereto; (iii) at
the time of any prepayment of Eurodollar Loans pursuant to this Section 4.01 on
any date other than the last day of the Interest Period applicable thereto, the
Borrower shall pay the amounts required pursuant to Section 1.11; (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans, provided, that at the Borrower's election in
--- ----
connection with any prepayment of Revolving Loans pursuant to this Section 4.01,
such prepayment shall not be applied to any Revolving Loans of a Defaulting
Lender; and (v) each prepayment of Term Loans pursuant to this Section 4.01
shall reduce the remaining Scheduled Repayments on a pro rata basis (based upon
--- ----
the then remaining principal amount of each such Scheduled Repayment), provided
that the amount of any such prepayment that is made with the Available Excess
Cash Flow Amount at such time (determined before giving effect to such
prepayment made with such Available Excess Cash Flow Amount) may, at the
Borrower's direction, reduce the then remaining Scheduled Repayments in the
direct order of their maturity.
4.02 Mandatory Prepayments.
---------------------
(A) Requirements:
------------
(a) (i) If on any date (i) the sum of the aggregate outstanding
principal amount of Revolving Loans made by Non-Defaulting Lenders, Swingline
Loans and the Letter of Credit Outstandings, exceeds the Adjusted Total
Revolving Commitment as then in effect or (ii) the aggregate outstanding
principal amount of all Revolving Loans and of all Swingline Loans shall have
exceeded the Borrowing Base at such time for any period of three consecutive
Business Days, the Borrower shall repay on such date the principal of Swingline
Loans, and if no Swingline Loans are or remain outstanding, Revolving Loans of
Non-Defaulting Lenders, in an aggregate amount equal to such excess. If, after
giving effect to the repayment of all outstanding Swingline Loans and Revolving
Loans of Non-Defaulting Lenders, the aggregate amount of Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Commitment then in effect, the
Borrower shall pay to the Administrative Agent an amount in cash and/or Cash
Equivalents equal to such excess (up to the aggregate amount of the Letter of
Credit Outstandings at such time) and the Administrative Agent shall hold such
payment as security for the obligations of the Borrower hereunder pursuant to a
cash collateral agreement to be entered into in form and substance satisfactory
to the Administrative Agent (which shall permit certain investments in Cash
Equivalents satisfactory to the Administrative Agent, until the proceeds are
applied to the secured obligations).
(ii) If on any date the aggregate outstanding principal amount of the
Revolving Loans made by a Defaulting Lender exceeds the Revolving Commitment of
such Defaulting Lender, the Borrower shall repay principal of Revolving Loans of
such Defaulting Lender in an amount equal to such excess.
-19-
(b) On each date set forth below, the Borrower shall be required to
repay the principal amount of Term Loans set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(B),
a "Scheduled Repayment"):
Date Amount
---- ------
December 31, 1999 $2,500,000
March 31, 2000 2,250,000
June 30, 2000 2,250,000
September 30, 2000 2,250,000
December 31, 2000 2,250,000
March 31, 2001 3,750,000
June 30, 2001 3,750,000
September 30, 2001 3,750,000
December 31, 2001 3,750,000
March 31, 2002 4,062,500
June 30, 2002 4,062,500
September 30, 2002 4,062,500
December 31, 2002 4,062,500
March 31, 2003 5,312,500
June 30, 2003 5,312,500
September 30, 2003 5,312,500
December 31, 2003 5,312,500
March 31, 2004 6,250,000
June 30, 2004 6,250,000
September 30, 2004 6,250,000
December 31, 2004 6,250,000
March 31, 2005 6,250,000
June 30, 2005 6,250,000
Final Maturity Date 6,250,000
(c) On the Business Day following the date of receipt thereof by the
Borrower and/or any of its Subsidiaries of the Cash Proceeds from any Asset
Sale, an amount equal to 100% of the Net Cash Proceeds from such Asset Sale
shall be applied as a mandatory repayment of principal of the then outstanding
Term Loans, provided that up to an aggregate of [$3,500,000] of Net Cash
Proceeds from Asset Sales shall not be required to be used to so repay Term
Loans to the extent the Borrower elects, as hereinafter provided, to cause such
Net Cash Proceeds to be reinvested in Reinvestment Assets (a "Reinvestment
Election"). The Borrower may exercise its Reinvestment Election (within the
parameters specified in the preceding sentence) with respect to an Asset Sale if
(x) no Default or Event of Default exists and (y) the Borrower delivers a
Reinvestment Notice to the Administrative Agent on the Business Day following
the date of the consummation of the respective Asset Sale, with such
Reinvestment
-20-
Election being effective with respect to the Net Cash Proceeds of such Asset
Sale equal to the Anticipated Reinvestment Amount specified in such Reinvestment
Notice.
(d) On the date of the receipt thereof by the Borrower and/or any of
its Subsidiaries, an amount equal to 100% of the proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith) of
the incurrence of Indebtedness by the Borrower and/or any of its Subsidiaries
(other than Indebtedness permitted by Section 8.04), shall be applied as a
mandatory repayment of principal of the then outstanding Term Loans.
(e) On the date of the receipt thereof by the Borrower, an amount
equal to 100% of the proceeds (net of underwriting discounts and commissions and
other reasonable costs associated therewith) of any sale or issuance of its
equity (other than equity issued to management and other employees of the
Borrower and its Subsidiaries as provided for in Section 8.09(a)(ii)) and 100%
of any amount of cash received by the Borrower in connection with any capital
contributions shall be applied as a mandatory repayment of principal of the then
outstanding Term Loans.
(f) On each date which is 90 days after the last day of each fiscal
year of the Borrower (commencing with the fiscal year ending on December 31,
[1999]), the then Applicable ECF Percentage of Excess Cash Flow (such amount,
the "ECF Prepayment Amount") of the Borrower and its Subsidiaries for the fiscal
year then last ended shall be applied as a mandatory repayment of principal of
the then outstanding Term Loans.
(g) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount, if
any, for such Reinvestment Election shall be applied as a repayment of the
principal amount of the then outstanding Term Loans.
(h) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all other then outstanding Loans shall be
repaid in full on the Final Maturity Date.
(i) On the date on which any Change of Control occurs, the
outstanding principal amount of the Term Loans, if any, shall become due and
payable in full.
(B) Application:
-----------
(a) Each mandatory repayment of Term Loans required to be made
pursuant to Section 4.02(A) (other than pursuant to clause (b) thereof) shall
reduce the next Scheduled Repayment to the extent thereof and then each other
remaining Scheduled Repayments on a pro rata basis (based upon the then
--- ----
remaining principal amount of each such Scheduled Repayment).
(b) With respect to each prepayment of Loans required by Section
4.02, the Borrower may designate the Types of Loans which are to be prepaid and
the specific
-21-
Borrowing(s) under the affected Facility pursuant to which made, provided that
(i) Eurodollar Loans may so be designated for prepayment pursuant to this
Section 4.02 only on the last day of an Interest Period applicable thereto
unless all Eurodollar Loans made pursuant to such Facility with Interest Periods
ending on such date of required prepayment and all Base Rate Loans made pursuant
to such Facility have been paid in full; (ii) if any prepayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding Loans
made pursuant to such Borrowing to an amount less than the Minimum Borrowing
Amount for such Borrowing, such Borrowing shall be immediately converted into
Base Rate Loans; (iii) each prepayment of any Revolving Loans made by Non-
Defaulting Lenders pursuant to a Borrowing shall be applied pro rata among such
--- ----
Revolving Loans; and (iv) each prepayment of any Revolving Loans made by
Defaulting Lenders pursuant to a Borrowing shall be applied pro rata among such
--- ----
Revolving Loans. In the absence of a designation by the Borrower as described in
the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11.
4.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable (based on its pro rata share) account of
--- ----
the Lenders entitled thereto, not later than 1:00 P.M. (New York time) on the
date when due and shall be made in immediately available funds and in lawful
money of the United States of America at the Payment Office, it being understood
that written notice by the Borrower to the Administrative Agent to make a
payment from the funds in the Borrower's account at the Payment Office shall
constitute the making of such payment to the extent of such funds held in such
account. Any payments under this Agreement which are made later than 1:00 P.M.
(New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder,
------------
under any Note or any other Credit Document, will be made without setoff,
counterclaim or other defense. Except as provided for in Section 4.04(b), all
such payments will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein (but excluding, except as provided in the second succeeding sentence,
any tax imposed on or measured by the net income (or any franchise tax) of a
Lender pursuant to the laws of the jurisdiction in which the principal office or
applicable lending office of such Lender is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which the
principal office or applicable lending office of such Lender is located) and all
interest, penalties or similar liabilities with respect thereto (collectively,
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes and such additional amounts as may be necessary so
that every payment of all amounts due hereunder, under any Note or under any
other Credit Document, after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein or in such Note or
in such other Credit Document. If any amounts
-22-
are payable in respect of Taxes pursuant to the preceding sentence, then the
Borrower shall also reimburse each Lender, upon the written request of such
Lender, for taxes imposed on or measured by the net income of such Lender
pursuant to the laws of the jurisdiction in which the principal office or
applicable lending office of such Lender is located or of any political
subdivision or taxing authority of any such jurisdiction and for any Taxes as
such Lender shall determine are payable by, or withheld from, such Lender in
respect of amounts paid to or on behalf of such Lender pursuant to this or the
preceding sentence. The Borrower will furnish to the Administrative Agent within
45 days after the date the payment of any Taxes, or any withholding or deduction
on account thereof, is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower will indemnify
and hold harmless the Administrative Agent and each Lender, and reimburse the
Administrative Agent or such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid or withheld by such Lender.
(b) Each Lender which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for Federal income tax purposes
agrees (i) that it will provide to the Borrower on or prior to the Initial
Borrowing Date two original signed copies of Internal Revenue Service Form 4224
or Form 1001 certifying to such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments to be made under
this Agreement, under any Note and under any other Credit Document and (ii) that
to the extent legally entitled to do so, (x) with respect to a Lender that is an
assignee or transferee of an interest under this Agreement pursuant to Section
12.04 hereof (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), upon the date of such
assignment or transfer to such Lender, and (y) with respect to any Lender which
is not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes (including, without limitation,
any assignee or transferee), from time to time, upon the reasonable request by
the Borrower or the Administrative Agent after the Initial Borrowing Date, such
Lender will provide to each of the Borrower and the Administrative Agent two
original signed copies of Internal Revenue Service Form 4224 or Form 1001 (or
any successor forms and collectively the "Tax Forms") certifying to such
Lender's entitlement to a complete exemption from, or reduction in, United
States withholding tax with respect to payments to be made under this Agreement,
under any Note and under any other Credit Document, or (iii) if the Lender,
assignee or transferee, as the case may be, is not a "bank" within the meaning
of Section 881(c)(3)(A) of the Code and cannot deliver either Tax Form pursuant
to clauses (i) or (ii) above (either initially or upon request, as the case may
be), such Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) agrees to provide two accurate and complete
original signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments of interest to be made under
this Agreement and under any Note. Notwithstanding anything to the contrary
contained in Section 4.04(a), the Borrower shall be entitled, to the extent it
is required to do so by law, to deduct or withhold income or other similar taxes
imposed by the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable hereunder
(without any obligation under Section 4.04(a) to pay the respective Lender such
taxes or any additional amounts with respect thereto) for the account of any
Lender which is not a United
-23-
States person (as such term is defined in Section 7701(a)(30) of the Code) for
United States federal income tax purposes and which has not provided to the
Borrower such forms required to be provided to the Borrower by a Lender pursuant
to the first sentence of this Section 4.04(b), provided that if the Borrower
shall so deduct or withhold any such taxes, it shall provide a statement to the
Administrative Agent and such Lender, setting forth the amount of such taxes so
deducted or withheld, the applicable rate and any other information or
documentation which such Lender may reasonably request for assisting such Lender
in obtaining any allowable credits or deductions for the taxes so deducted or
withheld in the jurisdiction or jurisdictions in which such Lender is subject to
tax. Notwithstanding anything to the contrary contained in the preceding
sentence, the Borrower agrees to indemnify each Lender in the manner set forth
in Section 4.04(a) in respect of any amounts deducted or withheld by it as
described in the previous sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent.
--------------------
5.01 Conditions Precedent to Loans on the Initial Borrowing Date.
-----------------------------------------------------------
The obligation of the Lenders to make Loans, and of Letter of Credit Issuers to
issue Letters of Credit, on the Initial Borrowing Date is subject to the
satisfaction of the following conditions at such time:
(a) Effectiveness. The Effective Date shall have occurred.
-------------
(b) Opinions of Counsel. The Administrative Agent shall have
-------------------
received opinions, addressed to the Administrative Agent, and each of the
Lenders and dated the Initial Borrowing Date, from (i) Skadden, Arps, Slate,
Xxxxxxx & Xxxx LLP, counsel to the Borrower, which opinion shall cover the
matters contained in Exhibit D-1 hereto, (ii) White & Case LLP, special counsel
to the Administrative Agent, which opinion shall cover the matters contained in
Exhibit D-2 hereto and (iii) from such local counsel, if any, satisfactory to
the Administrative Agent as the Administrative Agent may request, which opinions
shall cover the perfection of the security interests granted pursuant to the
Security Documents and such other matters incident to the transactions
contemplated herein as the Administrative Agent may reasonably request and shall
be in form and substance satisfactory to the Administrative Agent.
(c) Corporate Proceedings. (I) The Administrative Agent shall have
---------------------
received from the Borrower a certificate, dated the Initial Borrowing Date,
signed by the President or any Vice-President of the Borrower in the form of
Exhibit E with appropriate insertions and deletions, together with (x) copies of
the certificate of incorporation, the by-laws, or other organizational documents
of each Credit Party and (y) the resolutions, or such other administrative
approval, of each Credit Party referred to in such certificate and all of the
foregoing (including each such certificate of formation, certificate of
incorporation and by-laws) shall be satisfactory to the Administrative Agent and
(z) a statement that all of the applicable conditions set forth in Sections
5.01(h), (l), (m) and (n) and 5.02 exist as of such date.
(II) On the Initial Borrowing Date, all corporate and legal
proceedings and all
-24-
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Documents shall be satisfactory in form and
substance to the Administrative Agent, and the Administrative Agent shall have
received all information and copies of all certificates, documents and papers,
including good standing certificates and any other records of corporate
proceedings and governmental approvals, if any, which the Administrative Agent
may have requested in connection therewith, such documents and papers, where
appropriate, to be certified by proper corporate or governmental authorities.
(d) Adverse Change, etc. From December 31, 1998, nothing shall have
--------------------
occurred (and neither the Lenders nor the Administrative Agent shall have become
aware of any facts or conditions not previously known) which the Administrative
Agent or the Required Lenders shall determine (i) has had, or is reasonably
likely to have, a material adverse effect on the rights or remedies of the
Lenders or the Administrative Agent hereunder or under any other Credit
Document, or on the ability of the Credit Parties taken as a whole to perform
their obligations to them, or (ii) has had, or is reasonably likely to have, a
Material Adverse Effect.
(e) Litigation. There shall be no actions, suits or proceedings
----------
pending or, to the knowledge of any Credit Party, threatened in writing (i) with
respect to this Agreement or any other Credit Document or (ii) which the
Administrative Agent or the Required Lenders shall determine has had, or is
reasonably likely to have, (x) a Material Adverse Effect or (y) a material
adverse effect on the rights or remedies of the Lenders or the Administrative
Agent hereunder or under any other Credit Document or on the ability of the
Credit Parties taken as a whole to perform their obligations under the Credit
Documents.
(f) Approvals. All material necessary governmental and third party
---------
approvals in connection with the Transaction and/or the Credit Documents shall
have been obtained and remain in effect, and all applicable waiting periods
shall have expired or shall have been terminated or waived without any action
being taken by any competent authority which restrains or prevents such
transactions or imposes, in the reasonable judgment of the Administrative Agent,
materially adverse conditions upon the consummation of the Transaction.
(g) Initial Borrowing Base Certificate. On the Initial Borrowing
----------------------------------
Date, the Administrative Agent shall have received a certificate in the form of
Exhibit F hereto (a "Borrowing Base Certificate") executed by the chief
financial officer of the Borrower setting forth the Borrowing Base determined as
of the BB Determination Date in the preceding month.
(h) Existing Credit Agreement. On the Initial Borrowing Date and
-------------------------
concurrently with the initial borrowing hereunder, (A) the Borrower shall have
(i) repaid in full the outstanding principal amount of all Loans under, and as
defined in, the Existing Credit Agreement, (ii) terminated all letters of credit
issued thereunder (other than Existing Letters of Credit) and all Commitments
under and as defined therein, and (iii) paid all accrued but unpaid interest and
fees under the Existing Credit Agreement, whether or not otherwise then due and
payable and (B) the Existing Credit Agreement shall have been terminated and be
of no further force or effect (except as to indemnities contained therein which
survive the termination of the Existing Credit Agreement in accordance with the
terms thereof).
-25-
(i) Subsidiary Guaranty. Each Subsidiary Guarantor shall have duly
-------------------
authorized, executed and delivered a Subsidiary Guaranty in the form of Exhibit
G hereto (as modified, amended or supplemented from time to time in accordance
with the terms hereof and thereof, the "Subsidiary Guaranty"), and the
Subsidiary Guaranty shall be in full force and effect.
(j) Security Documents. (i) Each of the Borrower and the Subsidiary
------------------
Guarantors shall have each duly authorized, executed and delivered a Pledge
Agreement in the form of Exhibits H-1 and H-2, respectively (each as modified,
amended or supplemented from time to time in accordance with the terms thereof
and hereof, a "Pledge Agreement" and, collectively, the "Pledge Agreements"),
and each shall have delivered, or caused to have been delivered, to the
Collateral Agent, as pledgee thereunder, all of the certificates representing
the Pledged Securities referred to therein, endorsed in blank or accompanied by
executed and undated stock powers, and each Pledge Agreement shall be in full
force and effect.
(ii) The Borrower and each Subsidiary Guarantor shall have each duly
authorized, executed and delivered a Security Agreement substantially in the
form of Exhibits I-1 and I-2, respectively (each as modified, supplemented or
amended from time to time in accordance with the terms thereof and hereof, a
"Security Agreement" and collectively, the "Security Agreements"), covering all
of such Credit Party's present and future Security Agreement Collateral, in each
case together with:
(I) executed copies of Financing Statements (Form UCC-1) in
appropriate form for filing under the UCC of each jurisdiction as may be
necessary to perfect the security interests purported to be created by the
Security Agreements;
(II) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of recent date listing all effective
financing statements that name any Credit Party as debtor and that are filed in
the jurisdictions referred to in clause (I), together with copies of such
financing statements (none of which shall cover the Collateral except (x) those
with respect to which appropriate termination statements executed by the secured
lender thereunder have been filed or delivered to the Collateral Agent and (y)
to the extent evidencing Permitted Liens);
(III) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by the Security Agreements or acceptable
arrangements to effect such recordings and filings have been taken; and
(IV) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the security
interests purported to be created by the Security Agreements have been taken or
acceptable arrangements to effect such actions have been taken;
and the Security Agreements shall be in full force and effect.
-26-
(iii) The Collateral Agent shall have received:
(I) fully executed counterparts of deeds of trust, mortgages and
similar documents, in each case in form and substance reasonably satisfactory to
the Collateral Agent (as amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof, each a "Mortgage" and,
collectively, the "Mortgages") with respect to each of the Mortgaged Properties,
and arrangements satisfactory to the Collateral Agent shall be in place to
provide that counterparts of such Mortgages shall be recorded on or promptly
after the Initial Borrowing Date in all places to the extent necessary or
desirable, in the judgment of the Collateral Agent, effectively to create a
valid and enforceable first priority mortgage Lien, subject only to Permitted
Encumbrances, on each such Mortgaged Property in favor of the Collateral Agent
(or such other trustee as may be required or desired under local law) for the
benefit of the Administrative Agent and the Lenders;
(II) mortgagee title insurance policies (or binding commitments to
issue such title insurance policies) issued by title insurers reasonably
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
reasonably satisfactory to the Collateral Agent and assuring the Collateral
Agent that the Mortgages delivered pursuant to clause (I) above are valid and
enforceable first priority mortgage Liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances except Permitted
Encumbrances, and such Mortgage Policies shall be in form and substance
reasonably satisfactory to the Collateral Agent and (A) shall include (to the
extent available in the respective jurisdiction of each Mortgaged Property) an
endorsement for future advances under this Agreement, the Notes and the
Mortgages, and for such other matters that the Collateral Agent in its
discretion may reasonably request, (B) shall not include an exception for
mechanics' liens, and (C) shall provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Collateral Agent in its
discretion may reasonably request; and
[(III) surveys, in form and substance reasonably satisfactory to the
Collateral Agent of each Mortgaged Property, dated a recent date and certified
in a manner acceptable to the Collateral Agent by a licensed professional
surveyor satisfactory to the Collateral Agent.]
(k) Solvency. The Borrower shall have delivered, or shall cause to
--------
be delivered to the Administrative Agent, a solvency letter in the form of
Exhibit J hereto dated the Initial Borrowing Date from the Chief Financial
Officer of the Borrower and acceptable in form and substance to the
Administrative Agent.
(l) IPO. The Borrower shall have consummated an initial public
---
offering of its common stock for gross cash proceeds of at least $160 million.
(m) PIK Preferred Stock. All of the PIK Preferred Stock shall have
-------------------
been redeemed in a manner reasonably satisfactory to the Administrative Agent.
(n) Senior Subordinated Notes. The Borrower shall have successfully
-------------------------
completed a tender offer and consent solicitation (collectively, the "Tender")
with respect to the Senior Subordinated Notes pursuant to which amendments to
the Senior Subordinated Note Indentures
-27-
shall have become effective that substantially eliminate the covenants and
restrictions contained in the Senior Subordinated Note Indenture, all as
contemplated by the Tender (without any waiver of any conditions specified
therein including the requirement that at least 51% of the Senior Subordinated
Notes are tendered), with the Tender to be reasonably satisfactory to the
Administrative Agent, and all Senior Subordinated Notes that have been duly
tendered under the Tender shall have been, or shall on the Initial Borrowing
Date be, redeemed.
(o) Insurance Policies. The Collateral Agent shall have received
------------------
evidence of insurance complying with the requirements of Section 7.03 for the
business and properties of the Borrower and its Subsidiaries, in form and
substance satisfactory to the Administrative Agent and, with respect to all
casualty insurance, naming the Collateral Agent as an additional insured and
loss payee.
(p) Fees. On the Initial Borrowing Date, the Borrower shall have
----
paid to the Administrative Agent and the Lenders all Fees and expenses agreed
upon by such parties to be paid on or prior to such date.
(q) Consent Letter. On the Initial Borrowing Date, the
--------------
Administrative Agent shall have received a letter from CT Corporation System,
presently located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, substantially in the
form of Exhibit K, indicating its consent to its appointment by each Credit
Party as such Credit Party's Administrative Agent to receive service of process
as specified in Section 12.08.
5.02 Conditions Precedent to All Credit Events. The obligation of
-----------------------------------------
each Lender to make Loans (including Loans made on the Initial Borrowing Date)
and the obligation of a Letter of Credit Issuer to issue any Letter of Credit is
subject, at the time of each such Credit Event, to the satisfaction of the
following conditions:
(a) Notice of Borrowing; Letter of Credit Request. The
---------------------------------------------
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.02 with respect to the incurrence of Loans or a Letter
of Credit Request meeting the requirements of Section 2.03 with respect to the
issuance of a Letter of Credit.
(b) No Default; Representations and Warranties. At the time of each
------------------------------------------
Credit Event and also after giving effect thereto, (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties made by
any Credit Party contained herein or in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, except to the extent that such representations and warranties
expressly relate to an earlier date.
The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by the Borrower to the Administrative Agent and each
of the Lenders that all of the applicable conditions specified in Section 5.01
(in the case of the Credit Events occurring on the Restatement Effective Date)
and/or 5.02, as the case may be, exist as of that time. All of the certificates,
legal opinions and other documents and papers referred to in Section 5.01,
unless otherwise specified, shall be delivered to the Administrative Agent at
its
-28-
Notice Office for the account of each of the Lenders and, except for the Notes,
in sufficient counterparts for each of the Lenders and shall be satisfactory in
form and substance to the Administrative Agent.
SECTION 6. Representations, Warranties and Agreements. In order to
------------------------------------------
induce the Lenders to enter into this Agreement and to make the Loans and issue
and/or participate in Letters of Credit provided for herein, the Borrower makes
the following representations and warranties to, and agreements with, the
Lenders, all of which shall survive the execution and delivery of this Agreement
and the making of the Loans (with the making of each Credit Event thereafter
being deemed to constitute a representation and warranty that the matters
specified in this Section 6 are true and correct in all material respects on and
as of the date of each such Credit Event unless such representation and warranty
expressly indicates that it is being made as of any specific date):
6.01 Corporate Status. Each of the Borrower and its Subsidiaries (i)
----------------
is a duly organized and validly existing corporation in good standing under the
laws of the jurisdiction of its organization and has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (ii) has duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified and where the failure to be so qualified would
have a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Credit Documents to which it is a party. Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Person enforceable
in accordance with its terms.
6.03 No Violation. Neither the execution, delivery and performance
------------
by any Credit Party of the Credit Documents to which it is a party nor
compliance with the terms and provisions thereof, nor the consummation of the
transactions contemplated therein (i) will contravene any applicable provision
of any law, statute, rule, regulation, order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or be inconsistent
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to the
Security Documents) result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of the Borrower
or any of its Subsidiaries pursuant to the terms of any indenture, mortgage,
deed of trust, agreement or other instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
certificate of incorporation or by-laws of the Borrower or any of its
Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings pending
----------
or threatened
-29-
with respect to the Borrower or any of its Subsidiaries (i) that are likely to
have a Material Adverse Effect or (ii) that could reasonably be expected to have
a material adverse effect on the rights or remedies of the Lenders or on the
ability of any Credit Party to perform its obligations to them hereunder and
under the other Credit Documents to which it is a party.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of all
-----------------------------------
Term Loans shall be utilized on the Initial Borrowing Date (i) to refinance
Loans under and as defined in the Existing Credit Agreement and (ii) to finance
the Transaction and to pay certain fees and expenses relating thereto.
(b) The proceeds of all Revolving Loans incurred (i) on the Initial
Borrowing Date (which shall not exceed $_______), shall be used for the purposes
specified in Section 6.05(a) and (ii) thereafter, shall be used for the general
corporate and working capital purposes of the Borrower and its Subsidiaries.
(c) The proceeds of all Swingline Loans shall be utilized for the
general corporate and working capital purposes of the Borrower and its
Subsidiaries.
(d) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System and
no part of the proceeds of any Loan will be used to purchase or carry any Margin
Stock in violation of Regulation U or to extend credit for the purpose of
purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. Except for filings and recordings in
----------------------
connection with the Security Documents, SEC filings [and those items listed on
Annex IV,] no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of any Credit Document.
6.07 Investment Company Act. None of the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information (taken as
----------------------------
a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower or any of its Subsidiaries in writing to the Administrative Agent or
any Lender for purposes of or in connection with this Agreement or any
transaction contemplated herein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Person in
-30-
writing to any Lender will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete by
omitting to state any material fact necessary to make such information (taken as
a whole) not misleading at such time in light of the circumstances under which
such information was provided. The projections and pro forma financial
--- -----
information contained in such materials are based on good faith estimates and
assumptions believed by such Persons to be reasonable at the time made, it being
recognized by the Lenders that such projections as to future events are not to
be viewed as facts and that actual results during the period or periods covered
by any such projections may differ from the projected results. There is no fact
known to the Borrower which would have a Material Adverse Effect, which has not
been disclosed herein or in such other documents, certificates and statements
furnished to the Lenders for use in connection with the transactions
contemplated hereby.
6.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Initial Borrowing Date, on a pro forma basis after giving effect to all
--- -----
Indebtedness incurred, and to be incurred, and Liens created, and to be created,
by each Credit Party in connection herewith, (x) the sum of the assets, at a
fair valuation, of the Borrower and its Subsidiaries taken as a whole will
exceed its debts, (y) the Borrower and its Subsidiaries taken as a whole will
not have incurred or intended to, or believe that they will, incur debts beyond
their ability to pay such debts as such debts mature and (z) the Borrower and
its Subsidiaries taken as a whole will not have unreasonably small capital with
which to conduct its business. For purposes of this Section 6.10, "debt" means
any liability on a claim, and "claim" means (i) right to payment whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured; or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b) (i) The consolidated balance sheet of the Borrower at December
31, 1998 and March 27, 1999 and the related consolidated statements of
operations and cash flows of the Borrower for the fiscal year or the three-month
period, as the case may be, ended as of said dates, which, in the case of the
December 31, 1998 statements, have been examined by [Deloitte & Touche LLP,]
independent certified public accountants, who delivered an unqualified opinion
in respect therewith, and (ii) the pro forma consolidated balance sheet of the
--- -----
Borrower as of March 27, 1999, copies of which have heretofore been furnished to
each Lender, present fairly the financial position of such entities at the dates
of said statements and the results for the periods covered thereby (or, in the
case of the pro forma balance sheet, presents a good faith estimate of the
--- -----
consolidated pro forma financial condition of the Borrower at the date thereof)
--- -----
in accordance with GAAP, except to the extent provided in the notes to said
financial statements and, in the case of the March 27, 1999 statements, subject
to normal and recurring year-end audit adjustment. All such financial
statements (other than the aforesaid pro forma balance sheets) have been
--- -----
prepared in accordance with generally accepted accounting principles and
practices consistently applied except to the extent provided in the notes to
said financial statements. Nothing has occurred since December 31, 1998 that
has had or could reasonably be expected to have a Material Adverse Effect.
-31-
(c) Except as reflected in the financial statements and the notes
thereto described in Section 6.10(b), there were as of the Initial Borrowing
Date no liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of a nature (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, would be
material to the Borrower and its Subsidiaries taken as a whole, except as
incurred in the ordinary course of business consistent with past practices
subsequent to December 31, 1998.
6.11 Security Interests. On and after the Initial Borrowing Date,
------------------
each of the Security Documents creates, as security for the Obligations
purported to be secured thereby, a valid and enforceable perfected security
interest in and Lien on all of the Collateral subject thereto, superior to and
prior to the rights of all third Persons and subject to no other Liens (except
(x) that the Security Agreement Collateral may be subject to the security
interests evidenced by Permitted Liens relating thereto and (y) the Mortgaged
Properties may be subject to Permitted Encumbrances relating thereto), in favor
of the Collateral Agent for the benefit of the Lenders. No filings or
recordings are required in order to perfect the security interests created under
any Security Document except for filings or recordings required in connection
with any such Security Document (other than the Pledge Agreement) which shall
have been made upon or prior to (or are the subject of arrangements,
satisfactory to the Administrative Agent, for filing on or promptly after the
date of) the execution and delivery thereof.
6.12 Tax Returns and Payments. Each of the Borrower and each of its
------------------------
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, other than
those not yet delinquent and except for those contested in good faith. The
Borrower and each of its Subsidiaries have paid, or have provided adequate
reserves (in the good faith judgment of the management of the Borrower) for the
payment of, all federal, state and foreign income taxes applicable for all prior
fiscal years and for the current fiscal year to the date hereof.
6.13 Compliance with ERISA. Each Plan is in substantial compliance
---------------------
with ERISA and the Code; no Reportable Event has occurred with respect to a
Plan; no Plan is insolvent or in reorganization; no Plan has an Unfunded Current
Liability; no Plan has an accumulated or waived funding deficiency, has
permitted decreases in its funding standard account or has applied for an
extension of any amortization period within the meaning of Section 412 of the
Code; neither the Borrower, nor any Subsidiary nor any ERISA Affiliate has
incurred any material liability to or on account of a Plan pursuant to Section
409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code or expects to incur any
liability (including any indirect, contingent or secondary liability) under any
of the foregoing Sections with respect to any Plan; no proceedings have been
instituted to terminate or appoint a trustee to administer any Plan; no
condition exists which presents a material risk to the Borrower or any
Subsidiary or any ERISA Affiliate of incurring a liability to or on account of a
Plan pursuant to the foregoing provisions of ERISA and the Code; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Borrower and its
Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans
(as defined in Section 4001(a)(3) of
-32-
ERISA) in the event of a complete withdrawal therefrom, as of the close of the
most recent fiscal year of each such Plan ended prior to the date of the most
recent Credit Event, would not exceed $1,000,000; no lien imposed under the Code
or ERISA on the assets of the Borrower or any Subsidiary or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and the Borrower and its
Subsidiaries do not maintain or contribute to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) which provides benefits to retired
employees (other than as required by Section 601 of ERISA) or any employee
pension benefit plan (as defined in Section 3(2) of ERISA), except to the extent
that all events described in the preceding clauses of this Section 6.13 and then
in existence would not, in the aggregate, have or be likely to have a Material
Adverse Effect. With respect to Plans that are multiemployer plans (within the
meaning of Section 4001(a)(3) of ERISA) the representations and warranties in
this Section 6.13 are made to the best knowledge of the Borrower.
6.14 Subsidiaries. (a) Annex V hereto lists each Subsidiary of the
------------
Borrower (and the direct and indirect ownership interest of the Borrower
therein), in each case existing on the Initial Borrowing Date. The Borrower
will at all times own directly the percentages specified in said Annex V of the
outstanding capital stock of all of said entities, except to the extent
otherwise permitted pursuant to Section 8.02.
(b) On and after the Initial Borrowing Date, there are no
restrictions on the Borrower or any of its Subsidiaries which prohibit or
otherwise restrict the transfer of cash or other assets from any Subsidiary of
the Borrower to the Borrower, other than prohibitions or restrictions existing
under or by reason of (i) this Agreement and the other Credit Documents, (ii)
applicable law, (iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices, (iv) any
restriction or encumbrance with respect to a Subsidiary of the Borrower imposed
pursuant to an agreement which has been entered into for the sale or disposition
of all or substantially all of the capital stock or assets of such Subsidiary,
so long as such sale or disposition is permitted under this Agreement, and (v)
any documents or instruments governing the terms of any Indebtedness or other
obligations secured by Liens permitted by Section 8.03, provided that such
prohibitions or restrictions apply only to the assets subject to such Liens.
6.15 Patents, etc. The Borrower and each of its Subsidiaries have
-------------
obtained all material patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of their businesses taken as a whole as
presently conducted and as proposed to be conducted.
6.16 Pollution and Other Regulations. (a) Each of the Borrower and
-------------------------------
its Subsidiaries is in compliance with all applicable Environmental Laws
governing its business for which failure to comply is likely to have a Material
Adverse Effect, and neither the Borrower nor any of its Subsidiaries is liable
for any material penalties, fines or forfeitures for failure to comply with any
of the foregoing in the manner set forth above. All licenses, permits,
registrations or approvals required for the business of the Borrower and each of
its Subsidiaries, as conducted as of the Initial Borrowing Date, under any
Environmental Law have been secured and the Borrower and each of its
Subsidiaries is in substantial compliance therewith, except such
-33-
licenses, permits, registrations or approvals the failure to secure or to comply
therewith is not likely to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries is in any respect in noncompliance with, breach of
or default under any applicable writ, order, judgment, injunction, or decree to
which the Borrower or such Subsidiary is a party or which would affect the
ability of the Borrower or such Subsidiary to operate any real property and no
event has occurred and is continuing which, with the passage of time or the
giving of notice or both, would constitute noncompliance, breach of or default
thereunder, except in each such case, such noncompliance, breaches or defaults
as are not likely to, in the aggregate, have a Material Adverse Effect. There
are as of the Initial Borrowing Date no Environmental Claims pending or, to the
best knowledge of the Borrower, threatened, which (a) question the validity,
term or entitlement of the Borrower or any of its Subsidiaries for any permit,
license, order or registration required for the operation of any facility which
the Borrower or any of its Subsidiaries currently operates and (b) wherein an
unfavorable decision, ruling or finding would be reasonably likely to have a
Material Adverse Effect. There are no facts, circumstances, conditions or
occurrences on any Real Property or, to the knowledge of the Borrower, on any
property adjacent to any such Real Property that could reasonably be expected
(i) to form the basis of an Environmental Claim against the Borrower, any of its
Subsidiaries or any Real Property of the Borrower or any of its Subsidiaries, or
(ii) to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property under any
Environmental Law, except in each such case, such Environmental Claims or
restrictions that individually, or in the aggregate, are not reasonably likely
to have a Material Adverse Effect.
(b) Hazardous Materials have not at any time been (i) generated,
used, treated or stored on, or transported to or from, any Real Property of the
Borrower or any of its Subsidiaries or (ii) released on any Real Property, in
each case where such occurrence or event individually or in the aggregate is
reasonably likely to have a Material Adverse Effect.
6.17 Properties. The Borrower and each of its Subsidiaries have good
----------
and marketable title to all properties owned by them, including all property
reflected in the consolidated balance sheet of the Borrower and its Subsidiaries
as referred to in Section 6.10(b), free and clear of all Liens, other than (i)
as referred to in the consolidated balance sheet or in the notes thereto or (ii)
otherwise permitted by Section 8.03. Annex VI contains a true and complete list
of each Real Property owned or leased by the Borrower or any of its Subsidiaries
on the Initial Borrowing Date, the type of interest therein held by the Borrower
or the respective Subsidiary and whether such Real Property is a Mortgaged
Property.
6.18 Labor Relations. No Credit Party is engaged in any unfair labor
---------------
practice that could reasonably be expected to have a Material Adverse Effect.
There is (i) no unfair labor practice complaint pending against any Credit Party
or threatened against any of them, before the National Labor Relations Board,
and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against any Credit Party or
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against any Credit Party or threatened against any Credit Party
and (iii) no union representation question existing with respect to the
employees of any Credit Party and no union organizing activities are
-34-
taking place, except with respect to any matter specified in clause (i), (ii) or
(iii) above, either individually or in the aggregate, such as is not reasonably
likely to have a Material Adverse Effect.
6.19 Senior Subordinated Notes. The subordination provisions
-------------------------
contained in the Stub Senior Subordinated Notes are enforceable by the Lenders
against the Borrower and the holders of such Stub Senior Subordinated Notes, and
all Obligations of the Borrower are or will be within the definition of "Senior
Indebtedness" included in such provisions of the Senior Subordinated Note
Documents.
6.20 Existing Indebtedness. Annex VII sets forth a true and complete
---------------------
list of all Indebtedness of the Borrower and each of its Subsidiaries as of the
Initial Borrowing Date and which is to remain outstanding after giving effect to
the refinancing of all Loans under and as defined in the Existing Credit
Agreement (excluding the Loans, the Letters of Credit and the Stub Senior
Subordinated Notes, the "Existing Indebtedness"), in each case showing the
aggregate principal amount thereof and the name of the respective borrower (or
issuer) and any other entity which directly or indirectly guaranteed such debt.
SECTION 7. Affirmative Covenants. The Borrower covenants and agrees
---------------------
that on the Initial Borrowing Date and thereafter for so long as this Agreement
is in effect and until the Commitments have terminated, no Letters of Credit or
Notes are outstanding and the Loans and Unpaid Drawings, together with interest,
Fees and all other Obligations incurred hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each
---------------------
Lender:
(a) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of the Borrower, the consolidated balance sheet of the Borrower
and its Subsidiaries, as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash flows for
such fiscal year, in each case setting forth comparative consolidated figures
for the preceding fiscal year, and examined by independent certified public
accountants of recognized national standing whose opinion shall not be qualified
as to the scope of audit and as to the status of the Borrower or any of its
Subsidiaries as a going concern, together with a certificate of such accounting
firm stating that in the course of its regular audit of the business of the
Borrower, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge of any
Default or Event of Default which has occurred and is continuing or, if in the
opinion of such accounting firm such a Default or Event of Default has occurred
and is continuing, a statement as to the nature thereof.
(b) Quarterly Financial Statements. As soon as available and in any
------------------------------
event within 45 days after the close of each of the first three quarterly
accounting periods in each fiscal year, the consolidated balance sheet of the
Borrower and its Subsidiaries, as at the end of such quarterly period and the
related consolidated statements of income and retained earnings and of cash
flows for such quarterly period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, and in each case setting forth
comparative consolidated figures for the related periods in the prior fiscal
year, all of which shall be certified by the chief financial
-35-
officer or controller of the Borrower, subject to changes resulting from audit
and normal year-end audit adjustments.
(c) Monthly Reports. As soon as practicable, and in any event within
---------------
30 days, after the end of each monthly accounting period of each fiscal year
(other than the last monthly accounting period in such fiscal year) the
consolidated balance sheet of the Borrower and its Subsidiaries, as at the end
of such period, and the related consolidated statements of income and retained
earnings for such period, setting forth comparative figures for the
corresponding period of the previous year, all of which shall be certified by
the chief financial officer or controller of the Borrower subject to changes
resulting from audit and normal year-end audit adjustments.
(d) Budgets; etc. Not more than 60 days after the commencement of
-------------
each fiscal year of the Borrower, a budget of the Borrower and its Subsidiaries
in reasonable detail for each of the twelve months of such fiscal year.
Together with each delivery of consolidated financial statements pursuant to
Sections 7.01(a), (b) and (c), a comparison of the current year-to-date
financial results against the budgets required to be submitted pursuant to this
clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 7.01(a), (b) and (c), a
certificate of the chief financial officer, controller or other Authorized
Officer of the Borrower to the effect that no Default or Event of Default exists
or, if any Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate, in the case of the certificate delivered
pursuant to Sections 7.01(a) and (b), shall set forth the calculations required
to establish (I) the Adjusted Leverage Ratio on the last day of such fiscal year
or period and (II) whether the Borrower and its Subsidiaries were in compliance
with the provisions of Sections 8.05, 8.07, 8.09(a) (but only to the extent the
Borrower has made payments of the type described in clause (ii) thereof in such
period or year), 8.11 and 8.12 as at the end of such fiscal period or year, as
the case may be.
(f) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within three Business Days after the Borrower obtains knowledge thereof, notice
of (x) the occurrence of any event which constitutes a Default or Event of
Default which notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower proposes to take with respect thereto and
(y) the commencement of or any significant development in any litigation or
governmental proceeding pending against the Borrower or any of its Subsidiaries
which is likely to have a Material Adverse Effect or is likely to have a
material adverse effect on the ability of the Borrower or any Credit Party to
perform its obligations hereunder or under any other Credit Document.
(g) Borrowing Base Certificates. Promptly after determining same,
---------------------------
and in any event within five days following the BB Determination Date for each
calendar month, a Borrowing Base Certificate executed by the chief financial
officer or controller of the Borrower setting forth the Borrowing Base
determined as of such BB Determination Date (together with reasonable detail as
to the computation thereof).
(h) Auditors' Reports. Promptly upon receipt thereof, a copy of each
-----------------
other final
-36-
report or "management letter" submitted to the Borrower by its independent
accountants in connection with any annual, interim or special audit made by it
of the books of the Borrower.
(i) Environmental Matters. Promptly after obtaining knowledge of any
---------------------
of the following (but only to the extent that any of the following could
reasonably be expected to (x) have a Material Adverse Effect, either
individually or in the aggregate, or (y) result in a remedial cost to the
Borrower or any of its Subsidiaries in excess of $2,000,000), written notice of:
(i) any pending or threatened Environmental claim against the
Borrower or any of its Subsidiaries or any Real Property owned or operated
by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that (x) results in
noncompliance by the Borrower or any of its Subsidiaries with any
applicable Environmental Law or (y) could reasonably be anticipated to form
the basis of an Environmental claim against the Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that could reasonably
be anticipated to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by the
Borrower or its Subsidiary, as the case may be, of its interest in such
Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by the Borrower or any of its Subsidiaries.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's response or proposed response thereto. In addition, the Borrower
agrees to provide the Lenders with copies of all material communications by the
Borrower or any of its Subsidiaries with any Person, government or governmental
agency relating to any of the matters set forth in clauses (i)-(iv) above, and
such detailed reports relating to any of the matters set forth in clauses (i)-
(iv) above as may reasonably be requested by the Administrative Agent or the
Required Lenders.
(j) Other Information. Promptly upon transmission thereof, (i)
-----------------
copies of any filings and registrations with, and reports to, the Securities and
Exchange Commission or any successor thereto (the "SEC") by the Borrower or any
of its Subsidiaries, (ii) copies of any material complaints or correspondence
received from the Federal Trade Commission and/or the postal service (x)
regarding compliance with the Federal Trade Commission Act, as amended (15
U.S.C. Subsection 45) or (y) in connection with advertising materials
distributed by the Borrower, and (iii) with reasonable promptness, such other
information or documents (financial or otherwise) as the Administrative Agent on
its own behalf or on behalf of the Required Lenders may reasonably request from
time to time.
-37-
7.02 Books, Records and Inspections. The Borrower will, and will
------------------------------
cause its Subsidiaries to, permit, upon reasonable notice to the chief financial
officer, controller or any other Authorized Officer of the Borrower (x) officers
and designated representatives of the Administrative Agent or the Required
Lenders to visit and inspect any of the properties or assets of the Borrower and
any of its Subsidiaries in whomsoever's possession, and to examine the books of
account of the Borrower and any of its Subsidiaries and discuss the affairs,
finances and accounts of the Borrower and of any of its Subsidiaries with, and
be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to such reasonable
extent as the Administrative Agent or the Required Lenders may desire and (y)
not more than once per year the Administrative Agent, or a third party
designated by the Administrative Agent, to conduct, at the Borrower's expense,
an audit of the accounts receivable and inventories of the Borrower and its
Subsidiaries at such times as the Administrative Agent shall reasonably require.
7.03 Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to, at all times maintain in full force and effect insurance in
such amounts, covering such risks and liabilities and with such deductibles or
self-insured retentions as are in accordance with normal industry practice. At
any time that insurance at the levels described in Annex VIII is not being
maintained by the Borrower and its Subsidiaries, the Borrower will notify the
Lenders in writing thereof and, if thereafter notified by the Administrative
Agent to do so, the Borrower will, and will cause its Subsidiaries to, obtain
insurance at such levels at least equal to those set forth in Annex VIII to the
extent then generally available (but in any event within the deductible or self-
insured retention limitations set forth in the preceding sentence) or otherwise
as are acceptable to the Administrative Agent. The Borrower will, and will
cause each of its Subsidiaries to, furnish on the Restatement Effective Date and
annually thereafter to the Administrative Agent a summary of the insurance
carried together with certificates of insurance and other evidence of such
insurance, if any, naming the Collateral Agent as an additional insured and/or
loss payee.
7.04 Payment of Taxes. The Borrower will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, might become a Lien or charge
upon any properties of the Borrower or any of its Subsidiaries, provided that
neither the Borrower nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves (in the good faith
judgment of the management of the Borrower) with respect thereto in accordance
with GAAP.
7.05 Consolidated Corporate Franchises. The Borrower will do, and
---------------------------------
will cause each Subsidiary to do, or cause to be done, all things necessary to
preserve and keep in full force and effect its existence, material rights and
authority, provided that any transaction permitted by Section 8.02 will not
constitute a breach of this Section 7.05.
7.06 Compliance with Statutes, etc. The Borrower will, and will
------------------------------
cause each
-38-
Subsidiary to, comply with all applicable statutes, regulations and orders of,
and all applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property other than those the non-compliance with which would not have a
Material Adverse Effect or would not have a material adverse effect on the
ability of any Credit Party to perform its obligations under any Credit Document
to which it is party.
7.07 ERISA. As soon as possible and, in any event, within 10 days
-----
after the Borrower or any of its Subsidiaries knows or has reason to know of the
occurrence of any of the following, the Borrower will deliver to each of the
Lenders a certificate of the chief financial officer of the Borrower setting
forth details as to such occurrence and such action, if any, which the Borrower,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed with or
by the Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan
participant (other than notices relating to an individual participant's
benefits) or the Plan administrator with respect thereto: that a Reportable
Event has occurred; that an accumulated funding deficiency has been incurred or
an application is reasonably likely to be or has been made to the Secretary of
the Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan; that a
Plan which has an Unfunded Current Liability has been or may be terminated,
reorganized, partitioned or declared insolvent under Title IV of ERISA; that a
Plan has an Unfunded Current Liability and there is a failure to make a required
contribution, which gives rise to a lien under ERISA or the Code; that
proceedings are reasonably likely to be or have been instituted to terminate a
Plan which has an Unfunded Current Liability; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent contribution
to a Plan; that the Borrower, any Subsidiary or any ERISA Affiliate will or may
incur any liability (including, any contingent or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(l) or
502(l) of ERISA or that the Borrower or any Subsidiary may incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any employee
pension benefit plan (as defined in Section 3(2) of ERISA). Upon request of a
Lender, the Borrower will deliver to such Lender a complete copy of the annual
report (Form 5500) of each Plan required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Lenders
pursuant to the first sentence hereof, copies of any annual reports and any
other material notices received by the Borrower or any Subsidiary with respect
to a Plan shall be delivered to the Lenders no later than 10 days after the
later of the date such notice has been filed with the Internal Revenue Service
or the PBGC, given to Plan participants (other than notices relating to an
individual participant's benefits) or received by the Borrower or such
Subsidiary.
7.08 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, ensure that its properties and equipment used or useful in its
business in whomsoever's possession they may be, are kept in good repair,
working order and condition, normal wear and
-39-
tear excepted, and, subject to Section 8.05, that from time to time there are
made in such properties and equipment all needful and proper repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto, to
the extent and in the manner useful or customary for companies in similar
businesses.
7.09 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries' fiscal years to end on December 31 of each year and (ii) each of
its, and each of its Subsidiaries' fiscal quarters to end on a Quarter End Date.
7.10 Use of Proceeds. All proceeds of the Loans shall be used as
---------------
provided in Section 6.05.
7.11 Additional Security; Further Assurances. (a) The Borrower will,
---------------------------------------
and will cause its Domestic Subsidiaries to, grant to the Collateral Agent
security interests and mortgages (each, an "Additional Mortgage") in such owned
Real Property of the Borrower and its Subsidiaries that is not owned or subject
to a Mortgage on the Initial Borrowing Date as may be requested from time to
time by the Administrative Agent. All such mortgages shall be granted pursuant
to documentation reasonably satisfactory in form and substance to the
Administrative Agent and shall constitute valid and enforceable Liens superior
to and prior to the rights of all third Persons and subject to no other Liens
except as are permitted by Section 8.03. The Additional Mortgages or instruments
related thereto shall have been duly recorded or filed in such manner and in
such places as are required by law to establish, perfect, preserve and protect
the Liens in favor of the Collateral Agent required to be granted pursuant to
the Additional Mortgages and all taxes, fees and other charges payable in
connection therewith shall have been paid in full.
(b) The Borrower will, and will cause its Domestic Subsidiaries to,
at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require. Furthermore, the Borrower shall cause to be delivered to
the Collateral Agent such opinions of counsel, title insurance and other related
documents as may be requested by the Administrative Agent to assure themselves
that this Section 7.11 has been complied with.
(c) The Borrower agrees that each action required above by this
Section 7.11 shall be completed as soon as possible, but in no event later than
60 days after such action is requested to be taken by the Administrative Agent
or the Required Lenders, provided that in no event shall the Borrower be
required to take any action, other than using its reasonable commercial efforts
without any material expenditure, to obtain consents from third parties with
respect to its compliance with this Section 7.11.
7.12 Compliance with Environmental Laws. (i) The Borrower will
----------------------------------
comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to the
-40-
ownership, lease or use of all Real Property now or hereafter owned, leased or
operated by the Borrower or any Subsidiary, will promptly pay or cause to be
paid all costs and expenses incurred in connection with such compliance, and
will keep or cause to be kept all such Real Property free and clear of any Liens
imposed pursuant to such Environmental Laws and (ii) neither the Borrower nor
any of its Subsidiaries will generate, use, treat, store, release or dispose of,
or permit the generation, use, treatment, storage, release or disposal of
Hazardous Materials on any Real Property now or hereafter owned, leased or
operated by the Company or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property, except
to the extent that the failure to comply with the requirements specified in
clause (i) or (ii) above, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
7.13 Interest Rate Agreements. The Borrower will, no later than the
------------------------
date occurring 90 days after the Initial Borrowing Date, enter into Interest
Rate Agreements which cover for the period from the date thereof to at least
three years from the Initial Borrowing Date, 50% or more of the aggregate
outstanding principal amount of Term Loans on terms reasonably satisfactory to
the Administrative Agent and the Borrower.
SECTION 8. Negative Covenants. The Borrower hereby covenants and
------------------
agrees that as of the Initial Borrowing Date and thereafter for so long as this
Agreement is in effect and until the Commitments have terminated, no Letters of
Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder, are paid in full:
8.01 Changes in Business. (a) The Borrower will not, and will not
-------------------
permit any of its Subsidiaries to, materially alter the character of the
business of the Borrower and its Subsidiaries from that conducted at the Initial
Borrowing Date, provided that this Section 8.01 shall not restrict the making of
any investment expressly permitted by Section 8.06.
(b) Borrower shall cause HCE to engage in no significant business and
at no time to have assets or liabilities with an aggregate value in excess of
$50,000.
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The
-------------------------------------------------------
Borrower will not, and will not permit any Subsidiary to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
sell or otherwise dispose of all or any part of its property or assets (other
than inventory or obsolete equipment or excess equipment no longer needed in the
conduct of the business in the ordinary course of business) or purchase, lease
or otherwise acquire all or any part of the property or assets of any Person
(other than purchases or other acquisitions of inventory, leases, materials and
equipment in the ordinary course of business) or agree to do any of the
foregoing at any future time, except that the following shall be permitted:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into, or be liquidated into, the Borrower or a Subsidiary Guarantor (so
long as the Borrower or such Subsidiary Guarantor is the surviving
corporation), or all or any part of its business, properties and assets may
be conveyed, leased, sold or transferred to the Borrower or any
-41-
Subsidiary Guarantor (or any other Subsidiary), provided that neither the
Borrower nor any Subsidiary Guarantor may be a party to any merger,
consolidation or liquidation otherwise permitted by this clause (a)
involving a Subsidiary that is not a Wholly-Owned Subsidiary;
(b) capital expenditures to the extent within the limitations set
forth in Section 8.05 hereof;
(c) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 8.06;
(d) each of the Borrower and the Subsidiary Guarantors may lease (as
lessee) real or personal property in the ordinary course of business (so
long as such lease does not create a Capitalized Lease Obligation not
otherwise permitted by Section 8.04(d));
(e) licenses or sublicenses by the Borrower and its Subsidiary
Guarantors of software, customer lists, trademarks and other intellectual
property in the ordinary course of business, provided, that such licenses
or sublicenses shall not interfere with the business of the Borrower or any
Subsidiary Guarantor;
(f) other sales or dispositions of assets in the ordinary course of
business, provided that (w) the aggregate Net Cash Proceeds received from
--------
all such sales and dispositions shall not exceed $1,500,000 in any fiscal
year of the Borrower, (x) each such sale shall be in an amount at least
equal to the fair market value thereof (as determined by the Board of
Directors of the Borrower in the case of sales in excess of $500,000) and
for proceeds consisting solely of not less than (A) 80% cash and (B) seller
indebtedness evidenced by promissory notes which notes shall be pledged and
delivered to the Collateral Agent pursuant to the Borrower Pledge
Agreement, and (y) the Net Cash Proceeds of any such sale are applied to
repay the Loans to the extent required by Section 4.02(A)(c), and provided
--------
further, that the sale or disposition of the capital stock of (i) the
-------
Borrower or any Subsidiary Guarantor shall be prohibited and (ii) any
Subsidiary of the Borrower (other than a Subsidiary Guarantor) shall be
prohibited unless it is for all of the outstanding capital stock of such
Subsidiary owned by the Borrower;
(g) other sales or dispositions of assets in each case to the extent
the Required Lenders have consented in writing thereto and subject to such
conditions as may be set forth in such consent;
(h) any Subsidiary may be liquidated into the Borrower or a
Subsidiary Guarantor; and
(i) acquisitions and dispositions of Permitted Acquisitions,
Permitted Investments and Permitted Joint Ventures in accordance with
Section 8.06(g).
8.03 Liens. The Borrower will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of
-42-
any kind (real or personal, tangible or intangible) of the Borrower or any such
Subsidiary whether now owned or hereafter acquired, or sell any such property or
assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable or
notes with recourse to the Borrower or any of its Subsidiaries) or assign any
right to receive income, or file or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording or
notice statute, except:
(a) Liens for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves (in
the good faith judgment of the management of the Borrower) have been
established;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business, such as carriers', warehousemen's and mechanics' Liens,
statutory landlord's Liens, and other similar Liens arising in the ordinary
course of business, and (x) which do not in the aggregate materially
detract from the value of such property or assets or materially impair the
use thereof in the operation of the business of the Borrower or any
Subsidiary or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens on assets of the Borrower and each Subsidiary existing on
the Initial Borrowing Date and listed on Annex IX hereto, without giving
effect to any subsequent extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09
provided, that no cash or property is deposited or delivered to secure any
respective judgment or award (or any appeal bond in respect thereof, except
as permitted by the following clause (f));
(f) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, performance and return-
of-money bonds and other similar obligations incurred in the ordinary
course of business (exclusive of obligations in respect of the payment for
borrowed money), provided that the aggregate amount of deposits at any time
pursuant to this clause (f) shall not exceed $5,000,000;
(g) leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any of its
Subsidiaries;
-43-
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from UCC financing statements regarding leases
permitted by this Agreement;
(j) purchase money Liens securing payables arising from the purchase
by the Borrower or any Subsidiary Guarantor of any equipment or goods in
the normal course of business, provided that such payables shall not
constitute Indebtedness;
(k) any interest or title of a lessor under any lease permitted by
this Agreement;
(l) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price of assets
acquired by the Borrower or any Subsidiary Guarantor, provided that any
such Liens attach only to the assets so acquired and that all Indebtedness
secured by Liens created pursuant to this clause (l) shall not exceed
[$7,000,000] at any time outstanding;
(m) Liens created pursuant to Capital Leases permitted pursuant to
Section 8.04(d); and
(n) Liens securing Indebtedness not in excess of $2,500,000 at any
time outstanding.
8.04 Indebtedness. The Borrower will not, and will not permit any of
------------
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness owing by (i) any Subsidiary Guarantor to another
Subsidiary Guarantor or the Borrower, (ii) any other Subsidiary to another
Subsidiary that is not a Subsidiary Guarantor and (iii) the Borrower to any
Subsidiary Guarantor;
(c) Indebtedness of the Borrower evidenced by the Stub Senior
Subordinated Notes;
(d) Capitalized Lease Obligations of the Borrower and each Subsidiary
Guarantor, provided that the aggregate Capitalized Lease Obligations under
all Capital Leases entered into after the Initial Borrowing Date shall not
exceed [$10,500,000];
(e) Existing Indebtedness, without giving effect to any subsequent
extension, renewal or refinancing thereof;
(f) Indebtedness under Interest Rate Agreements relating to the Loans
on terms and conditions satisfactory to the Administrative Agent to the
extent determined, in good
-44-
faith by the Borrower, to be non-speculative in nature;
(g) Indebtedness of the Borrower represented by the obligations of
the Borrower to make payments with respect to the cancellation or
repurchase of certain stock of officers, employees and directors (or their
estates) of the Borrower and its Subsidiaries, to the extent permitted by
Section 8.09;
(h) Indebtedness incurred pursuant to purchase money mortgages
permitted by Section 8.03(l); and
(i) additional Indebtedness of the Borrower and the Subsidiary
Guarantors not to exceed an aggregate outstanding principal amount of
$5,000,000 at any time.
8.05 Capital Expenditures. (a) The Borrower will not, and will not
--------------------
permit any of its Subsidiaries to, incur Consolidated Capital Expenditures,
provided that the Borrower and the Subsidiary Guarantors may make Consolidated
Capital Expenditures of up to [$3,000,000] in any fiscal year.
(b) In the event that the maximum amount which is permitted to be
expended in respect of Consolidated Capital Expenditures during any fiscal year
pursuant to Section 8.05(a) (without giving effect to this clause (b)) is not
fully expended during such fiscal year, the maximum amount which may be expended
during the immediately succeeding fiscal year pursuant to Section 8.05(a) shall
be increased by such unutilized amount, provided that such increase shall not
exceed $1,000,000 in any fiscal year.
(c) In addition to the foregoing, the Borrower may make Consolidated
Capital Expenditures in amounts in excess of those permitted under Sections
8.05(a) and (b), provided that the amount of such additional Consolidated
Capital Expenditures shall not exceed the Available Excess Cash Flow Amount at
the time of such additional Consolidated Capital Expenditure (determined before
giving effect to the making of such additional Consolidated Capital
Expenditure).
8.06 Advances, Investments and Loans. The Borrower will not, and
-------------------------------
will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to any
Person, except:
(a) the Borrower or any Subsidiary may invest in cash and Cash
Equivalents;
(b) the Borrower and any Subsidiary may acquire and hold receivables
owing to them, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
(c) the intercompany Indebtedness described in Section 8.04(b) shall
be permitted;
-45-
(d) loans and advances to employees in the ordinary course of
business in an aggregate principal amount not to exceed $500,000 at any
time outstanding shall be permitted;
(e) the Borrower and each Subsidiary Guarantor may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(f) Interest Rate Agreements permitted by Section 8.04(f) shall be
permitted;
(g) the Borrower or any Subsidiary Guarantor may make Permitted
Acquisitions, Permitted Investments (in accordance with the requirements
contained in the definition thereof) and/or make investments in Permitted
Joint Ventures not to exceed [$1,000,000] (plus amounts returned to the
Borrower as a result of sales of such investment or pursuant to a dividend
payment thereunder), in the aggregate for all the foregoing plus the
----
Available Excess Cash Flow Amount at the time of the making thereof (before
giving effect thereto);
(h) the Borrower may make contributions to an employee stock
ownership plan, provided such contributions are in Common Stock; and
(i) the Borrower may hold the promissory notes acquired in accordance
with Section 8.02(f).
8.07 Leases. The Borrower will not permit the aggregate payments
------
(including, without limitation, any property taxes paid by the Borrower and its
Subsidiaries as additional rent or lease payments) by the Borrower and its
Subsidiaries on a consolidated basis under agreements in effect as of the
Restatement Effective Date and/or entered into after the Restatement Effective
Date (including any such agreement that is an extension, replacement,
substitution, or renewal of any agreement entered into prior to such date) to
rent or lease any real or personal property (exclusive of Capitalized Lease
Obligations) to exceed [$3,000,000] in any fiscal year of the Borrower.
8.08 Prepayments of Indebtedness, etc. The Borrower will not, and
---------------------------------
will not permit any of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto money or securities before due for the purpose of paying
when due) or exchange of the Stub Senior Subordinated Notes or any Existing
Indebtedness;
(b) amend or modify, or permit the amendment or modification of, any
provisions of any Senior Subordinated Note Documents; and/or
-46-
(c) amend, modify or change in any manner adverse to the interests of
the Lenders the certificate of incorporation (including, without
limitation, by the filing of any certificate of designation) or by-laws of
the Borrower or any agreement entered into by the Borrower with respect to
its capital stock or enter into any new agreement in any manner adverse to
the interests of the Lenders with respect to the capital stock of the
Borrower.
8.09 Dividends, etc. (a) The Borrower will not, and will not permit
---------------
any of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in capital stock of such Person) or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any warrants for
or options or stock appreciation rights in respect of any of such shares), or
set aside any funds for any of the foregoing purposes, or permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of the Borrower or any other Subsidiary, as the
case may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay dividends to the Borrower
or to a Subsidiary Guarantor; and
(ii) the Borrower may redeem or repurchase Common Stock (or options to
purchase such Common Stock) from (1) officers, employees and directors (or
their estates) upon the death, permanent disability, retirement or
termination of employment of any such Person or otherwise in accordance
with (x) the Stockholders Agreement and (y) any stock option plan or any
employee stock ownership plan, or (2) other stockholders of the Borrower,
so long as the purpose of such purchase is to acquire Common Stock for
reissuance to new officers, employees and directors (or their estates) of
the Borrower to the extent so reissued within 12 months of any such
purchase, provided that in all such cases (A) no Default or Event of
--------
Default is then in existence or would arise therefrom and (B) the aggregate
amount of all cash paid in respect of all such shares so redeemed or
repurchased in any calendar year does not exceed $2,500,000 plus (I)
----
proceeds of key-man life insurance used for the purposes set forth in
subclause (2) and (II) the Available Excess Cash Flow Amount at the time of
any such redemption and repurchase (before giving effect thereto) and,
provided further, that in the event that the Borrower subsequently resells
----------------
to any member of its, or any Subsidiary Guarantors', management any shares
redeemed or repurchased pursuant to this clause (ii), the amount of
repurchases the Borrower may make from Management Investors pursuant to
this clause (ii) shall be increased by an amount equal to any cash received
by the Borrower upon the resale of such shares.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist any encumbrance or
restriction which prohibits or otherwise
-47-
restricts (A) the ability of any Subsidiary to (a) pay dividends or make other
distributions or pay any Indebtedness owed to the Borrower or any Subsidiary,
(b) make loans or advances to the Borrower or any Subsidiary, or (c) transfer
any of its properties or assets to the Borrower or any Subsidiary or (B) the
ability of the Borrower or any other Subsidiary of the Borrower to create,
incur, assume or suffer to exist any Lien upon its property or assets to secure
the Obligations, other than prohibitions or restrictions existing under or by
reason of:
(i) this Agreement and the other Credit Documents;
(ii) applicable law;
(iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices;
(iv) any restriction or encumbrance with respect to a Subsidiary of
the Borrower imposed pursuant to an agreement which has been entered into
for the sale or disposition of all or substantially all of the capital
stock or assets of such Subsidiary, so long as such sale or disposition is
permitted under this Agreement; and
(v) Liens permitted under Section 8.03 and any documents or
instruments governing the terms of any Indebtedness or other obligations
secured by any such Liens, provided that such prohibitions or restrictions
apply only to the assets subject to such Liens.
8.10 Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit any Subsidiary to, enter into any transaction or series of
transactions after the Restatement Effective Date whether or not in the ordinary
course of business, with any Affiliate other than on terms and conditions
substantially as favorable to the Borrower or such Subsidiary as would be
obtainable by the Borrower or such Subsidiary at the time in a comparable arm's-
length transaction with a Person other than an Affiliate, provided that the
foregoing restrictions shall not apply to (i) transactions with its Affiliates
set forth in [Annex X] hereto, (ii) employment arrangements entered into in the
ordinary course of business with officers of the Borrower and its Subsidiaries,
and (iii) customary fees paid to members of the Board of Directors of the
Borrower and of its Subsidiaries.
8.11 Fixed Charge Coverage Ratio. The Borrower will not permit the
---------------------------
ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for any Test
Period ending at the end of any fiscal quarter set forth below to be less than
the ratio set forth opposite such fiscal quarter:
Fiscal Quarter Ratio
-------------- -----
________________________ _______
________________________ _______
Each fiscal quarter ended thereafter _______
8.12 Senior Leverage Ratio. The Borrower will not permit the Senior
---------------------
Leverage
-48-
Ratio as of the end of any fiscal quarter set forth below to be more than the
ratio set forth opposite such fiscal quarter:
Fiscal Quarter Ratio
-------------- -----
________________________ ________
________________________ ________
Each fiscal quarter ended thereafter ________
8.13 Issuance of Stock. The Borrower will not permit any of its
-----------------
Subsidiaries directly or indirectly to issue, sell, assign, pledge or otherwise
encumber or dispose of any shares of its capital stock or other securities (or
warrants, rights or options to acquire shares or other equity securities) of
such Subsidiary, except, to the extent permitted by Section 8.06, to the
Borrower or to qualify directors if required by applicable law.
SECTION 9. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment when
--------
due of any principal of the Loans or (ii) default, and such default shall
continue for five or more days, in the payment when due of any Unpaid Drawing,
any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or statement
---------------------
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
9.03 Covenants. Any Credit Party shall (a) default in the due
---------
performance or observance by it of any term, covenant or agreement contained in
Section 7.11 or 8, or (b) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in Section 9.01,
9.02 or clause (a) of this Section 9.03) contained in this Agreement and such
default shall continue unremedied for a period of at least 30 days after notice
to the defaulting party by the Administrative Agent or the Required Lenders; or
9.04 Default Under Other Agreements. (a) The Borrower or any of its
------------------------------
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable
thereto or (ii) default in the observance or performance of any agreement or
condition relating to any such 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, or to permit the holder or holders of such Indebtedness
(or a trustee or Administrative
-49-
Agent on behalf of such holder or holders) to cause any such Indebtedness to
become due prior to its stated maturity; or (b) any such Indebtedness of the
Borrower or any of its Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, provided that it shall not constitute an
--------
Event of Default pursuant to this Section 9.04 unless the principal amount of
any one issue of such Indebtedness exceeds [$3,500,000] or the aggregate amount
of all Indebtedness referred to in clauses (a) and (b) above exceeds
[$4,500,000] at any one time; or
9.05 Bankruptcy, etc. The Borrower or any of its Material
----------------
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy", as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrower or any of its Material Subsidiaries and the
petition is not controverted within 10 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Borrower or any of its Material Subsidiaries; or the Borrower or
any of its Material Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to or any of its Material Subsidiaries; or there is
commenced against the Borrower or any of its Material Subsidiaries any such
proceeding which remains undismissed for a period of 60 days; or the Borrower or
any of its Material Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
the Borrower or any of its Material Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or the Borrower or any of its
Material Subsidiaries makes a general assignment for the benefit of creditors;
or any corporate action is taken by the Borrower or any of its Material
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) A single-employer plan (as defined in Section 4001
-----
of ERISA) established by the Borrower, any of its Subsidiaries or any ERISA
Affiliate shall fail to maintain the minimum funding standard required by
Section 412 of the Code for any plan year or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412 of
the Code or shall provide security to induce the issuance of such waiver or
extension, (b) any Plan is or shall have been or is likely to be terminated or
the subject of termination proceedings under ERISA or an event has occurred
entitling the PBGC to terminate a Plan under Section 4042(a) of ERISA, (c) any
Plan shall have an Unfunded Current Liability or (d) the Borrower or a
Subsidiary or any ERISA Affiliate has incurred or is likely to incur a material
liability to or on account of a termination of or a withdrawal from a Plan under
Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; and there shall result
from any such event or events described in the preceding clauses of this Section
9.06 the imposition of a Lien upon the assets of the Borrower or any Subsidiary,
the granting of a security interest, or a liability or a material risk of
incurring a liability to the PBGC or a Plan or a trustee appointed under ERISA
or a penalty under Section 4971 of the Code, in each case which would have, in
the opinion of the Required Lenders a Material Adverse Effect; or
-50-
9.07 Security Documents. Any Security Document shall cease to be in
------------------
full force and effect, or shall cease to give the Collateral Agent any Lien
encumbering assets with an aggregate fair market value in excess of $1,000,000
(and, if encumbering assets with a fair market value of less than $5,000,000,
for a period greater than thirty or more days), or any material rights, powers
and privileges purported to be created thereby in favor of the Collateral Agent
or any Credit Party shall default in any material respect in the due performance
or observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document; or
9.08 Subsidiary Guaranty. The Subsidiary Guaranty or any provision
-------------------
thereof shall cease to be in full force or effect, or any Subsidiary Guarantor
or any Person acting by or on behalf of any such Subsidiary Guarantor shall deny
or disaffirm such guarantor's obligations under such Subsidiary Guaranty or any
such Subsidiary Guarantor shall default in the due performance or observance of
any material term, covenant or agreement on its part to be performed or observed
by it pursuant to the Subsidiary Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be entered
---------
against the Borrower or any of its Subsidiaries involving a liability of
[$3,500,000] or more in the case of any one such judgment or decree and
[$4,500,000] or more in the aggregate for all such judgments and decrees for the
Borrower and its Subsidiaries (not paid or to the extent not covered by
insurance) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against the Borrower,
except as otherwise specifically provided for in this Agreement (provided that,
if an Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately and any Commitment Commission shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all obligations owing
hereunder (including Unpaid Drawings) and thereunder to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or
all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct the Borrower to pay (and the Borrower
hereby agrees upon receipt of such notice, or upon the occurrence of any Event
of Default specified in Section 9.05 in respect of the Borrower, it will pay) to
the Collateral Agent at the Payment Office such additional amounts of cash, to
be held as security for the Borrower's reimbursement obligations in respect of
Letters of Credit then outstanding equal to the aggregate Stated Amount of all
Letters of Credit then outstanding.
-51-
SECTION 10. Definitions. As used herein, the following terms shall
-----------
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Additional Mortgages" shall have the meaning provided in Section
7.11.
"Adjusted Cash Flow" for any fiscal year shall mean Consolidated Net
Income for such fiscal year (after provision for taxes) plus the amount of all
----
net non-cash charges (including, without limitation, depreciation, deferred tax
expense, non-cash interest expense, amortization of deferred customer
acquisition costs, write-downs of inventory and other non-cash charges) that
were deducted in arriving at Consolidated Net Income for such fiscal year minus
-----
the total amount of deferred customer acquisition costs capitalized during such
period, minus the amount of all non-cash gains and gains from sales of assets
-----
(other than sales of inventory and equipment in the normal course of business)
that were added in arriving at Consolidated Net Income for such fiscal year.
"Adjusted RC Percentage" shall mean (x) at a time when no Lender
Default exists, for each RC Lender such RC Lender's Revolving Percentage and (y)
at a time when a Lender Default exists (i) for each RC Lender that is a
Defaulting Lender, zero and (ii) for each RC Lender that is a Non-Defaulting
Lender, the percentage determined by dividing such RC Lender's Revolving
Commitment at such time by the Adjusted Total Revolving Commitment at such time,
it being understood that all references herein to Revolving Commitments and the
Adjusted Total Revolving Commitment at a time when the Total Revolving
Commitment or Adjusted Total Revolving Commitment, as the case may be, has been
terminated shall be references to the Revolving Loan Commitments or Adjusted
Total Revolving Commitment, as the case may be, in effect immediately prior to
such termination, provided that (A) no RC Lender's Adjusted RC Percentage shall
change upon the occurrence of a Lender Default from that in effect immediately
prior to such Lender Default if, after giving effect to such Lender Default and
any repayment of Revolving Loans and Swingline Loans at such time pursuant to
Section 4.02(A)(a) or otherwise, the sum of (i) the aggregate outstanding
principal amount of Revolving Loans of all Non-Defaulting Lenders plus (ii) the
aggregate outstanding principal amount of Swingline Loans plus (iii) the Letter
of Credit Outstandings, exceeds the Adjusted Total Revolving Loan Commitment;
(B) the changes to the Adjusted RC Percentage that would have become effective
upon the occurrence of a Lender Default but that did not become effective as a
result of the preceding clause (A) shall become effective on the first date
after the occurrence of the relevant Lender Default on which the sum of (i) the
aggregate outstanding principal amount of the Revolving Loans of all Non-
Defaulting Lenders plus (ii) the aggregate outstanding principal amount of the
Swingline Loans plus (iii) the Letter of Credit Outstandings is equal to or less
than the Adjusted Total Revolving Commitment; and (C) if (i) a Non-Defaulting
Lender's Adjusted RC Percentage is changed pursuant to the preceding clause (B)
and (ii) any repayment of such Lender's Revolving Loans, or of Unpaid Drawings
with respect to Letters of Credit or of Swingline Loans, that were made during
the period commencing after the date of the relevant Lender Default and ending
on the date of such change to its Adjusted RC Percentage must be returned to any
Borrower as a preferential or similar payment in any bankruptcy or similar
proceeding of such Borrower, then the change to such Non-Defaulting Lender's
Adjusted RC
-52-
Percentage effected pursuant to said clause (B) shall be reduced to that
positive change, if any, as would have been made to its Adjusted RC Percentage
if (x) such repayments had not been made and (y) the maximum change to its
Adjusted RC Percentage would have resulted in the sum of the outstanding
principal of Revolving Loans made by such Lender plus such Lender's new Adjusted
RC Percentage of the outstanding principal amount of Swingline Loans and of
Letter of Credit Outstandings equalling such Lender's Revolving Commitment at
such time.
"Adjusted Revolving Commitment" for each RC Lender that is a Non-
Defaulting Lender shall mean at any time the product of such RC Lender's
Adjusted RC Percentage and the Adjusted Total Revolving Commitment.
"Adjusted Total Revolving Commitment" shall mean at any time the Total
Revolving Commitment less the aggregate Revolving Commitments of all Defaulting
Lenders.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 11.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agents" shall mean the Administrative Agent and the Documentation
Agent.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time further modified, amended and/or supplemented.
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Election, the amount specified in the Reinvestment Notice delivered
by the Borrower in connection therewith as the amount of the Net Cash Proceeds
from the related Asset Sale that the Borrower intends to use to purchase,
construct or otherwise acquire Reinvestment Assets.
"Applicable Base Rate Margin" shall mean at any time (i) the
Applicable Eurodollar Margin at such time less (ii) 1.00%.
"Applicable CC Fee" shall mean .50% except that the Applicable CC Fee
shall equal .375% at any time when the Applicable Eurodollar Margin equals
1.50%.
"Applicable ECF Percentage" shall mean (i) .75% at any time the
Applicable Eurodollar Margin is ____%, (ii) .50% at any time the Applicable
Eurodollar Margin is ____ [etc].
-53-
"Applicable Eurodollar Margin" shall mean, except as provided below,
the percentage specified in the applicable of clauses (i), (ii), (iii), (iv) and
(v) below while the ratio set forth in such clause has been satisfied as at the
Relevant Determination Date.
(i) 2.50% in the event that at the Relevant Determination Date the
Leverage Ratio is equal to or greater than 3.25 to 1;
(ii) 2.25% in the event that at the Relevant Determination Date the
Leverage Ratio is equal to or greater than 2.75 to 1 but less than 3.25 to
1;
(iii) 2.00% in the event that at the Relevant Determination Date the
Leverage Ratio is equal to or greater than 2.25 to 1 but less than 2.75 to
1;
(iv) 1.75% in the event that at the Relevant Determination Date, the
Leverage Ratio is equal to or greater than 1.75 to 1 but less than 2.25 to
1; or
(v) 1.50% in the event that at the Relevant Determination Date the
Leverage Ratio is less than 1.75 to 1;
provided that the Applicable Eurodollar Margin shall not be less than (x) 2.25%
for any period in the event that the Total Bank Outstandings at the Relevant
Determination Date were $120 million or more, (y) 2.00% for any period in the
event that the Total Bank Outstandings at the Relevant Determination Date were
[$110] million or more and (z) 1.75% for any period in the event that the Total
Bank Outstandings at the Relevant Determination Date were [$100] million or
more. The Leverage Ratio shall be determined for the last day of a fiscal
quarter or year by delivery of an officer's certificate of the Borrower to the
Lenders pursuant to Section 7.01(e), which certificate shall set forth the
calculation of the Leverage Ratio. The Applicable Eurodollar Margin so
determined shall apply, except as set forth below, from five Business Days after
the date on which such officer's certificate is delivered to the Administrative
Agent to the earlier of (x) five Business Days after the date on which the next
certificate is delivered to the Administrative Agent pursuant to Section 7.01(e)
and (y) the 45th day (90th day in the case of year-end) following the end of the
fiscal quarter in which such first certificate was delivered. Notwithstanding
anything to the contrary contained above, the Applicable Eurodollar Margin shall
be (A) 2.50% (x) if no officer's certificate has been delivered to the Lenders
pursuant to Section 7.01(e) which sets forth the Leverage Ratio for the Relevant
Determination Date or the financial statements upon which any such calculations
are based have not been delivered, until such a certificate and/or financial
statements are delivered and (y) at all times while an Event of Default exists
and (B) 2.25% for the period prior to receipt of the officer's certificate of
the Borrower delivered pursuant to Section 7.01(e) with respect to the quarter
ended [March 31,2000].
"Asset Sale" shall mean the sale, transfer or other disposition by the
Borrower or any Subsidiary to any Person other than the Borrower or any
Subsidiary Guarantor of any asset of the Borrower or such Subsidiary (other than
sales, transfers or other dispositions in the ordinary course of business of
inventory and/or obsolete or excess equipment).
-54-
"Authorized Officer" shall mean any senior officer of the Borrower
designated as such in writing to the Administrative Agent by the Borrower in
each case to the extent acceptable to the Administrative Agent.
"Available Excess Cash Flow Amount" shall mean at any time, an amount
equal to 50% of (A) the aggregate Excess Cash Flow determined for each fiscal
year of the Borrower (commencing with the fiscal year ending on December 31,
[1999]) then ended less (B) the sum of (w) the aggregate amount of the Available
----
Excess Cash Flow Amount with which the Borrower has therefore made Permitted
Acquisitions, Permitted Investments and/or investments in Permitted Joint
Ventures in accordance with Section 8.06(g), (x) the aggregate amount of
Consolidated Capital Expenditures theretofore made pursuant to Section 8.05(c)
hereof, (y) the aggregate amount of redemptions and repurchases of the
Borrower's Common Stock theretofore made pursuant to Section 8.09(a)(ii)(B)(II)
and (z) the Available Excess Cash Flow Amount with which the Borrower has
therefore made voluntary prepayments in accordance with Section 4.01 that have
been applied pursuant to the last proviso in such Section.
"BB Determination Date" shall mean for any month, the 15th of such
month, or if not a Business Day, the next succeeding Business Day.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
"Base Rate" at any time shall mean the higher of (i) the rate which is
1/2 of 1% in excess of the Federal Funds Effective Rate and (ii) the Prime
Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the rates
provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of (i) Swingline Loans by the
Borrower from BTCo on a given date or (ii) one Type of Loan pursuant to a single
Facility by the Borrower from all of the Lenders having Commitments with respect
to such Facility on a pro rata basis on a given date (or resulting from
--- ----
conversions or the commencement of new Interest Periods on a given date), having
in the case of Eurodollar Loans the same Interest Period; provided that Base
--------
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of any
related Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, at any time, the sum of (x) 80% of the
book value of the accounts receivable of the Borrower and the Subsidiary
Guarantors plus (y) 50% of the book value of the inventory of the Borrower and
the Subsidiary Guarantors, in each determined on a consolidated basis in
accordance with GAAP and as set forth in the last Borrowing Base Certificate
delivered by the Borrower pursuant to Section 5.01(g) or 7.01(g) as the case may
be, provided that the Borrowing Base shall be zero at any time when a Default
under 7.01(g) has occurred and is continuing.
-55-
"Borrowing Base Certificate" shall have the meaning provided in
Section 5.01(g).
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Lease" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under
Capital Leases of the Borrower or any of its Subsidiaries in each case taken at
the amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Lender,
(y) any domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (z) any bank (or the parent company of such
bank) whose short-term commercial paper rating from Standard & Poor's Ratings
Services, a division of XxXxxx-Xxxx, Inc. ("S&P") is at least A-1 or the
equivalent thereof or from Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at
least P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in each
case with maturities of not more than six months from the date of acquisition,
(iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Lender or Approved Bank or by the parent company
of any Lender or Approved Bank and commercial paper issued by, or guaranteed by,
any industrial or financial company with a short-term commercial paper rating of
at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's (any such company, an "Approved Company"), or guaranteed by
any industrial company with a long term unsecured debt rating of at least A or
A2, or the equivalent of each thereof, from S&P or Moody's, as the case may be,
and in each case maturing within six months after the date of acquisition and
(v) investments in money market funds substantially all of whose assets are
comprised of securities of the type described in clauses (i) through (iv) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment
-56-
constituting interest, but only as and when so received) received by the
Borrower and/or any Subsidiary from such Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seq.
-- ----
"Change of Control" shall mean [(a) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the "beneficial owner" (as defined below),
directly or indirectly, of more than 30% of the total voting power of the Voting
Stock of the Borrower unless the Permitted Holders "beneficially own" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act as currently in effect,
it being agreed that for purposes of this clause (a) and clause (b) below, the
Permitted Holders shall be deemed to beneficially own any Voting Stock of a
corporation (the "specified corporation") held by any other corporation (the
"parent corporation") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, in the aggregate a majority of the voting
power of the Voting Stock of the parent corporation), directly or indirectly, in
the aggregate a greater percentage of the total voting power of the Voting Stock
of the Borrower than such other person or (b) occupation of a majority of the
seats of the Board of Directors of the Borrower by Persons whose nomination for
election by the stockholders of the Borrower was not approved by either (i) a
majority of the Permitted Holders or (ii) a majority of the directors of the
Borrower whose election or nomination for election was previously so approved.]
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the Restatement
Effective Date and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of
the Security Documents.
"Collateral Agent" shall mean the Administrative Agent acting as
Collateral Agent for the Lenders.
"Commitment" shall mean, with respect to each Lender, such Lender's
Term Commitment and Revolving Commitment.
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Common Stock" shall mean the common stock of the Borrower.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all expenditures (whether paid in cash or accrued as liabilities
and including in all events all amounts expended or capitalized under Capital
Leases but excluding any amount representing capitalized interest) by the
Borrower and its Subsidiaries during that period that, in conformity with GAAP,
are or are required to be included in the property, plant or equipment reflected
in the consolidated balance sheet of the Borrower and its Subsidiaries, provided
that Consolidated
-00-
Xxxxxxx Xxxxxxxxxxxx shall in any event include the purchase price paid in
connection with the acquisition of any Person (including through the purchase of
all of the capital stock or other ownership interests of such Person or through
merger or consolidation) to the extent allocable to property, plant and
equipment, provided further, that Consolidated Capital Expenditures shall only
----------------
include the amount thereof actually paid in cash during such period.
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense, but excluding, however, interest expense not
payable in cash and amortization of discount and deferred issuance and financing
costs.
"Consolidated Current Assets" shall mean, as to any Person at any
time, the current assets (other than cash and Cash Equivalents) of such Person
and its Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Current Liabilities" shall mean, as to any Person at any
time, the current liabilities of such Person and its Subsidiaries determined on
a consolidated basis in accordance with GAAP, but excluding all short-term
Indebtedness for borrowed money and the current portion of any long-term
Indebtedness of such Person or its Subsidiaries, in each case to the extent
otherwise included therein.
"Consolidated Debt" shall mean, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of the Borrower and
its Subsidiaries on a consolidated basis as determined in accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, (A) the sum of the
amounts for such period of (i) Consolidated Net Income, (ii) provisions for
taxes based on income, (iii) Consolidated Interest Expense, (iv) amortization or
write-off of deferred financing costs to the extent deducted in determining
Consolidated Net Income and (v) losses on sales of assets (excluding sales in
the ordinary course of business) and other extraordinary losses less (B) the
----
amount for such period of gains on sales of assets (excluding sales in the
ordinary course of business) and other extraordinary gains, all as determined on
a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense and
(iii) amortization expense, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Fixed Charges" shall mean, for any period, the sum,
without duplication, of the amounts for such period of (i) Consolidated Cash
Interest Expense, (ii) scheduled payments on the Term Loans and Existing
Indebtedness, (iii) Consolidated Capital Expenditures and (iv) if positive (x)
the total amount of deferred customer acquisition costs capitalized during such
period minus (y) the total amount of deferred customer acquisition costs
amortized during such period, all as determined on a consolidated basis for the
Borrower and its Subsidiaries in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense
-58-
(including that attributable to Capital Leases in accordance with GAAP) of the
Borrower and its Subsidiaries on a consolidated basis with respect to all
outstanding Indebtedness of the Borrower and its Subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs under Interest Rate Agreements.
"Consolidated Net Income" shall mean for any period, the net income
(or loss) of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
provided that there shall be excluded (i) the income (or loss) of any Person
(other than Subsidiaries of the Borrower) in which any other Person (other than
the Borrower or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to the
Borrower or any of its Subsidiaries by such Person during such period, (ii) the
income (or loss) of any Person accrued prior to the date it becomes a Subsidiary
of the Borrower or is merged into or consolidated with the Borrower or any of
its Subsidiaries or that Person's assets are acquired by the Borrower or any of
its Subsidiaries, (iii) the income of any Subsidiary of the Borrower to the
extent that the declaration or payment of dividends or similar distributions by
that Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (iv)
Transaction Expenses and (v) compensation expense resulting from the issuance of
capital stock, stock options or stock appreciation rights issued to employees,
including officers, of the Borrower or any Subsidiary, or the exercise of such
options or rights, in each case to the extent the obligation (if any) associated
therewith is not expected to be settled by the payment of cash by the Borrower
or any Affiliate of the Borrower and compensation expense resulting from the
repurchase of any such capital stock, options and rights.
"Consolidated Senior Debt" shall mean Consolidated Debt less, to the
extent included in Consolidated Debt, all indebtedness in respect of the Stub
Senior Subordinated Notes or any Indebtedness ranked pari passu with or
---- -----
subordinated to the Stub Senior Subordinated Notes.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, provided however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
-59-
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement, the Notes, the Security
Documents and the Subsidiary Guaranty and any documents executed in connection
therewith.
"Credit Event" shall mean and include the making of a Loan or the
issuance of a Letter of Credit.
"Credit Party" shall mean the Borrower and the Subsidiary Guarantors.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
["Designated Affiliate" shall mean any Affiliate of Xxxxx other than
any corporation or other Person (except for any corporation or other Person
engaged in a business similar, complementary or related to the nature or type of
the business of the Borrower and its Subsidiaries) controlled by, or any
investment fund (other than Xxxxx Investment Associates V, L.P. or any
investment fund that is not solely comprised of current and former professionals
of Xxxxx) managed by, Xxxxx.]
"Dividends" shall have the meaning provided in Section 8.09.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any state or territory
thereof.
"Effective Date" shall have the meaning provided in Section 12.10.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by the Borrower or any of its Subsidiaries solely in the ordinary course of such
Person's business and not in response to any third party action or request of
any kind) or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief
-60-
resulting from Hazardous Materials arising from alleged injury or threat of
injury to health, safety or the environment.
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guide, policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 U.S.C. (S) 1251 et
--
seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 7401 et seq.; the Clean
---- -- ----
Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. (S)
-- ----
3808 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et seq. and any
-- ---- -- ----
applicable state and local or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect as of
the Initial Borrowing Date and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower, a Subsidiary or a Credit Party would
be deemed to be a "single employer" within the meaning of Sections 414(b), (c),
(m) and (o) of the Code.
"Eurodollar Loans" shall mean each Loan bearing interest at the rates
provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each day during each
Interest Period for a Eurodollar Loan, (i) the offered rate for deposits in U.S.
dollars in the London interbank market for the relevant Interest Period which is
published by the British Bankers' Association and currently appears on Telerate
page 3750 as of 11:00 A.M. (London time) on the day which is two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period provided that if, for any reason, such a rate is not published
by the British Bankers' Association, the Eurodollar Rate shall be equal to a
rate per annum equal to the average rate (rounded upwards, if necessary, to the
nearest 1/100 of 1%) at which the Administrative Agent determines that U.S.
dollars in an amount comparable to the amount of the applicable Loans are being
offered to prime banks at approximately 11:00 A.M. (London time) on the day
which is two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period for settlement in immediately available
funds by leading banks in the London interbank market selected by the
Administrative Agent divided (and rounded upward to the next whole multiple of
1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum
rate of all reserve requirements (including without limitation any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of Eurocurrency liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section 9.
-61-
"Excess Cash Flow" shall mean, for any fiscal year, the remainder of
(i) the sum of (x) Adjusted Cash Flow for such fiscal year and (y)(I) the
decrease, if any, in Working Capital less (II) the decrease, if any, in the
principal amount of Revolving Loans, in each case from the first day to the last
day of such fiscal year, plus (ii) to the extent not included in (i) above, any
amounts received by the Borrower and its Subsidiaries in settlement of, or in
payment of any judgments resulting from, actions, suits or proceedings with
respect to the Borrower and/or its Subsidiaries from the first day to the last
day of such fiscal year, plus (iii) to the extent not included in (i) above, any
amounts received by the Borrower and/or its Subsidiaries in connection with the
repayment or redemption of any long-term promissory notes and/or preferred stock
of other Persons held by them, minus (iv) the sum of (w) the amount of
Consolidated Capital Expenditures (except to the extent financed through the
incurrence of Indebtedness) made during such fiscal year, (x) the capitalized
software costs and capitalized cost for mailing list rights, (y)(I) the
increase, if any, in Working Capital less (II) the increase, if any, in the
principal amount of Revolving Loans, in each case from the first day to the last
day of such fiscal year and (z) any repayments or prepayments of the principal
amount of Term Loans, except prepayments of the principal amount of Term Loans
made pursuant to Sections 4.02(A)(c), (d), (e), (f), (g) and/or (i).
"Existing Credit Agreement" shall mean the Amended and Restated Credit
Agreement dated as of November 20, 1997 among the Borrower, the lenders party
thereto and BTCo as agent, as such agreement is in effect immediately prior to
the Initial Borrowing Date.
"Existing Indebtedness" shall have the meaning provided in Section
6.20.
"Existing Letter of Credit" shall have the meaning provided in Section
2.01(d).
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the Term Facility or the Revolving Facility.
----
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 3.01.
"Final Maturity Date" shall mean September 30, 2005.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that
-62-
determinations in accordance with GAAP for purposes of Section 8, including
defined terms as used therein, are subject (to the extent provided therein) to
Section 12.07(a).
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that
contained, electric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances", "hazardous waste", "hazardous
materials", "extremely hazardous waste", "restricted hazardous waste", "toxic
substances", "toxic pollutants", "contaminants", or "pollutants", or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"HCE" shall mean Hosiery Corporation Enterprises, a Delaware
corporation.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase price
of assets or services which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person, (iii) the face amount of all
letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed, (v) all Capitalized Lease Obligations
of such Person, (vi) all obligations of such Person to pay a specified purchase
price for goods or services whether or not delivered or accepted, i.e., take-or-
----
pay and similar obligations, (vii) all net obligations of such Person under
Interest Rate Agreements and (viii) all Contingent Obligations of such Person,
(other than Contingent Obligations arising from the guaranty by such Person of
the obligations of the Borrower and/or its Subsidiaries to the extent such
guaranteed obligations do not constitute Indebtedness and are otherwise
permitted hereunder), provided that Indebtedness shall not include trade
payables and accrued expenses, in each case arising in the ordinary course of
business.
"Initial Borrowing Date" shall mean the first date on which Loans are
made hereunder.
"Interest Period" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to Section 1.09.
"Interest Rate Agreement" shall mean any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar agreement or other
similar agreement or arrangement designed to protect the Borrower or any
Subsidiary against fluctuations in interest rates.
"Xxxxx" shall mean Xxxxx & Company, L.P., a Delaware limited
partnership doing business as Xxxxx & Company, Inc.
"Leasehold" of any Person means all of the right, title and interest
of such Person
-63-
as lessee or licensee in, to and under leases or licenses of land, improvements
and/or fixtures.
"Lender" shall have the meaning provided in the first paragraph of
this Agreement.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any incurrence of Loans
or to fund its portion of any unreimbursed payment under Section 2.05(c) or (ii)
a Lender having notified the Administrative Agent and/or the Borrower that it
does not intend to comply with the obligations under Section 1.01 or under
Section 2.05(c), in the case of either clause (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Issuer" shall mean BTCo or any Lender which at the
request of the Borrower and with the consent of the Administrative Agent agrees,
in such Lender's sole discretion, to become a Letter of Credit Issuer for
purposes of issuing Letters of Credit pursuant to Section 2.
"Letter of Credit Outstandings" shall mean, at any time, the sum of,
without duplication, (i) the aggregate Stated Amount of all outstanding Letters
of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any date of determination, the ratio
of Consolidated Debt on such date to Consolidated EBITDA for the Test Period
(taken as one accounting period) ending on such date.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Loan" shall have the meaning provided in Section 1.01.
["Management Investor" means the executive officers of the Borrower
(i) on the Initial Borrowing Date and any persons who become executive officers
of the Borrower at a time when Xxxxx and its Affiliates "beneficially own" (as
defined in clause (a) of the definition of ("Change of Control"), directly or
indirectly, more than a majority of the capital stock of the Borrower and (ii)
who own capital stock of the Borrower.]
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(d).
"Margin Stock" shall have the meaning provided in Regulation U.
-64-
"Material Adverse Effect" shall mean a material adverse effect on the
business, property, assets, liabilities, operations, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole.
"Material Subsidiary" shall mean, at any time, any Subsidiary of the
Borrower that (x) has assets at such time comprising 5% or more of the
consolidated assets of the Borrower and its Subsidiaries or (y) had net income
in the most recently ended fiscal year of the Borrower comprising 5% or more of
the consolidated net income of the Borrower and its Subsidiaries for such fiscal
year.
"Maximum Swingline Amount" shall mean $5,000,000.
"Minimum Borrowing Amount" shall mean (i) for Term Loans and Revolving
Loans maintained as Base Rate Loans, $500,000, (ii) for Term Loans and Revolving
Loans maintained as Eurodollar Loans, $1,000,000 and (iii) for Swingline Loans,
$100,000.
"Mortgage Policies" shall have the meaning provided in Section
5.01(j)(iii).
"Mortgaged Properties" shall mean all Real Property designated as
Mortgaged Properties on Annex VI.
"Mortgages" shall have the meaning provided in Section 5.01(j)(iii).
["Xxxxxx" shall mean Xx. Xxxxxx X. Xxxxxx.]
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of expenses of sale (including payment of
principal, premium and interest of Indebtedness secured by the assets the
subject of the Asset Sale and required to be, and which is, repaid under the
terms thereof as a result of such Asset Sale), and incremental taxes paid or
payable as a result thereof.
"Non-Defaulting Lender" shall mean each Lender other than a Defaulting
Lender.
"Note" shall have the meaning provided in Section 1.05.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative Agent, the Collateral Agent or any Lender pursuant to the
terms of this Agreement or any other Credit Document.
-65-
"Participant" shall have the meaning provided in Section 2.05(a).
"Payment Office" shall mean the office of the Administrative Agent at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the
Administrative Agent may designate to the Borrower from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean any acquisition of property or
assets of a nature or type or which will be used in a business similar,
complementary or related to the nature or type of the property and assets of, or
the business of, the Borrower and its Subsidiaries existing on the date of such
investment (as determined in good faith by the Board of Directors of the
Borrower).
"Permitted Encumbrances" shall mean, with respect to the Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be reasonably acceptable to the Administrative Agent.
["Permitted Holders" means Xxxxx, the Designated Affiliates, the
Management Investors, Xxxxxx, any employee stock ownership plan established by
the Borrower for the benefit of the employees of the Borrower or any Subsidiary
and their Permitted Transferees.]
"Permitted Investment" shall mean any investment in a Person having
property and assets of a nature or type, or engaged in a business, similar,
complementary or related to the nature or type of the property and assets of, or
the business of, the Borrower and its Subsidiaries existing on the date of such
investment (as determined in good faith by the Board of Directors of the
Borrower), if as result of such investment (i) such Person becomes a Subsidiary
of the Borrower in which case such Subsidiary shall become a Subsidiary
Guarantor and shall deliver and become party to all Security Documents pursuant
to the requirements set forth in Section 7.11(b) or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys substantially
all of its assets to, or is liquidated into, the Borrower or a Subsidiary
Guarantor.
"Permitted Joint Venture" shall mean any Person (other than a
Subsidiary) in which the Borrower or any Subsidiary Guarantor shall invest for
the purpose of engaging in the direct marketing of products other than those
currently offered by the Borrower and its Subsidiaries.
"Permitted Liens" shall mean Liens described in clauses (a), (b), (d),
(f), (h), (j) and (l) of Section 8.03.
["Permitted Transferees" means (i) in the case of Xxxxx, (A) any
Designated Affiliate, (B) any managing director, general partner, limited
partner, director, officer or employee of Xxxxx or any Designated Affiliate
(collectively, "Xxxxx Associates"), (C) the heirs,
-66-
executors, administrators, testamentary trustees, legatees or beneficiaries of
any Xxxxx Associate and (D) any trust, the beneficiaries of which, or a
corporation or partnership, the stockholders or partners of which, include only
a Xxxxx Associate, his or her spouse, parents, siblings, direct lineal
descendants or adopted children, and (ii) in the case of any Management
Investors and Xxxxxx, (A) his or her executor, administrator, testamentary
trustee, legatee or beneficiaries, (B) his or her spouse, parents, siblings,
direct lineal descendants or adopted children or (C) a trust, the beneficiaries
of which, or a corporation or partnership, the stockholders or partners of
which, include only the Management Investor or Xxxxxx, as the case may be, and
his or her spouse, parents, siblings, direct lineal descendants and/or adopted
children.]
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"PIK Preferred Stock" shall mean the Borrower's pay-in-kind preferred
stock issued pursuant to the Certificate of the Designation Powers, Preferences
and Rights of Pay-In-Kind Preferred Stock, dated October 17, 1994.
"Plan" shall mean any multi-employer or single-employer plan as
defined in Section 4001 of ERISA, which is maintained or contributed to by (or
to which there is an obligation to contribute of) the Borrower, a Subsidiary or
an ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, a Subsidiary, or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pledge Agreements" shall have the meaning provided in Section
5.01(j)(i).
"Pledged Securities" shall mean all the Pledged Securities as defined
in the relevant Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"PSD Interest Period" shall mean an Interest Period commenced prior to
the Syndication Date, each of which Interest Periods must satisfy the
requirements of Section 1.09(iv).
"Quarter End Date" shall mean December 31 of each year and (i) March
27, June 26 and September 25 in 1999; (ii) April 1, July 1 and September 30 in
2000; (iii) March 31, June 30 and September 29 in 2001; (iv) ______, ________
and _______ in 2002; (v) .______, ________ and _______ in 2003; and (vi) ______,
________ and _______ in 2004;
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended,
-67-
42 U.S.C. (S) 6901 et seq.
-- ----
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"RC Lenders" shall mean each Lender with Revolving Commitment.
"Register" shall have the meaning provided in Section 12.16.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Reinvestment Assets" shall mean any assets to be employed in the
business of the Borrower and its Subsidiaries as described in Section 8.01,
provided all such assets may be acquired pursuant to Section 4.10 of the Senior
Subordinated Note Indenture so long as such Section is in effect.
"Reinvestment Election" shall have the meaning provided in Section
4.02(A)(c).
"Reinvestment Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects to use all or a specified portion of the Net Cash Proceeds
of an Asset Sale to purchase, construct or otherwise acquire Reinvestment
Assets.
"Reinvestment Prepayment Amount" shall mean, with respect to any
Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date
relating thereto by which (a) the Anticipated Reinvestment Amount in respect of
such Reinvestment Election exceeds (b) the aggregate amount thereof expended by
the Borrower and its Subsidiaries to acquire Reinvestment Assets.
"Reinvestment Prepayment Date" shall mean, with respect to any
Reinvestment Election, the earliest of (i) the date, if any, upon which the
Administrative Agent, on behalf of the Required Lenders, shall have delivered a
written termination notice to the Borrower, provided that such notice may only
be given while an Event of Default exists, (ii) the date occurring one year
after such Reinvestment Election and (iii) the date on which the Borrower shall
have determined not to, or shall have otherwise ceased to, proceed with the
purchase, construction or other acquisition of Reinvestment Assets with the
related Anticipated Reinvestment Amount.
"Relevant Determination Date" shall mean, at any time, the last day of
the then most recently ended fiscal quarter of the Borrower with respect to
which an officer's certificate
-68-
has been delivered to the Lenders pursuant to Section 7.01(e).
"Reportable Event" shall mean an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Required Lenders" shall mean Non-Defaulting Lenders whose outstanding
Term Loans and Revolving Commitments (or, if after the Total Revolving
Commitment has been terminated, Revolving Loans and Adjusted RC Percentages of
Letter of Credit Outstandings) constitute greater than 50% of the sum of (i) the
total outstanding Term Loans of Non-Defaulting Lenders and (ii) the Adjusted
Total Revolving Commitment (or, if after the Total Revolving Commitment has been
terminated, the aggregate outstanding Revolving Loans and Letter of Credit
Outstandings).
"Revolving Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Annex I hereto directly below
the column entitled "Revolving Commitment", as the same may be reduced from time
to time pursuant to Section 3.02, 3.03 and/or 9 or (y) adjusted from time to
time as a result of assignments to or from such Lender pursuant to Section
12.04.
"Revolving Facility" shall mean the Facility evidenced by the Total
Revolving Commitment.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Maturity Date" shall mean September 30, 2004.
"Revolving Percentage" shall mean at any time for each Lender with a
Revolving Commitment, the percentage obtained by dividing such Lender's
Revolving Commitment by the Total Revolving Commitment, provided that if the
Total Revolving Commitment has been terminated, the Revolving Percentage of each
Lender shall be determined by dividing such Lender's Revolving Commitment
immediately prior to such termination by the Total Revolving Commitment
immediately prior to such termination.
"Scheduled Repayment" shall have the meaning provided in Section
4.02(A)(b).
"SEC" shall have the meaning provided in Section 7.01(j).
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the relevant Security Agreement.
"Security Agreement" shall have the meaning provided in Section
5.01(j)(ii).
"Security Documents" shall mean each Pledge Agreement, each Security
-69-
Agreement, each Mortgage and each Additional Mortgage, if any.
"Senior Leverage Ratio" shall mean, at any date for the determination
thereof, the ratio of Consolidated Senior Debt on such date to Consolidated
EBITDA for the Test Period (taken as one accounting period) ending on such date.
"Senior Subordinated Note Documents" shall mean and include each of
the documents, instruments (including the Stub Senior Subordinated Notes) and
other agreements entered into by the Borrower (including, without limitation,
the Senior Subordinated Note Indenture) relating to the issuance by the Borrower
of the Senior Subordinated Notes as in effect on the Initial Borrowing Date and
as the same may be supplemented, amended or modified from time to time in
accordance with the terms hereof and thereof.
"Senior Subordinated Note Indenture" shall mean the Indenture entered
into by and between the Borrower and United States Trust Company of New York, as
trustee thereunder, with respect to the Senior Subordinated Notes, as amended
pursuant to the Tender, and as in effect on the Initial Borrowing Date and as
the same may be modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes
due 2002 issued by the Borrower under the Senior Subordinated Note Indenture.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Stated Amount" of each Letter of Credit shall mean the maximum
available to be drawn thereunder (regardless of whether any conditions for
drawing could then be met).
"Stub Senior Subordinated Notes" shall mean the Senior Subordinated
Notes that are outstanding immediately prior to the Initial Borrowing Date and
that are not redeemed pursuant to the Tender.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time. Unless otherwise
expressly provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Subsidiary Guarantors" shall mean (i) each Domestic Subsidiary of the
Borrower on the Initial Borrowing Date other than HCE and (ii) each Person that
becomes a Subsidiary Guarantor as required by the definition of Permitted
Investments.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.01(i).
-70-
"Swingline Expiry Date" shall mean the date which is five Business
Days prior to the Revolving Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Syndication Date" shall mean the earlier of (x) the date which is 90
days after the Initial Borrowing Date and (y) the date upon which the
Administrative Agent determines in its sole discretion (and notifies the
Borrower) that the primary syndication has been completed.
"Tax Forms" shall have the meaning provided in Section 4.04(b).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Tender" shall have the meaning provided in Section 5.01(n).
"Term Commitment" shall mean, with respect to each Lender, (i) the
amount, if any, set forth opposite such Lender's name on Annex I hereto directly
below the column entitled "Term Commitment" less (ii) the amount equal to such
Lender's TF Percentage times the outstanding principal amount of the Stub Senior
Subordinated Notes on the Initial Borrowing Date, as the same may be terminated
pursuant to Section 3.03.
"Term Facility" shall mean the Facility evidenced by the Total Term
Commitment.
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Test Period" shall mean for any determination the four consecutive
fiscal quarters of the Borrower then last ended (taken as one accounting
period).
"TF Lender" shall mean at any time each Lender with a Term Commitment
(or if the Total Term Commitment has been terminated, outstanding Term Loans) at
such time.
["TF Percentage" shall mean with respect to each Lender, the
percentage obtained by dividing (i) the amount, if any, set forth opposite such
Lender's name on Annex I hereto directly below the column entitled "Term
Commitment" by (ii) $110 million.]
"Total Bank Outstandings" shall mean, as at any date, the sum of (i)
the outstanding principal amount of Term Loans on such date plus (ii) the daily
average of the sum of (x) the outstanding principal amount of Revolving Loans
plus (y) Letter of Credit Outstanding during the 12 months ended on such date
(or if less during the period from the Initial Borrowing Date to such date).
"Total Term Commitment" shall mean the sum of the Term Commitments of
each of the Lenders.
"Total Commitment" shall mean the sum of the Total Term Commitment and
the Total Revolving Commitment.
-71-
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of each of the Lenders.
"Total Unutilized Revolving Commitment" shall mean, at any time, (i)
the Total Revolving Commitment at such time less (ii) the sum of the aggregate
principal amount of all Revolving Loans and Swingline Loans at such time plus
the Letter of Credit Outstandings at such time.
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Transaction" shall mean the initial public offering of the Borrower's
common stock referred to in Section 5.01(l), the redemption of the PIK Preferred
Stock referred to in Section 5.01(m) and the Tender for and redemption of the
Senior Subordinated Notes referred to in Section 5.01(n).
"Transaction Expenses" shall mean (i) the write-off of finance costs
incurred in connection with the 1997 reorganization of the Borrower and (ii) all
fees and expenses incurred in connection with, and payable prior to or
substantially concurrently with the consummation of the Transaction, and
including all fees paid to any of the Lenders and the Administrative Agent
hereunder, [all fees paid to Xxxxx & Company, Inc. or its Affiliates] and all
attorney's fees, accountants' fees and consultant fees, paid in connection with
the transactions contemplated by this Agreement. Transaction Expenses shall
include the amortization of any such fees and expenses that are capitalized and
not classified as an expense on the date incurred.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
----
"UCC" shall mean the Uniform Commercial Code.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year determined in accordance
with Statement of Financial Accounting Standards No. 35, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan, exceeds the fair market value of the assets thereof,
determined in accordance with Section 412 of the Code.
"Unpaid Drawing" shall have the meaning provided in Section 2.04(a).
"Unutilized Revolving Commitment" for any Lender with a Revolving
Commitment at any time shall mean the excess of (i) the Revolving Commitment of
such Lender over (ii) the sum of (x) the aggregate outstanding principal amount
of Revolving Loans made by such Lender plus (y) an amount equal to such Lender's
Revolving Percentage of the Letter of Credit Outstandings at such time.
"Voting Stock" shall mean, with respect to any corporation, the
outstanding stock of all classes (or equivalent interests) which ordinarily, in
the absence of contingencies, entitles
-72-
holders thereof to vote for the election of directors (or Persons performing
similar functions) of such corporation, even though the right so to vote has
been suspended by the happening of such a contingency.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' qualifying shares, is owned directly
or indirectly by such Person.
"Working Capital" shall mean the excess of Consolidated Current Assets
over Consolidated Current Liabilities.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile transmission, telegraph or
cable.
SECTION 11. The Agents.
----------
11.01 Appointment. The Lenders hereby designate BTCo as
-----------
Administrative Agent (for purposes of this Section 11, the term "Administrative
Agent" shall include BTCo in its capacity as Collateral Agent pursuant to the
Security Documents) and First Union as Documentation Agent, in each case to act
as specified herein and in the other Credit Documents. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Administrative Agent to take
such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Administrative Agent may perform any of its duties
hereunder by or through its respective officers, directors, agents, employees or
affiliates.
11.02 Nature of Duties. The Administrative Agent shall not have any
----------------
duties or responsibilities except those expressly set forth in this Agreement
and the Security Documents. Neither the Administrative Agent nor any of its
respective officers, directors, agents, employees or affiliates shall be liable
for any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Administrative
Agent shall be mechanical and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Lender or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.
11.03 Lack of Reliance on an Agent. Independently and without
----------------------------
reliance upon an Agent, each Lender and the holder of each Note, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Borrower
and its Subsidiaries in connection with the making and the continuance of the
-73-
Loans and the taking or not taking of any action in connection herewith and (ii)
its own appraisal of the creditworthiness of the Borrower and its Subsidiaries
and, except as expressly provided in this Agreement, neither Agent shall have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. Neither Agent shall be
responsible to any Lender or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower and its Subsidiaries or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of the Borrower and its Subsidiaries or the
existence or possible existence of any Default or Event of Default.
11.04 Certain Rights of the Administrative Agent. If the
------------------------------------------
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, neither any Lender nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders.
11.05 Reliance. The Administrative Agent shall be entitled to rely,
--------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
11.06 Indemnification. To the extent an Agent is not reimbursed and
---------------
indemnified by the Borrower, the Lenders will reimburse and indemnify such
Agent, in proportion to their respective "percentages" as used in determining
the Required Lenders, for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by such Agent in performing its respective duties hereunder
or under any other Credit Document, in any way relating to or arising out of
this Agreement or any other Credit Document; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from an Agent's gross negligence or willful misconduct.
-74-
11.07 Each Agent in Its Individual Capacity. With respect to its
-------------------------------------
obligation to make Loans under this Agreement, each Agent shall have the rights
and powers specified herein for a "Lender" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Lenders", "Required Lenders", "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include such Agent in its
individual capacity. The Agents may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any Credit
Party or any Affiliate of any Credit Party as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower or any other Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.
11.08 Holders. The Administrative Agent may deem and treat the payee
-------
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
11.09 Resignation. (a) The Administrative Agent may resign from the
-----------
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice to
the Borrower and the Lenders. Such resignation shall take effect upon the
appointment of a successor Administrative Agent pursuant to clauses (b) and (c)
below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower, shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder or thereunder until such time, if
any, as the Required Lenders appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 20th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.
(e) The Documentation Agent may resign at any time by giving written
notice thereof to the Borrower and the Administrative Agent.
SECTION 12. Miscellaneous.
-------------
-75-
12.01 Payment of Expenses, etc. The Borrower agrees to: (i) whether
-------------------------
or not the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the negotiation, preparation, execution and delivery of the Credit Documents and
the documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case LLP) and of each Agent and each of the Lenders in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for each Agent and for each of the Lenders);
(ii) pay and hold each of the Lenders harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes; and (iii)
indemnify each Lender (including in its capacity as an Agent or a Letter of
Credit Issuer), its officers, directors, employees, representatives and
administrative agents from and hold each of them harmless against any and all
losses, liabilities, claims, damages or expenses incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not any Agent or any
Lender is a party thereto and whether or not any such investigation, litigation
or other proceeding is between or among any Agent, any Lender, any Credit Party
or any third Person or otherwise) related to the entering into and/or
performance of any Document or the use of the proceeds of any Loans hereunder or
the consummation of any transactions contemplated in any Credit Document, and
(b) any such investigation, litigation or other proceeding relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the Borrower, any of its Subsidiaries or any
Real Property owned or operated by them, or the actual or alleged presence or
release of Hazardous Materials on, under or from any Real Property at any time
owned or operated by Holdings or any of its Subsidiaries, and in each case
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
12.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Credit Party or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Lender (including, without limitation, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of any Credit Party against and on account of the Obligations and
liabilities of such Credit Party to such Lender under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations of such Credit Party purchased by such Lender pursuant to Section
12.06(b), and all other claims of any nature or description arising out of or
connected with this Agreement or any other Credit Document, irrespective of
whether or not such Lender shall have made any demand hereunder
-76-
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to a Credit Party, at
the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Lender, at its address specified
for such Lender on Annex II hereto; or, at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, and shall be effective when
received.
12.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto, provided that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Lenders. Each Lender may at any time grant participations in any
of its rights hereunder or under any of the Notes to another financial
institution, provided that in the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
Sections 1.10 and 4.04 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered into or
sold, and, provided further that no Lender shall transfer, grant or assign any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Letter of Credit (unless such Letter of Credit is not
extended beyond the Final Maturity Date) in which such participant is
participating (it being understood that any waiver of the application of any
prepayment or the method of any application of any prepayment to, the
amortization of the Term Loans shall not constitute an extension of the final
maturity date), or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with a waiver of the applicability of any
post-default increase in interest rates), or reduce the principal amount
thereof, or increase such participant's participating interest in any Commitment
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitment,
or a mandatory prepayment, shall not constitute a change in the terms of any
Commitment), (ii) release any Subsidiary Guarantor from its obligations under
the Subsidiary Guaranty except in accordance with the terms thereof, (iii)
release all or substantially all of the Collateral or (iv) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement or any other Credit Document.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
portion of its outstanding Term Loans and/or Revolving Commitment and its rights
and obligations
-77-
hereunder to another Lender, and (y) with the consent of the Administrative
Agent (which consent shall not be unreasonably withheld), any Lender may assign
all or a portion of its outstanding Term Loans and/or Revolving Commitment and
its rights and obligations hereunder to one or more commercial Lenders or other
financial institutions (including one or more Lenders). No assignment pursuant
to the immediately preceding sentence shall to the extent such assignment
represents an assignment to an institution other than one or more Lenders
hereunder, be in an aggregate amount less than $5,000,000 unless the entire
Commitment of the assigning Lender is so assigned. If any Lender so sells or
assigns all or a part of its rights hereunder or under the Notes, any reference
in this Agreement or the Notes to such assigning Lender shall thereafter refer
to such Lender and to the respective assignee to the extent of their respective
interests and the respective assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights and benefits as
it would if it were such assigning Lender. Each assignment pursuant to this
Section 12.04(b) shall be effected by the assigning Lender and the assignee
Lender executing an Assignment Agreement substantially in the form of Exhibit L
(appropriately completed). At the time of any such assignment, (i) either the
assigning or the assignee Lender shall pay to the Administrative Agent a
nonrefundable assignment fee of $3,500, (ii) Annex I shall be deemed to be
amended to reflect the Commitment of the respective assignee (which shall result
in a direct reduction to the Commitment of the assigning Lender) and of the
other Lenders, and (iii) upon the request of the assignee and/or assigning
Lender, the Borrower will issue Notes to the respective assignee and/or to the
assigning Lender in conformity with the requirements of Section 1.05. Each
Lender and the Borrower agree to execute such documents (including without
limitation amendments to this Agreement and the other Credit Documents) as shall
be necessary to effect the foregoing. Nothing in this clause (b) shall prevent
or prohibit any Lender from pledging its Notes or Loans to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve
Bank.
(c) Notwithstanding any other provisions of this Section 12.04, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration statement
with the SEC or to qualify the Loans under the "Blue Sky" laws of any State.
(d) Each Lender initially party to this Agreement hereby represents,
and each Person that became a Lender pursuant to an assignment permitted by this
Section 12 will, upon its becoming party to this Agreement, represent that it is
a commercial lender, other financial institution or other "accredited" investor
(as defined in SEC Regulation D) which makes loans in the ordinary course of its
business and that it will make or acquire Loans for its own account in the
ordinary course of such business, provided that subject to the preceding clauses
(a) and (b), the disposition of any promissory notes or other evidences of or
interests in Indebtedness held by such Lender shall at all times be within its
exclusive control.
12.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of any Agent or any Lender in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and any Agent or any Lender shall operate as a waiver thereof;
nor shall any single or partial exercise of any right,
-78-
power or privilege hereunder or under any other Credit Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which any
Agent or any Lender would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Agents or the Lenders to any other or further action in any circumstances
without notice or demand.
12.06 Payments Pro Rata. (a) The Administrative Agent agrees that
-----------------
promptly after its receipt of each payment from or on behalf of any Credit Party
in respect of any Obligations of such Credit Party hereunder, it shall
distribute such payment to the Lenders (other than any Lender that has expressly
waived its right to receive its pro rata share thereof) pro rata based upon
--- ----
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or Lender's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all of the Lenders in such
amount, provided that if all or any portion of such excess amount is thereafter
recovered from such Lender, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 12.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
12.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders), provided that (x) except as otherwise
specifically provided herein, all computations determining compliance with
Section 8, including definitions used therein, shall utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the December 31, 1998 historical
financial statements of the Borrower delivered to the Lenders pursuant to
Section 6.10(b) and (y) that if at any time the computations determining
compliance with Section 8 utilize accounting principles different from those
utilized in the financial statements furnished to the Lenders, such financial
statements shall be accompanied by reconciliation work-sheets.
-79-
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of
-----------------------------------------------------------
Jury Trial. (a) This Agreement and the other Credit Documents and the rights
----------
and obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the law of the state of New York. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the courts of the State of New York or of the United States
for the Southern District of New York, and, by execution and delivery of this
Agreement, each Credit Party hereby irrevocably accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts. Each Credit Party further irrevocably consents to the service
of process out of any of the aforementioned courts in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to each Credit Party located outside New York City and by hand
delivery to each Credit Party located within New York City, at its address for
notices pursuant to Section 12.03, such service to become effective 30 days
after such mailing. Each Credit Party hereby irrevocably designates appoints
and empowers CT Corporation System, with offices on the date hereof located at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its agent for service of process in
respect of any such action or proceeding. Nothing herein shall affect the right
of any Agent, any Lender to serve process in any other manner permitted by law
or to commence legal proceedings or otherwise proceed against any Credit Party
in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) Each of the parties to this agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this agreement, the other credit documents or the
transactions contemplated hereby or thereby.
12.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which the Borrower, each Agent and each of the
Lenders shall have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent at the Notice
Office of the Administrative Agent or, in the case of the Lenders, shall have
given to the Administrative Agent telephonic (confirmed in writing), written,
telex or facsimile transmission notice (actually received) at such office that
the same has been
-80-
signed and mailed to it.
12.11 Headings Descriptive. The headings of the several sections and
--------------------
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 Amendment or Waiver. Neither this Agreement nor any other
-------------------
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower and the Required Lenders, provided that no
such change, waiver, discharge or termination shall, without the consent of each
Lender (other than a Defaulting Lender) directly affected thereby, (i) extend
the Final Maturity Date, (it being understood that any waiver of the application
of any prepayment of or the method of application of any prepayment to the
amortization of, the Loans shall not constitute any such extension), or reduce
the rate or extend the time of payment of interest (other than as a result of
waiving the applicability of any post-default increase in interest rates) or
Fees thereon, or reduce the principal amount thereof, or increase the Commitment
of any Lender over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of any Commitment of
any Lender), (ii) release or permit the release of all or substantially all of
the Collateral or release any Subsidiary Guarantor from the Subsidiary Guaranty
(in each case except as expressly provided in the Credit Documents), (iii)
amend, modify or waive any provision of this Section, (iv) reduce the percentage
specified in, or otherwise modify, the definition of Required Lenders or (v)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. No provision of Section 2 or 11 may be
amended without the consent of the Letter of Credit Issuer or the Administrative
Agent, respectively.
12.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Section 1.10, 1.11, 4.04, 11.07 or 12.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
12.14 Domicile of Loans. Each Lender may transfer and carry its
-----------------
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Lender, provided that the Borrower shall not be responsible for costs
arising under Section 1.10 or 4.04 resulting from any such transfer (other than
a transfer pursuant to Section 1.12) to the extent not otherwise applicable to
such Lender prior to such transfer.
12.15 Confidentiality. Subject to Section 12.04, the Lenders shall
---------------
hold all non-public information obtained pursuant to the requirements of this
Agreement which has been identified as such by the Borrower in accordance with
its customary procedure for handling confidential information of this nature and
in accordance with safe and sound banking practices and in any event may make
disclosure reasonably required by any bona fide transferee or participant in
---- ----
connection with the contemplated transfer of any Loans or participation therein
(so long as such transferee or participant agrees to be bound by the provisions
of this Section 12.15) or as required or requested by any governmental agency or
representative thereof or pursuant to
-81-
legal process, provided that, unless specifically prohibited by applicable law
--------
or court order, each Lender shall notify the Borrower of any request by any
governmental agency or representative thereof (other than any such request in
connection with an examination of the financial condition of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information, and provided further that in no event shall any
----------------
Lender be obligated or required to return any materials furnished by the
Borrower or any Subsidiary.
12.16 Register. The Borrower hereby designates the Administrative
--------
Agent to serve as its agent, solely for purposes of this Section 12.16, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender. Failure to make any such recordation, or any error in such recordation,
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Lender, the transfer of any Term Loan or the Revolving Commitment
of such Lender and the rights to the principal of, and interest on, any Loan
made pursuant to such Revolving Commitment shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent with
respect to ownership of such Commitment and/or Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitment
and/or Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitment and/or Loans shall be
recorded by the Administrative Agent on the Lender Register only upon the
acceptance by the Administrative Agent of a properly executed and delivered
Assignment Agreement pursuant to Section 12.04(b). The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 12.16 other than those resulting from the Administrative Agent's
willful misconduct or gross negligence.
* * *
-82-
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
0000 Xxxxxxxx Xxxxx XXX DIRECT, INC.
Xxxxxxxx, Xxxxxxxxxxxx 00000 as Borrower
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000 By________________________________
Facsimile: (000) 000-0000 Name:
Title:
BANKERS TRUST COMPANY,
Individually and as Administrative
Agent
By________________________________
Name:
Title:
-83-
Annex I
-------
COMMITMENTS
-----------
Term Revolving
Lender Commitment Commitment
------ ---------- ----------
Bankers Trust Company
Total: [$110,000,000] $ 25,000,000
============ ============
Annex II
--------
LENDER ADDRESSES
----------------
Bankers Trust Company 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx Xxxxx
Tel. No.:000-000-0000
Fax No.:000-000-0000
Annex III
Page 86
EXISTING LETTERS OF CREDIT
--------------------------
[TO BE COMPLETED BY BORROWER]
Annex IV
Page 87
GOVERNMENT APPROVALS
--------------------
[TO BE COMPLETED BY BORROWER]
Annex V
Page 88
SUBSIDIARIES
------------
[TO BE COMPLETED BY BORROWER]
Annex VI
Page 89
PROPERTIES
----------
[TO BE COMPLETED BY BORROWER]
Annex VII
Page 90
EXISTING INDEBTEDNESS
---------------------
[TO BE COMPLETED BY BORROWER]
Annex VIII
Page 91
INSURANCE POLICIES
------------------
[TO BE COMPLETED BY BORROWER]
Annex IX
Page 92
EXISTING LIENS
--------------
[TO BE COMPLETED BY BORROWER]
MANAGEMENT FEES
---------------
[TO BE COMPLETED BY BORROWER]
TABLE OF CONTENTS
-----------------
SECTION 1. Amount and Terms of Credit 1
1.01 Commitment 1
1.02 Minimum Borrowing Amounts, etc 3
1.03 Notice of Borrowing 3
1.04 Disbursement of Funds 4
1.05 Register 4
1.06 Conversions 5
1.07 Pro Rata Borrowings 5
1.08 Interest 5
1.09 Interest Periods 6
1.10 Increased Costs, Illegality, etc 7
1.11 Compensation 9
1.12 Change of Lending Office 10
1.13 Replacement of Lenders 10
SECTION 2. Letters of Credit 11
2.01 Letters of Credit 11
2.02 Minimum Stated Amount 12
2.03 Letter of Credit Requests; Notices of Issuance 12
2.04 Agreement to Repay Letter of Credit Drawings 12
2.05 Letter of Credit Participations 13
2.06 Increased Costs 15
SECTION 3. Fees; Commitments 16
3.01 Fees 16
3.02 Voluntary Reduction of Commitments 16
3.03 Mandatory Adjustments of Commitments, etc. 17
SECTION 4. Payments 17
4.01 Voluntary Prepayments 17
4.02 Mandatory Prepayments 18
4.03 Method and Place of Payment 21
4.04 Net Payments 21
(94)
SECTION 5. Conditions Precedent 23
5.01 Conditions Precedent to Loans on the Initial Borrowing
Date 23
5.02 Conditions Precedent to All Credit Events 27
SECTION 6. Representations, Warranties and Agreements 27
6.01 Corporate Status 28
6.02 Corporate Power and Authority 28
6.03 No Violation 28
6.04 Litigation . 28
6.05 Use of Proceeds; Margin Regulations 28
6.06 Governmental Approvals 29
6.07 Investment Company Act 29
6.08 Public Utility Holding Company Act 29
6.09 True and Complete Disclosure 29
6.10 Financial Condition; Financial Statements 30
6.11 Security Interests 30
6.12 Tax Returns and Payments 31
6.13 Compliance with ERISA 31
6.14 Subsidiaries 32
6.15 Patents, etc 32
6.16 Pollution and Other Regulations 32
6.17 Properties 33
6.18 Labor Relations 33
6.19 Senior Subordinated Notes 33
6.20 Existing Indebtedness 33
SECTION 7. Affirmative Covenants 34
7.01 Information Covenants 34
7.02 Books, Records and Inspections 36
7.03 Insurance 37
7.04 Payment of Taxes 37
7.05 Consolidated Corporate Franchises 37
7.06 Compliance with Statutes, etc 37
7.07 ERISA 37
7.08 Good Repair 38
7.09 End of Fiscal Years; Fiscal Quarters 38
7.10 Use of Proceeds 38
7.11 Additional Security; Further Assurances 38
7.12 Compliance with Environmental Laws 39
7.13 Interest Rate Agreements 39
SECTION 8. Negative Covenants 40
8.01 Changes in Business 40
(95)
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc 40
8.03 Liens 41
8.04 Indebtedness 43
8.05 Capital Expenditures 43
8.06 Advances, Investments and Loans 44
8.07 Leases 45
8.08 Prepayments of Indebtedness, etc. 45
8.09 Dividends, etc 45
8.10 Transactions with Affiliates 47
8.11 Fixed Charge Coverage Ratio 47
8.12 Senior Leverage Ratio 47
8.13 Issuance of Stock 47
SECTION 9. Events of Default 48
9.01 Payments 48
9.02 Representations, etc. 48
9.03 Covenants 48
9.04 Default Under Other Agreements 48
9.05 Bankruptcy, etc 48
9.06 ERISA 49
9.07 Security Documents 49
9.08 Subsidiary Guaranty 49
9.09 Judgments 49
SECTION 10. Definitions 50
SECTION 11. The Agents 71
11.01 Appointment 71
11.02 Nature of Duties 71
11.03 Lack of Reliance on an Agent 72
11.04 Certain Rights of the Administrative Agent 72
11.05 Reliance 72
11.06 Indemnification 73
11.07 Each Agent in Its Individual Capacity 73
11.08 Holders 73
11.09 Resignation 73
SECTION 12. Miscellanoes
12.01 Payment of Expenses, etc. 74
12.02 Right of Setoff 74
12.03 Notices 75
12.04 Benefit of Agreement 75
12.05 No Waiver; Remedies Cumulative 77
12.06 Payments Pro Rata 77
(96)
12.07 Calculations; Computations 77
12.08 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial 78
12.09 Counterparts 78
12.10 Effectiveness 79
12.11 Headings Descriptive 79
12.12 Amendment or Waiver 79
12.13 Survival 79
12.14 Domicile of Loans 79
12.15 Confidentiality 79
12.16 Register 80
ANNEX I - Commitments
ANNEX II - Lender Addresses
ANNEX III - Existing Letters of Credit
ANNEX IV - Government Approvals
ANNEX V - Subsidiaries
ANNEX VI - Properties
ANNEX VII - Existing Indebtedness
ANNEX VIII - Insurance Policies
ANNEX IX - Existing Liens
[ANNEX X - Management Fees]
EXHIBIT A - Form of Notice of Borrowing
EXHIBIT B-1 - Form of Term Note
EXHIBIT B-2 - Form of Revolving Note
EXHIBIT B-3 - Form of Swingline Note
EXHIBIT C - Form of Letter of Credit Request
EXHIBIT D-1 - Form of Opinion of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
EXHIBIT D-2 - Form of Opinion of White & Case LLP
EXHIBIT E - Form of Officers' Certificate
[EXHIBIT F - Form of Borrowing Base Certificate]
EXHIBIT G - Form of Subsidiary Guaranty
EXHIBIT H-1 - Form of Borrower Pledge Agreement
EXHIBIT H-2 - Form of Subsidiary Guarantor Pledge Agreement
EXHIBIT I-1 - Form of Borrower Security Agreement
EXHIBIT I-2 - Form of Subsidiary Guarantor Security Agreement
EXHIBIT J - Form of Solvency Certificate
EXHIBIT K - Form of Consent Letter
EXHIBIT L - Form of Assignment Agreement
(97)
