$345,000,000
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 6, 2000
AMONG
AUTOTOTE CORPORATION,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent,
XXXXXX COMMERCIAL PAPER INC.,
as Documentation Agent,
and
DLJ CAPITAL FUNDING, INC.,
as Administrative Agent
LEAD ARRANGER and SOLE BOOK RUNNING MANAGER:
DLJ CAPITAL FUNDING, INC.
CO-ARRANGER:
XXXXXX BROTHERS INC.
EXECUTION
$345,000,000
AUTOTOTE CORPORATION
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
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Section 1. DEFINITIONS.......................................................2
1.1 Defined Terms.....................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.....................................34
1.3 Other Definitional Provisions and Rules of Construction..........34
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.......................35
2.1 Commitments; Making of Loans; Notes..............................35
2.2 Interest on the Loans............................................44
2.3 Fees.............................................................48
2.4 Repayments, Prepayments and Reductions in Loan Commitments;
General Provisions Regarding Payments............................49
2.5 Use of Proceeds..................................................59
2.6 Special Provisions Governing LIBO Rate Loans.....................60
2.7 Increased Costs; Taxes; Capital Adequacy.........................62
2.8 Obligation of Lenders and Issuing Lenders to Mitigate;
Replacement of Lender............................................66
Section 3. LETTERS OF CREDIT................................................67
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein...........................................67
3.2 Letter of Credit Fees............................................71
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of
Credit ..........................................................71
3.4 Obligations Absolute.............................................74
3.5 Indemnification; Nature of Issuing Lenders' Duties...............75
3.6 Increased Costs and Taxes Relating to Letters of Credit..........76
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT........................77
4.1 Conditions to Initial Loans......................................77
4.2 Conditions to All Loans..........................................88
4.3 Conditions to Letters of Credit..................................89
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES.........................89
EXECUTION
Page
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5.1 Organization, Powers, Qualification, Good Standing, Business
and Subsidiaries.................................................89
5.2 Authorization of Borrowing, etc..................................90
5.3 Financial Condition..............................................91
5.4 No Material Adverse Change; No Restricted Junior Payments........92
5.5 Title to Properties; Liens; Real Property........................92
5.6 Litigation; Adverse Facts........................................93
5.7 Payment of Taxes.................................................93
5.8 Performance of Agreements; Materially Adverse Agreements.........93
5.9 Governmental Regulation..........................................94
5.10 Securities Activities............................................94
5.11 Employee Benefit Plans...........................................94
5.12 Certain Fees.....................................................95
5.13 Environmental Protection.........................................95
5.14 Employee Matters.................................................96
5.15 Solvency.........................................................96
5.16 Matters Relating to Collateral...................................97
5.17 Related Agreements...............................................97
5.18 Disclosure.......................................................98
5.19 Certain Jurisdictions............................................98
Section 6. COMPANY'S AFFIRMATIVE COVENANTS..................................98
6.1 Financial Statements and Other Reports...........................98
6.2 Legal Existence, etc............................................104
6.3 Payment of Taxes and Claims; Tax Consolidation..................104
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds.................................105
6.5 Inspection Rights; Lender Meeting...............................107
6.6 Compliance with Laws, etc.......................................108
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.......108
6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries; IP Collateral ....................................110
6.9 Leasehold Properties; Matters Relating to Additional Real
Property Collateral; Certain Opinions; Removal of Liens ........112
ii EXECUTION
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6.10 Interest Rate Protection........................................116
6.11 Fiscal Year.....................................................116
6.12 Connecticut Lottery Corporation.................................116
6.13 Delisting.......................................................116
Section 7. COMPANY'S NEGATIVE COVENANTS....................................116
7.1 Indebtedness....................................................116
7.2 Liens and Related Matters.......................................118
7.3 Investments; Joint Ventures.....................................122
7.4 Contingent Obligations..........................................123
7.5 Restricted Junior Payments......................................125
7.6 Financial Covenants.............................................125
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions ...................................................128
7.8 Consolidated Capital Expenditures...............................130
7.9 Sales and Lease-Backs...........................................131
7.10 Sale or Discount of Receivables.................................131
7.11 Transactions with Stockholders and Affiliates...................132
7.12 Disposal of Subsidiary Equity...................................132
7.13 Conduct of Business.............................................133
7.14 Amendments or Waivers of Related Agreements.....................133
7.15 Fiscal Year.....................................................134
7.16 Consolidated Capital Software Expenditures......................134
7.17 Margin Stock....................................................134
Section 8. EVENTS OF DEFAULT...............................................135
8.1 Failure to Make Payments When Due...............................135
8.2 Default in Other Agreements.....................................135
8.3 Breach of Certain Covenants.....................................135
8.4 Breach of Warranty..............................................135
8.5 Other Defaults Under Loan Documents.............................135
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc............136
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc..............136
8.8 Judgments and Attachments.......................................136
8.9 Dissolution.....................................................137
8.10 Employee Benefit Plans..........................................137
iii EXECUTION
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8.11 Change in Control...............................................137
8.12 Invalidity of Guaranties; Failure of Security; Repudiation of
Obligations ....................................................137
Section 9. THE AGENTS......................................................138
9.1 Appointment.....................................................138
9.2 Powers and Duties; General Immunity.............................139
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness...................................141
9.4 Right to Indemnity..............................................141
9.5 Successor Agents and Swing Line Lender..........................142
9.6 Collateral Documents and Guaranties.............................142
Section 10. MISCELLANEOUS .................................................143
10.1 Successors and Assigns..........................................143
10.2 Expenses........................................................145
10.3 Indemnity.......................................................146
10.4 Set-Off; Security Interest in Deposit Accounts..................147
10.5 Ratable Sharing.................................................147
10.6 Amendments and Waivers..........................................148
10.7 Independence of Covenants.......................................150
10.8 Notices.........................................................150
10.9 Survival of Representations, Warranties and Agreements..........150
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative...........150
10.11 Marshalling; Payments Set Aside.................................151
10.12 Severability....................................................151
10.13 Obligations Several; Independent Nature of Lenders' Rights......151
10.14 Headings........................................................151
10.15 Applicable Law..................................................151
10.17 Consent to Jurisdiction and Service of Process..................152
10.18 Waiver of Jury Trial............................................152
10.19 Confidentiality.................................................153
10.20 Counterparts; Effectiveness.....................................153
Signature pages.......................................................S-1
iv EXECUTION
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
IV-A FORM OF TRANCHE A TERM NOTE
IV-B FORM OF TRANCHE B TERM NOTE
IV-C FORM OF REVOLVING NOTE
IV-D FORM OF SWING LINE NOTE
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF FINANCIAL CONDITION CERTIFICATE
VII-A FORM OF CLOSING DATE OPINION OF XXXXXX XXXXX XXXXXXXX & XXXXXXX
L.L.P
VII-B FORM OF CLOSING DATE OPINION OF XXXXX, XXXXXXXX & XXXXXXX, LLP
VII-C FORM OF CLOSING DATE OPINION OF SILLS, CUMMIS, RADIN, TISCHMAN,
XXXXXXX & GROSS P.A.
VII-D FORM OF CLOSING DATE OPINION OF TOBIN, CARBERRY, X'XXXXXX, XXXXX &
XXXXXXXX, P.C.
VII-E FORM OF CLOSING DATE OPINION OF XXXXXX XXXXXX
VII-F FORM OF CLOSING DATE OPINION OF XXXXXX X. XXXXXXX, ESQ.
VII-G FORM OF CLOSING DATE OPINION OF C. XXXX XXXXXX, ESQ.
VIII FORM OF OPINION OF O'MELVENY & XXXXX LLP
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI INTENTIONALLY OMITTED
XII FORM OF SECURITY AGREEMENT
v EXECUTION
XIII FORM OF SUBSIDIARY GUARANTY
XIV FORM OF AGREEMENT OF JOINDER
XV FORM OF COLLATERAL ACCESS AGREEMENT
vi EXECUTION
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.6 LITIGATION
5.13 ENVIRONMENTAL MATTERS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.2C(a) CERTAIN EXISTING AGREEMENTS WITH GOVERNMENTAL AUTHORITIES
PROHIBITING THE ASSUMPTION OR CREATION OF LIENS
7.2C(e) EXISTING RIGHTS OF FIRST REFUSAL WITH RESPECT TO INTERESTS IN
CERTAIN SUBSIDIARIES AND JOINT VENTURES
7.2C(g) CERTAIN AGREEMENTS PROHIBITING THE CREATION OR ASSUMPTION OF ANY
LIEN ON ASSETS
7.2D(a) CERTAIN EXISTING AGREEMENTS WITH GOVERNMENTAL AUTHORITIES
RESTRICTING THE ABILITY TO TRANSFER ASSETS
7.2D(c) CERTAIN AGREEMENTS RESTRICTING THE PAYMENT OF DIVIDENDS AND THE
MAKING OF DISTRIBUTIONS ON EQUITY INTERESTS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.11(vi) TRANSACTIONS WITH AFFILIATES
vii EXECUTION
$345,000,000
AUTOTOTE CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of September 6, 2000, and entered
into by and among AUTOTOTE CORPORATION, a Delaware corporation ("Company"), THE
LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "Lenders"), DLJ CAPITAL FUNDING, INC.
("DLJ"), as administrative agent for Lenders (in such capacity, "Administrative
Agent"), DLJ, as syndication agent for Lenders (in such capacity, "Syndication
Agent"), Lead Arranger and Sole Book Running Manager, XXXXXX COMMERCIAL PAPER
INC., ("LCPI"), as documentation agent for Lenders (in such capacity,
"Documentation Agent"), and XXXXXX BROTHERS INC. ("Xxxxxx") as Co-Arranger.
Capitalized terms used herein without definition shall have the meanings set
forth therefor in subsection 1.1 of this Agreement.
R E C I T A L S
WHEREAS, Company has formed Acquisition Co. for the purpose of
acquiring all the outstanding shares of Scientific Games Common Stock;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Company to be used for the purposes of providing funds for (i) the Acquisition
Financing Requirements, (ii) working capital and other general purposes of
Company and its Subsidiaries, and (iii) issuing Letters of Credit for the
purposes set forth herein;
WHEREAS, on the Closing Date, Company will secure all of the
Obligations hereunder and under the other Loan Documents by granting to
Administrative Agent, on behalf of Lenders, a First Priority Lien on
substantially all of its personal, real and mixed property, including a pledge
of all of the capital stock of its existing Domestic Subsidiaries and a pledge
of 65% of the capital stock of its existing direct Foreign Subsidiaries (other
than Inactive Subsidiaries);
WHEREAS, on the Closing Date, all of Company's existing wholly-owned
Domestic Subsidiaries will guarantee the Obligations hereunder and under the
other Loan Documents and each of such existing wholly-owned Domestic
Subsidiaries will secure its guaranty by granting to Administrative Agent, on
behalf of Lenders, a First Priority Lien on substantially all of its respective
personal, real and mixed property, including a pledge of all of the capital
stock of each of its existing Domestic Subsidiaries and 65% of the capital stock
of each of its existing direct Foreign Subsidiaries (other than Inactive
Subsidiaries);
1 EXECUTION
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders and the Agents agree
as follows:
Section 1. DEFINITIONS
.1 Defined Terms.
The following terms used in this Agreement shall have the following
meanings:
"Acquired Business" has the meaning assigned to that term in the
definition of "Permitted Acquisition" in this subsection 1.1.
"Acquisition Co." means ATX Enterprises, Inc., a Delaware corporation and
wholly-owned Subsidiary of Company.
"Acquisition Financing Requirements" means the aggregate of all amounts
necessary (i) to finance the purchase price for all of the outstanding shares of
Scientific Games Common Stock (and the retirement of all outstanding stock
options (including related withholding tax with respect to the exercise of such
options)) pursuant to the Merger in an aggregate amount of approximately $307.7
million; (ii) to repay in full the Existing Company Bank Debt in an aggregate
principal amount of approximately $36.0 million; (iii) to repay Existing Company
Senior Notes in an aggregate principal amount of $110 million; (iv) to repay the
Existing Company Convertible Debt in an aggregate principal amount of $35
million; (v) to pay the Tender Premiums in an amount not to exceed $9.5 million;
(vi) to repay in full the Existing Scientific Games Bank Debt in an aggregate
principal amount of approximately $25.0 million; (vii) to pay accrued interest
on existing Indebtedness in the approximate amount of $1.8 million; (viii) to
cash collateralize the Existing Letters of Credit in an aggregate amount not to
exceed $1.4 million; and (ix) to pay Transaction Costs in an amount not to
exceed $30.1 million.
"Additional Mortgaged Property" has the meaning assigned to that term in
subsection 6.9.
"Additional Mortgages" has the meaning assigned to that term in subsection
6.9.
"Adjusted Consolidated Net Income" means, for any period, the net income
(or loss) of Company 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 therefrom (i) the income (or loss) of any
Person (other than a Subsidiary of Company) in which any other Person (other
than Company or any of its Subsidiaries) has a joint interest, except to the
extent of the amount of dividends or other distributions actually paid to
Company or any of its Subsidiaries by such Person during such period, (ii)
except as otherwise expressly permitted under this Agreement, the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of Company
or is merged into or consolidated with Company or any of its Subsidiaries or
that Person's assets are acquired by Company or any of its Subsidiaries and
(iii) the income of any Subsidiary of Company 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; provided that the
foregoing clause (iii) shall
2 EXECUTION
not apply with respect to the income of any Foreign Subsidiary of Company to the
extent that the restriction on the declaration or payment of dividends or
similar distributions by that Foreign Subsidiary of that income is permitted by
subsection 7.2C(c) or 7.2D(d).
"Adjusted LIBO Rate" means, for any Interest Rate Determination Date with
respect to an Interest Period for a LIBO Rate Loan, the rate per annum obtained
by dividing (i) the rate per annum (rounded upward to the nearest 1/16 of one
percent) which appears on the British Bankers Association Telerate page 3750 (or
such other comparable page as may, in the reasonable opinion of the
Administrative Agent with the consent of Company (which consent shall not be
unreasonably withheld or delayed), replace such page for the purpose of
displaying such rate), at which Dollar deposits with a maturity comparable to
such Interest Period as of approximately 11:00 a.m. (London time) on such
Interest Rate Determination Date by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable on such Interest
Rate Determination Date 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).
"Administrative Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"Affected Class" has the meaning assigned to that term in subsection 10.6.
"Affected Lender" has the meaning assigned to that term in subsection
2.6C.
"Affiliate", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"Agents" means, collectively, the Syndication Agent, the Documentation
Agent and the Administrative Agent and any Supplemental Collateral Agents (as
defined in subsection 9.1B).
"Agreement" means this Credit Agreement dated as of September 6, 2000 and
all the exhibits and schedules hereto, as it may be amended, supplemented or
otherwise modified from time to time.
"Annualized" means (i) with respect to the Fiscal Quarter of Company
ending September 30, 2000, (x) the applicable amount for the period from and
including the Closing Date through and including September 30, 2000 multiplied
by (y) (i) 360 divided by (ii) the number of days from and including the Closing
Date through and including September 30, 2000, (ii) with respect to the Fiscal
Quarter of Company ending December 31, 2000, (x) the applicable amount for the
period from and including the Closing Date through and including December 31,
2000 multiplied by (y) (i) 360 divided by (ii) the number of days from and
including the Closing Date through and including December 31, 2000, and (iii)
with respect to the Fiscal Quarter of Company ending March 31, 2001, (x) the
applicable amount for the period from and including the Closing Date through and
3 EXECUTION
including March 31, 2001 multiplied by (y) (i) 360 divided by (ii) the number of
days from and including the Closing Date through and including March 31, 2001.
"Applicable Base Rate Margin" means, as at any date of determination, (i)
with respect to Tranche B Term Loans, 3.00% per annum, and (ii) with respect to
Tranche A Term Loans and Revolving Loans, a percentage per annum as set forth
below opposite the applicable Consolidated Leverage Ratio calculated on a Pro
Forma Basis:
Consolidated Leverage Ratio Applicable Base Rate Margin
---------------------------------------------------------------
greater than or equal to 5.00:1.00 2.50%
less than 5.00:1.00 but greater
than or equal to 4.50:1.00 2.25%
less than 4.50:1.00 but greater
than or equal to 4.00:1.00 2.00%
less than 4.00:1.00 but greater
than or equal to 3.50:1.00 1.75%
less than 3.50:1.00 but greater
than or equal to 3.00:1.00 1.50%
less than 3.00:1.00 1.25%
; provided that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1 (xviii) after the
six-month anniversary of the Closing Date, the Applicable Base Rate Margin for
Tranche A Term Loans and Revolving Loans that are Base Rate Loans shall be 2.25%
per annum.
"Applicable LIBO Rate Margin" means, as at any date of determination, (i)
with respect to Tranche B Term Loans, 4.25% per annum, and (ii) with respect to
Tranche A Term Loans and Revolving Loans, a percentage per annum as set forth
below opposite the applicable Consolidated Leverage Ratio calculated on a Pro
Forma Basis:
Consolidated Leverage Ratio Applicable LIBO Rate Margin
-------------------------------------------------------------
greater than or equal to 5.00:1.00 3.75%
less than 5.00:1.00 but greater
than or equal to 4.50:1.00 3.50%
less than 4.50:1.00 but greater
than or equal to 4.00:1.00 3.25%
less than 4.00:1.00 but greater
than or equal to 3.50:1.00 3.00%
4 EXECUTION
Consolidated Leverage Ratio Applicable LIBO Rate Margin
-------------------------------------------------------------
less than 3.50:1.00 but greater
than or equal to 3.00:1.00 2.75%
less than 3.00:1.00 2.50%
; provided that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1 (xviii) after the
six-month anniversary of the Closing Date, the Applicable LIBO Rate Margin for
Tranche A Term Loans and Revolving Loans that are LIBO Rate Loans shall be 3.50%
per annum.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means DLJ Capital Funding, Inc. as Lead Arranger and Sole Book
Running Manager.
"Asset Sale" means the sale, lease, assignment or other transfer (whether
voluntary or involuntary) for value (collectively, a "transfer") by Company or
any of its Subsidiaries to any Person other than Company or any of its
wholly-owned Subsidiaries of (i) any of the equity ownership of any of Company's
Subsidiaries, (ii) substantially all of the assets of any division or line of
business of Company or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of Company or any of its Subsidiaries (other
than (a) inventory sold in the ordinary course of business, (b) other equipment
transferred for not in excess of $2 million for any single transaction or
related series of transactions and $4 million in the aggregate for each Fiscal
Year, and (c) any such other assets to the extent that (x) the aggregate value
of such assets transferred in any single transaction or related series of
transactions is equal to $2 million or less and (y) the aggregate value of such
assets transferred in any Fiscal Year is equal to $4 million or less).
"Assignment Agreement" means an Assignment Agreement in substantially the
form of Exhibit IX annexed hereto.
"Authorized Representative" means any of the President, the Chief
Financial Officer and the Treasurer (or any other senior executive officer
designated in writing by the Company to the Administrative Agent and reasonably
acceptable to the Administrative Agent).
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, the higher of (x) the Prime Rate or (y)
the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
5 EXECUTION
"Business Day" means (i) for all purposes other than as covered by clause
(ii) below, any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of New York or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted LIBO Rate
or any LIBO Rate Loans, any day that is a Business Day described in clause (i)
above and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"Capital Lease", as applied to any Person, means any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"Cash" means money, currency or a credit balance in a demand, time,
savings, passbook or like account with a bank, savings and loan association,
credit union or like organization, other than an account evidenced by a
negotiable certificate of deposit.
"Cash Equivalents" means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100 million; and (v) shares of any money market mutual fund that (a)
invests solely in the types of investments referred to in clauses (i) through
(iv) above or in substantially similar investments and (b) has a rating of no
less than "AAA" from Moody's and an equivalent rating from S&P.
"Cash Junior Payment" has the meaning assigned to that term in the
definition of "Consolidated Fixed Charges" in this subsection 1.1.
"Certificate of Designation" means the Certificate of Designations,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
Series A Convertible Preferred Stock of Autotote Corporation dated as of
September 6, 2000.
"Certificate re Non-Bank Status" means a certificate substantially in the
form of Exhibit X annexed hereto delivered by a Lender to Administrative Agent
pursuant to subsection 2.7B(iii).
6 EXECUTION
"Change in Control" means:
(i) a change shall occur in the Board of Directors of Company so
that a majority of the Board of Directors of Company ceases to consist of
the individuals who constituted the Board of Directors of Company on the
Closing Date (or individuals whose election or nomination for election was
approved by a vote of at least a majority of the directors then in office
who either were directors on the Closing Date or whose election or
nomination for election was previously so approved); or
(ii) any Person or group (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission) (other than Olivetti or an affiliate
of Olivetti or a group in which Olivetti or an affiliate of Olivetti is
the largest beneficial owner of shares of the voting capital stock of
Company) shall become or be the owner, directly or indirectly,
beneficially or of record, of shares representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of Company on a fully diluted basis; or
(iii) a "Change of Control" occurs as that term is defined in the
Senior Subordinated Note Indenture or any other indenture or agreement
pursuant to which Subordinated Indebtedness has been issued.
"Class" means, as applied to Lenders, each of the following classes of
Lenders: (i) Lenders having Tranche A Term Loan Exposure; (ii) Lenders having
Tranche B Term Loan Exposure; (iii) Lenders having Revolving Loan Exposure; and
(iv) Lenders having exposure in additional commitments made in accordance with
clause (vi) of subsection 10.6.
"Closing Date" means the date on or before September 30, 2000 on which the
initial Loans are made.
"Closing Date Mortgaged Property" has the meaning assigned to that term in
subsection 4.1G.
"Closing Date Mortgages" has the meaning assigned to that term in
subsection 4.1G.
"Collateral" means, collectively, all of the real, personal and mixed
property (including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"Collateral Access Agreement" means any landlord agreement and waiver,
mortgagee agreement and waiver, bailee letter or any similar acknowledgement or
agreement of any landlord or mortgagee in respect of any Real Property Asset
where any Collateral is located or any warehouseman or other bailee in
possession of any Collateral of any Loan Party, substantially in the form of
Exhibit XV annexed hereto with such changes thereto as may be agreed to by
Administrative Agent in the reasonable exercise of its discretion.
"Collateral Documents" means the Security Agreement or any Mortgage
executed by Company or any of Company's Subsidiaries and granting a Lien on any
real, personal or mixed property of such Person to secure the Obligations and
all other instruments or documents
7 EXECUTION
delivered by any Loan Party pursuant to this Agreement or any of the other Loan
Documents in order to grant to Administrative Agent, on behalf of Lenders, a
Lien on any real, personal or mixed property of that Loan Party as security for
the Obligations.
"Commercial Letter of Credit" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services of Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"Commitment Fee Percentage" means, as at any date of determination, a
percentage per annum as set forth below opposite the applicable Consolidated
Leverage Ratio calculated on a Pro Forma Basis.
Consolidated Leverage Ratio Commitment Fee Percentage
---------------------------------------------------------------
greater than or equal to 3.50:1.00v 0.50%
less than 3.50:1.00 0.375%
; provided that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1(xviii) after the
six-month anniversary of the Closing Date, the Commitment Fee Percentage shall
be 0.50% per annum.
"Commitments" means the commitments of Lenders to make Loans as set forth
in subsection 2.1A.
"Company" has the meaning assigned to that term in the introduction to
this Agreement.
"Company Employee Benefit Plan" means any Employee Benefit Plan which is
maintained or contributed to by Company or any of its Subsidiaries.
"Company Pension Plan" means any Pension Plan which is a Company Employee
Benefit Plan.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit V annexed hereto delivered to Administrative Agent and Lenders by
Company pursuant to subsection 6.1(iv).
"Computation Date" has the meaning assigned to that term in subsection
2.1F(i).
"Conforming Leasehold Interest" means any Recorded Leasehold Interest as
to which the lessor (and all other parties having a consent right) has agreed in
writing for the benefit of Administrative Agent (which writing has been
delivered to Administrative Agent), whether under the terms of the applicable
lease, under the terms of a Landlord Consent and Estoppel, or otherwise, to the
matters described in the definition of "Landlord Consent and Estoppel," which
8 EXECUTION
interest, if a subleasehold or sub-subleasehold interest, is not subject to any
contrary restrictions contained in a superior lease or sublease.
"Consolidated Capital Expenditures" means, for any period, the sum of the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Company and its
Subsidiaries; provided that Consolidated Capital Expenditures shall not include
expenditures made in acquisitions constituting Permitted Acquisitions; provided,
further that all calculations of Consolidated Capital Expenditures for any
period that ends prior to the Closing Date or that includes the Closing Date
shall be made on a Pro Forma Basis assuming the Merger was consummated on the
first day of the Fiscal Quarter ending September 30, 2000 and the Merger was a
Permitted Acquisition; provided, still further, that for purposes of calculating
Consolidated Capital Expenditures (on a Pro Forma Basis) for the period ending
(x) December 31, 2000, Consolidated Capital Expenditures for the Fiscal Quarter
deemed to have ended March 31, 2000 shall be deemed to be $21.8 million and
Consolidated Capital Expenditures for the Fiscal Quarter deemed to have ended
June 30, 2000 shall be deemed to be $19.9 million and (y) March 31, 2001,
Consolidated Capital Expenditures for the Fiscal Quarter deemed to have ended
June 30, 2000 shall be deemed to be $19.9 million; provided, still further, that
Consolidated Capital Expenditures shall not include Consolidated Capital
Software Expenditures.
"Consolidated Capital Software Expenditures" means, for any period, the
sum of the aggregate of all expenditures by Company and its Subsidiaries during
that period to purchase or develop computer software or systems (but only to the
extent such expenditures are capitalized on the consolidated balance sheet of
Company and its Subsidiaries in conformity with GAAP); provided that
Consolidated Capital Software Expenditures shall not include expenditures made
in acquisitions constituting Permitted Acquisitions; provided, further that all
calculations of Consolidated Capital Software Expenditures for any period that
ends prior to the Closing Date or that includes the Closing Date shall be made
on a Pro Forma Basis assuming the Merger was consummated on the first day of the
Fiscal Quarter ending September 30, 2000 and the Merger was a Permitted
Acquisition; provided, still further, that for purposes of calculating
Consolidated Capital Software Expenditures (on a Pro Forma Basis) for the period
ending (x) December 31, 2000, Consolidated Capital Software Expenditures for the
Fiscal Quarter deemed to have ended March 31, 2000 shall be deemed to be $1.2
million and Consolidated Capital Software Expenditures for the Fiscal Quarter
deemed to have ended June 30, 2000 shall be deemed to be $1.5 million and (y)
March 31, 2001, Consolidated Capital Software Expenditures for the Fiscal
Quarter deemed to have ended June 30, 2000 shall be deemed to be $1.5 million.
"Consolidated Cash Interest Expense" means, for any period, Consolidated
Interest Expense for such period excluding, however, any interest expense not
payable in Cash (including amortization of discount and amortization of debt
issuance costs).
"Consolidated Cash Taxes" means, for any period, federal, state, local and
foreign income taxes of Company and its Subsidiaries paid in Cash during such
period.
9 EXECUTION
"Consolidated Current Assets" means, as at any date of determination, the
total assets of Company and its Subsidiaries on a consolidated basis which may
properly be classified as current assets in conformity with GAAP, but excluding
Cash and Cash Equivalents.
"Consolidated Current Liabilities" means, as at any date of determination,
the total liabilities of Company and its Subsidiaries on a consolidated basis
which may properly be classified as current liabilities in conformity with GAAP,
but excluding the Revolving Loans and the current portion of long term
Indebtedness of Company (including the Term Loans).
"Consolidated EBITDA" means, for any period, the sum of the amounts for
such period of (i) Consolidated Net Income, (ii) Consolidated Interest Expense,
(iii) provisions for taxes based on income, (iv) total depreciation expense, (v)
total amortization expense (including without limitation any amortization of
amounts referred to in subsection 2.3 payable to Arranger, Agents and Lenders on
or before the Closing Date), (vi) other non-cash items reducing Consolidated Net
Income less other non-cash items increasing Consolidated Net Income, and (vii)
in each case, to the extent (x) actually paid in Cash by Company on or before
the Closing Date and (y) resulting in a reduction of Consolidated Net Income for
the Fiscal Quarter ending September 30, 2000, (A) any fees paid by Company in
connection with the placement of the Convertible Preferred Stock and (B) the
Tender Premiums, all of the foregoing as determined on a consolidated basis for
Company and its Subsidiaries in conformity with GAAP; provided that all
calculations of Consolidated EBITDA for any period that ends prior to the
Closing Date or that includes the Closing Date shall be made on a Pro Forma
Basis assuming the Merger was consummated on the first day of the Fiscal Quarter
ending September 30, 2000 and the Merger was a Permitted Acquisition; provided,
further that for purposes of calculating Consolidated EBITDA (on a Pro Forma
Basis) and for purposes of each of the Consolidated Fixed Charge Coverage Ratio,
the Consolidated Leverage Ratio and the Consolidated Interest Coverage Ratio,
for the period ending (x) September 30, 2000, Consolidated EBITDA for the Fiscal
Quarter deemed to have ended December 31, 1999 shall be deemed to be $24.1
million, Consolidated EBITDA for the Fiscal Quarter deemed to have ended March
31, 2000 shall be deemed to be $24.2 million and Consolidated EBITDA for the
Fiscal Quarter deemed to have ended June 30, 2000 shall be deemed to be $24.8
million, (y) December 31, 2000, Consolidated EBITDA for the Fiscal Quarter
deemed to have ended March 31, 2000 shall be deemed to be $24.2 million and
Consolidated EBITDA for the Fiscal Quarter deemed to have ended June 30, 2000
shall be deemed to be $24.8 million, and (z) March 31, 2001, Consolidated EBITDA
for the Fiscal Quarter deemed to have ended June 30, 2000 shall be deemed to be
$24.8 million.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (c) Consolidated Capital Software
Expenditures, (d) amounts expended on Permitted Acquisitions, (e) Consolidated
Cash Interest Expense, (f) Consolidated Cash Taxes and (g) dividends paid in
cash.
10 EXECUTION
"Consolidated Fixed Charge Coverage Ratio" means, as of any date of
determination, the ratio computed for the four Fiscal Quarter period most
recently ended on or before such date of determination of (x) Consolidated
EBITDA to (y) Consolidated Fixed Charges.
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) Consolidated Cash Taxes, (iii) the aggregate amount of scheduled
payments of principal on Indebtedness of Company and its Subsidiaries (including
that portion attributable to Capital Leases in accordance with GAAP) ("Scheduled
Principal Payments") for such period, and (iv) the amount of Restricted Junior
Payments paid in cash during such period permitted under subsection 7.5 ("Cash
Junior Payments"), all of the foregoing as determined on a consolidated basis
for Company and its Subsidiaries in conformity with GAAP; provided that all
calculations of Consolidated Fixed Charges for any period that ends prior to the
Closing Date or that includes the Closing Date shall be made on a Pro Forma
Basis assuming the Merger was consummated on the first day of the Fiscal Quarter
ending September 30, 2000 and the Merger was a Permitted Acquisition; provided,
further, that for purposes of calculating Consolidated Fixed Charges (on a Pro
Forma Basis) for the period ending (x) September 30, 2000, Consolidated Cash
Taxes for the Fiscal Quarter deemed to have ended December 31, 1999 shall be
deemed to be $1.5 million, Consolidated Cash Taxes for the Fiscal Quarter deemed
to have ended March 31, 2000 shall be deemed to be $1.5 million and Consolidated
Cash Taxes for the Fiscal Quarter deemed to have ended June 30, 2000 shall be
deemed to be $1.5 million, and Scheduled Principal Payments for the Fiscal
Quarter deemed to have ended December 31, 1999 shall be deemed to be $0.3
million, Scheduled Principal Payments for the Fiscal Quarter deemed to have
ended March 31, 2000 shall be deemed to be $0.3 million and Scheduled Principal
Payments for the Fiscal Quarter deemed to have ended June 30, 2000 shall be
deemed to be $0.3 million, (y) December 31, 2000 , Consolidated Cash Taxes for
the Fiscal Quarter deemed to have ended March 31, 2000 shall be deemed to be
$1.5 million and Consolidated Cash Taxes for the Fiscal Quarter deemed to have
ended June 30, 2000 shall be deemed to be $1.5 million and Scheduled Principal
Payments for the Fiscal Quarter deemed to have ended March 31, 2000 shall be
deemed to be $0.3 million and Scheduled Principal Payments for the Fiscal
Quarter deemed to have ended June 30, 2000 shall be deemed to be $0.3 million,
and (z) March 31, 2001, Consolidated Cash Taxes for the Fiscal Quarter deemed to
have ended June 30, 2000 shall be deemed to be $1.5 million and Scheduled
Principal Payments for the Fiscal Quarter deemed to have ended June 30, 2000
shall be deemed to be $0.3 million; provided, still further, that
notwithstanding anything to the contrary contained in the first proviso to this
sentence, for purposes of the calculation of Consolidated Fixed Charges for the
period ending on September 30, 2000, December 31, 2000 and March 31, 2001,
Consolidated Cash Interest Expense and Cash Junior Payments for the Fiscal
Quarter ending September 30, 2000, December 31, 2000 and March 31, 2001 shall
not be determined on a Pro Forma Basis but shall be determined on an Annualized
basis.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio computed for the four Fiscal Quarter period most
recently ended on or before such date of determination of Consolidated EBITDA to
Consolidated Cash Interest Expense; provided that Consolidated Cash Interest
Expense for the Fiscal Quarters ending September 30, 2000, December 31, 2000 and
March 31, 2001, shall be determined on an Annualized basis.
11 EXECUTION
"Consolidated Interest Expense" means, for any period, the sum of total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including 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, but excluding, however, the
amortization of any amounts referred to in subsection 2.3 payable to Arranger,
Agents and Lenders on or before the Closing Date.
"Consolidated Leverage Ratio" means, as at any date of determination, the
ratio of (a) Consolidated Total Debt as of the last day of the Fiscal Quarter
for which such determination is being made to (b) Consolidated EBITDA for the
consecutive four Fiscal Quarters ending on the last day of the Fiscal Quarter
for which such determination is being made.
"Consolidated Net Income" means, for any period, the net income (or loss)
of Company 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 therefrom (i) the income (or loss) of any Person (other
than a Subsidiary of Company) in which any other Person (other than Company or
any of its Subsidiaries) has a joint interest, except to the extent of the
amount of dividends or other distributions actually paid to Company or any of
its Subsidiaries by such Person during such period, (ii) except as otherwise
expressly permitted under this Agreement, the income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of Company or is merged into
or consolidated with Company or any of its Subsidiaries or that Person's assets
are acquired by Company or any of its Subsidiaries, (iii) the income of any
Subsidiary of Company 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; provided that the foregoing clause (iii) shall not apply with
respect to the income of any Foreign Subsidiary of Company to the extent that
the restriction on the declaration or payment of dividends or similar
distributions by that Foreign Subsidiary of that income is permitted by
subsection 7.2C(c) or 7.2D(d), (iv) any after-tax gains or losses attributable
to Asset Sales or returned surplus assets of any Pension Plan, and (v) (to the
extent not included in clauses (i) through (iv) above) any net extraordinary
gains.
"Consolidated Net Worth" means, as of any date of determination, the sum
of the capital stock (including, without limitation, Convertible Preferred
Stock) and additional paid-in capital plus retained earnings (or minus
accumulated deficits) of Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital" means, as at any date of determination, the
excess (or deficit) of Consolidated Current Assets over Consolidated Current
Liabilities.
12 EXECUTION
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"Consulting Agreement" means that certain Consulting Agreement dated as of
May 18, 2000 by and between Company and Xxxxxxx X. Xxxxxx, as such agreement may
be amended from time to time to the extent permitted under subsection 7.14.
"Contingent Obligation", as applied to any Person, means, without
duplication, any direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any Indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
"Contractual Obligation", as applied to any Person, means any material
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
"Convertible Preferred Stock" means Company's Series A Convertible
Preferred Stock.
"Convertible Preferred Stock Purchase Agreement" means that certain
Preferred Stock Purchase Agreement dated as of August 31, 2000 by and among
Company, Olivetti and Tote Holdings, L.P., as Purchasers, providing for the
aggregate purchase and sale of shares of Convertible Preferred Stock in an
amount not to exceed $110 million, as such purchase agreement may be amended
from time to time to the extent permitted under subsection 7.14.
13 EXECUTION
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"DLJ" means DLJ Capital Funding, Inc.
"Documentation Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Dollar Equivalent" means, at any time, (x) as to any amount denominated
in Dollars, the amount thereof at such time, and (y) as to any amount
denominated in a currency other than Dollars, the equivalent amount in Dollars
as determined by Administrative Agent at such time on the basis of the Exchange
Rate for the purchase of Dollars with such currency on the most recent
Computation Date provided for in subsection 2.1F(i) or such other time as may be
reasonably specified by Administrative Agent.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Domestic Subsidiary" means a direct or indirect Subsidiary of Company
that is incorporated or organized under the laws of a state of the United States
of America.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other person (other than a natural Person)
approved by the Administrative Agent, in the case of any assignment of a
Revolving Loan, the Issuing Lender, and, unless (X) such Person is taking
delivery of an assignment in connection with physical settlement of a credit
derivatives transaction or (Y) an Event of Default has occurred and is
continuing, Company (each such approval not to be unreasonably withheld or
delayed). If the consent of Company to an assignment or to an Eligible Assignee
is required hereunder (including a consent to an assignment which does not meet
the minimum assignment thresholds specified in subsection 10.1B(i)), Company
shall be deemed to have given its consent five (5) Business Days after the date
notice thereof has been delivered by the assigning Lender (through the
Administrative Agent) unless such consent is expressly refused by Company prior
to such fifth Business Day.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is, or during the last six years was, maintained or
contributed to by Company, any of its Subsidiaries or any of their respective
ERISA Affiliates. Any such plan of a former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an Employee Benefit Plan within
the meaning of this definition solely with respect to the period during which
such former ERISA Affiliate was an ERISA Affiliate of Company or any of its
Subsidiaries with respect to liabilities for which Company or any of its
Subsidiaries could be liable under the Internal Revenue Code or ERISA.
"Environmental Claim" means any investigation, written notice, written
notice of violation, claim, action, suit, proceeding, written demand, abatement
order or other order or directive (conditional or otherwise), by any
governmental authority or any other Person, arising (i) pursuant to or in
connection with any actual or alleged violation of any Environmental Law, (ii)
in connection with any Hazardous Materials or any actual or alleged Hazardous
Materials
14 EXECUTION
Activity, or (iii) in connection with any actual or alleged damage, injury,
threat or harm to health, safety, natural resources or the environment.
"Environmental Laws" means any and all federal, state, foreign or local
statutes, ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, binding and enforceable guidance documents, or any other
requirements of governmental authorities now or hereafter in effect relating to
(i) environmental matters, including those relating to any Hazardous Materials
Activity, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
in any manner applicable to Company or any of its Subsidiaries or any Facility,
including the Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. ss.9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. ss.1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C.
ss.6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. ss.1251 et
seq.), the Clean Air Act (42 U.S.C. ss.7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. ss.2601 et seq.), the Federal Insecticide, Fungicide and
Rodenticide Act (7 U.S.C. ss.136 et seq.), the Occupational Safety and Health
Act (29 U.S.C. ss.651 et seq.), the Oil Pollution Act (33 U.S.C. ss.2701 et
seq.) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
ss.11001 et seq.), each as amended or supplemented, any analogous state or local
statutes or laws, now or hereafter in effect, and any regulations promulgated
pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities for which Company or such Subsidiary could be liable
under the Internal Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such
15 EXECUTION
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal, during any year for which it was a "substantial employer" (as
defined in Section 4001(a) of ERISA), by Company, any of its Subsidiaries or any
of their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which would reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act
or omission which would reasonably be expected to give rise to the imposition on
Company or any of its Subsidiaries of material fines, penalties, taxes or
related charges under Chapter 43 of the Internal Revenue Code or under Section
409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any
Employee Benefit Plan; (ix) the occurrence of an act or omission which would
reasonably be expected to give rise to the imposition on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of material fines,
penalties, taxes or related charges under Section 4071 of ERISA in respect of
any Employee Benefit Plan; (x) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan, which could reasonably be expected to result in a
liability to the Company, any of its Subsidiaries or any of their respective
ERISA Affiliates in excess of $500,000; (xi) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or
the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal Revenue Code; or
(xii) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.
"Event of Default" means each of the events set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"Exchange Rate" means, on any date when an amount expressed in a currency
other than Dollars is to be determined with respect to any Letter of Credit, the
nominal rate of exchange of the applicable Issuing Lender in the New York
foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at 12:00 noon (New York time)
one Business Day prior to such date, expressed as a number of units of such
currency per one Dollar.
16 EXECUTION
"Existing Company Bank Debt" means the Indebtedness under (x) the Credit
Agreement dated as of July 28, 1997 by and among Company, the various financial
institutions named therein, and Xxxxxx Financial, Inc., as agent, (y) the Term
Loan Agreement dated as of May 28, 1998 by and among Company, the various
financial institutions named therein, and Xxxxxx Financial, Inc., as agent, and
(z) the Term Loan Agreement dated as of June 9, 2000 by and among Company, the
various financial institutions named therein, and DLJ, as agent, each as
amended, supplemented or otherwise modified through the date hereof.
"Existing Company Convertible Debt" means Company's 5-1/2% Convertible
Subordinated Debentures due 2001 in an aggregate principal amount of $35
million.
"Existing Company Senior Notes" means Company's 10-7/8% Senior Notes due
2004 in an aggregate principal amount of $110 million.
"Existing Letters of Credit" means the letters of credit identified as
such in Schedule 7.4 annexed hereto (but not any refinancings, renewals or
extensions thereof).
"Existing Scientific Games Bank Debt" means the Indebtedness under (i) the
Credit Agreement dated as of November 30, 1999 by and among Scientific Games and
Scientific Games, Inc., a Delaware corporation, as co-borrowers, the lenders
referred to therein and First Union National Bank, as administrative agent
thereunder, and (ii) the 364-Day Credit Agreement dated as of November 30, 1999
by and among Scientific Games and Scientific Games, Inc., as borrowers, and
First Union National Bank, as administrative agent, each as amended,
supplemented or otherwise modified through the date hereof.
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Company, Scientific Games or any of their
respective Subsidiaries or any of their respective predecessors or Affiliates.
"Federal Funds Effective Rate" means, 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 Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"Financial Condition Certificate" means a Financial Condition Certificate,
substantially in the form of Exhibit VI annexed hereto, dated as of the Closing
Date.
"Financial Plan" has the meaning assigned to that term in subsection
4.1J(iv).
"First Priority" means, with respect to any Lien purported to be created
in any Collateral pursuant to any Collateral Document, that (i) such Lien has
priority over any other Lien on such Collateral (other than Permitted
Encumbrances which as a matter of statutory law have priority
17 EXECUTION
over any other Lien irrespective of the prior perfection or filing of such other
Lien) and (ii) such Lien is the only Lien (other than Permitted Encumbrances) to
which such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of Company or its Subsidiaries
ending on January 31, April 30, July 31 and October 31 of each calendar year;
provided that, until the date on which Company changes its Fiscal Year from a
Fiscal Year ending on October 31 of each calendar year to a Fiscal Year ending
on December 31 of each calendar year pursuant to subsection 6.11, "Fiscal
Quarter" shall be deemed for all purposes hereunder to mean, unless the context
otherwise requires, a fiscal quarter of Company and its Subsidiaries ending on
March 31, June 30, September 30 and December 31 of each calendar year; provided,
further that, from and after the date on which Company changes its fiscal year
from a fiscal year ending on October 31 of each calendar year to a fiscal year
ending on December 31 of each calendar year, "Fiscal Quarter" shall mean a
fiscal quarter of Company and its Subsidiaries ending on March 31, June 30,
September 30 and December 31 of each calendar year.
"Fiscal Year" means the fiscal year, in the case of Company and its
Subsidiaries (other than Scientific Games and its Subsidiaries), ending on
October 31 of each calendar year, and in the case of Scientific Games and its
Subsidiaries, ending on December 31 of each calendar year; provided that, until
Company changes its fiscal year from a fiscal year ending on October 31 of each
calendar year to a fiscal year ending on December 31 of each calendar year,
"Fiscal Year" of Company and its Subsidiaries shall be deemed for all purposes
hereunder to mean, unless context otherwise requires, a fiscal year of Company
deemed for all purposes hereunder to end on December 31 of each calendar year
provided further that, from and after the date on which Company changes its
fiscal year from a fiscal year ending on October 31 of each calendar year to a
fiscal year ending on December 31 of each calendar year, "Fiscal Year" shall
mean a fiscal year of Company and its Subsidiaries ending on December 31 of each
calendar year; provided, further that, from and after the date on which Company
changes its fiscal year from a fiscal year ending on October 31 of each calendar
year to a fiscal year ending on December 31 of each calendar year, "Fiscal Year"
shall mean a fiscal year of Company and its Subsidiaries ending on December 31
each calendar year.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Foreign Subsidiary" means a direct or indirect Subsidiary of Company
which is incorporated or organized under the laws of any government or
sovereignty other than any state of the United States of America or the District
of Columbia.
"Funding and Payment Office" means (i) the office of Administrative Agent
and Swing Line Lender located at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 or (ii)
such other office of Administrative Agent and Swing Line Lender as may from time
to time hereafter be designated as such in a written notice delivered by
Administrative Agent and Swing Line Lender to Company and each Lender.
"Fund" means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of business.
18 EXECUTION
"Funding Date" means the date of the funding of a Loan, which date shall
be a Business Day.
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"Governmental Authorization" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"Hazardous Materials" means (i) any chemical, material or substance at the
applicable time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea formaldehyde foam insulation;
(viii) electrical equipment which contains any oil or dielectric fluid
containing polychlorinated biphenyls; (ix) pesticides; and (x) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, presence, storage, Release, threatened Release,
discharge, placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or handling of
any Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a Currency Agreement
designed to hedge against fluctuations in interest rates or currency values,
respectively, and not entered into for speculative purposes.
"Inactive Subsidiary" means any Subsidiary of Company that does not engage
in any business activity, which Subsidiary, together with all other Inactive
Subsidiaries, (a) does not own assets with an aggregate value for all such
Inactive Subsidiaries of greater than $50,000, and (b) does not, together with
all other Inactive Subsidiaries, generate aggregate revenues of greater
19 EXECUTION
than $50,000 in any single Fiscal Year; and all Inactive Subsidiaries shall be
designated as such on Schedule 5.1.
"Indebtedness", as applied to any Person, means, without duplication, (i)
all indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money, (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, and (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person. Obligations under Interest Rate
Agreements and Currency Agreements constitute (X) in the case of Hedge
Agreements, Contingent Obligations, and (Y) in all other cases, Investments, and
in neither case constitute Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
subsection 10.3.
"Indemnitee" has the meaning assigned to that term in subsection 10.3.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Company and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to any Base Rate Loan, the
last Business Day of each March, June, September and December, of each year,
commencing on the first such date to occur after the Closing Date, and (ii) with
respect to any LIBO Rate Loan, the last Business Day of each Interest Period
applicable to such Loan; provided that in the case of each Interest Period of
longer than three months "Interest Payment Date" shall also include the Business
Day that is three months, or any multiple thereof, after the commencement of
such Interest Period.
"Interest Period" has the meaning assigned to that term in subsection
2.2B.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement to which Company or any of its Subsidiaries is a party.
"Interest Rate Determination Date" means, with respect to any Interest
Period, the second Business Day prior to the first day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person
20 EXECUTION
(including any Subsidiary of Company other than a wholly-owned Domestic
Subsidiary of Company), (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by any Subsidiary of Company from any
Person other than Company or any of its wholly-owned Domestic Subsidiaries, of
any equity Securities of such Subsidiary, (iii) any direct or indirect loan,
advance (other than advances to employees for moving, entertainment and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by Company or any of its Subsidiaries to any
other Person (other than a wholly-owned Domestic Subsidiary of Company),
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business, or (iv) Interest Rate Agreements or Currency
Agreements not constituting Hedge Agreements. The amount of any Investment shall
be the original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment; provided that the
amount of an Investment shall be reduced by the amount of capital returned on
such Investment (as determined on an after tax basis).
"IP Collateral" means, collectively, any Collateral under the Security
Agreement consisting of trademarks, servicemarks, tradenames, tradesecrets,
business names, logos, patents, patent applications, licenses, copyrights, any
registration and franchise rights and interests relating thereto, and any other
intellectual property of any type, and all goodwill associated with any of the
foregoing.
"Issuing Lender" means, with respect to any Letter of Credit, the
Revolving Lender that agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that in no event shall any Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
(and all other parties having a consent right) under the related lease,
satisfactory in form and substance to Administrative Agent, pursuant to which
such lessor (and all other parties having a consent right) agrees, for the
benefit of Administrative Agent, (i) that without any further consent of such
lessor (and all other parties having a consent right) or any further action on
the part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if any Agent, any Lender, or an Affiliate of
either so acquires such Leasehold Property), (ii) that such lessor shall not
terminate such lease as a result of a default by such Loan Party thereunder
without first giving Administrative Agent notice of such default and at least 15
days in the case of a monetary default and 30 days in the case of a non-monetary
default beyond the cure period afforded to the tenant thereunder to cure such
default, and (iii) that the related lease is in full force and effect, that no
defaults by the lessee exist thereunder, and such other information as is
customarily included in a lessor's estoppel certificate, and (iv) to such other
matters relating to such Leasehold Property as Administrative Agent may
reasonably request.
21 EXECUTION
"Leasehold Property" means any leasehold interest of any Loan Party as
lessee under any lease of real property.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires.
"Letter of Credit" or "Letters of Credit" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of Company pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of determination, the sum
of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding plus
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Company. For the purposes of
this definition, any amount described in clause (i) or (ii) of the preceding
sentence which is denominated in a currency other than Dollars shall be valued
based on the applicable Exchange Rate for such currency as of the applicable
date of determination.
"LIBO Rate Loans" means Loans bearing interest at rates determined by
reference to the Adjusted LIBO Rate as provided in subsection 2.2A.
"Lien" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Tranche A Term Loans, Tranche B
Term Loans, Revolving Loans or Swing Line Loans or any combination thereof.
"Loan Documents" means this Agreement, the Notes, the Letters of Credit
(and any applications for, or reimbursement agreements or other documents or
certificates executed by Company in favor of an Issuing Lender relating to, the
Letters of Credit), the Subsidiary Guaranties and the Collateral Documents.
"Loan Party" means each of Acquisition Co., Company and any of Company's
Subsidiaries from time to time executing a Loan Document, and "Loan Parties"
means all such Persons, collectively.
"Margin Determination Certificate" means a Margin Determination
Certificate of Company delivered pursuant to 6.1(xviii) setting forth in
reasonable detail the calculation of the Consolidated Leverage Ratio for the
four-Fiscal Quarter period ending as of the last day of the Fiscal Quarter
immediately preceding the Fiscal Quarter in which such certificate is delivered.
"Margin Stock" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System as in effect from time to
time.
22 EXECUTION
"Material Adverse Effect" means (i) any event or change in or effect on
the business of Company and its Subsidiaries, taken as a whole, that is or can
reasonably be expected to be materially adverse to the business, operations,
properties (including intangible properties), condition (financial or
otherwise), assets, liabilities or prospects of Company and its Subsidiaries,
taken as a whole, or (ii) the impairment in any material respect of the ability
of any Loan Party to perform, or of Administrative Agent or Lenders to enforce,
the Obligations.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or of
material importance to the operations of Company or any of its Subsidiaries.
"Merger" means the merger of Acquisition Co. with and into Scientific
Games pursuant to the Merger Agreement, with Scientific Games as the surviving
corporation.
"Merger Agreement" means the Agreement and Plan of Merger dated as of May
18, 2000 by and among Company, Acquisition Co. and Scientific Games, as such
agreement may be amended from time to time to the extent permitted under
subsection 7.14.
"Merger Date" means the date upon which the Merger is consummated.
"Mortgage" means (i) a security instrument (whether designated as a deed
of trust or a mortgage or by any similar title) executed and delivered by any
Loan Party, substantially in such form as may be approved by Administrative
Agent in its reasonable discretion, in each case with such changes thereto as
may be recommended by Administrative Agent's local counsel based on local laws
or customary local mortgage or deed of trust practices, or (ii) at the option of
Administrative Agent, in the case of an Additional Mortgaged Property, an
amendment to an existing Mortgage, in form reasonably satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage, in either case as such
security instrument or amendment may be amended, supplemented or otherwise
modified from time to time.
"Mortgages" means all such instruments, including the Closing Date
Mortgages, and any Additional Mortgages, collectively.
"Mortgaged Property" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Net Asset Sale Proceeds" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
by monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale, net of (a) any amounts properly
reserved on the financial statements of Company and its Subsidiaries in
accordance with GAAP with respect to contingent liabilities directly related to
such Asset Sale (provided that the aggregate amount of such reserved amount
shall not exceed $5 million at any time), and (b) any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of
23 EXECUTION
the date of such Asset Sale as a result of any gain recognized in connection
with such Asset Sale and (ii) payment of the outstanding principal amount of,
premium or penalty, if any, and interest on, any Indebtedness (other than the
Loans) that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset Sale.
"Net Insurance/Condemnation Proceeds" means any Cash payments or proceeds
received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
"Notes" means one or more of the Tranche A Term Notes, Tranche B Term
Notes, Revolving Notes or Swing Line Notes or any combination thereof.
"Notice of Borrowing" means a notice substantially in the form of Exhibit
I annexed hereto delivered by Company to Administrative Agent pursuant to
subsection 2.1B with respect to a proposed borrowing.
"Notice of Conversion/Continuation" means a notice substantially in the
form of Exhibit II annexed hereto delivered by Company to Administrative Agent
pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"Obligations" means all obligations of every nature of each Loan Party
from time to time owed to Agents, Lenders or any of them under the Loan
Documents to which any of the Lenders is a party, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
"Officer's Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president, one of its
vice-presidents, its chief financial officer (or if there is no chief financial
officer, its chief accounting officer) or its treasurer; provided that every
Officer's Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officer's Certificate has or have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the signer
or signers, such signer or signers has or have made or has or have caused to be
made such examination or investigation as is necessary to enable such signer or
signers to express an informed opinion as to whether or not such condition has
been complied with, and (iii) a statement as to whether, in the opinion of the
signer or signers, such condition has been complied with.
"Olivetti" means Olivetti S.p.A.
24 EXECUTION
"Operating Lease" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) that is not a Capital Lease in accordance with
GAAP other than any such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA.
"Permitted Acquisition" means any acquisition, whether by purchase,
merger, reorganization or any other method, by Company or any of its
Subsidiaries of (x) another Person which is engaged primarily in the same or a
related line of business as Company and its Subsidiaries or (y) any assets or
other property of another Person relating primarily to the same or a related
line of business as Company and its Subsidiaries (any such Person, assets or
other property being an "Acquired Business"); provided that any such Permitted
Acquisition shall comply with the provisions of subsection 7.7(vii).
"Permitted Currency" means, Euros, Pounds Sterling, Italian Lire, French
Francs, Belgium Francs, Irish Punts, German Marks, Luxembourg Francs, Dutch
Guilders and Austrian Schillings.
"Permitted Encumbrances" means the following types of Liens (excluding (x)
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA and (y) any such Lien relating to or imposed in
connection with any Environmental Claim which, solely with respect to Liens
within the ambit of this clause (y), would give rise to a Material Adverse
Effect):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3 but
excluding any lien for the reimbursement of charges incurred by any
governmental authorities in connection with any Hazardous Materials
Activity;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in
each case incurred in the ordinary course of business (a) for amounts not
yet overdue or (b) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of 15 days) are being
contested in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts, and (2) in the
case of a Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens 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
25 EXECUTION
appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money), so long as
no foreclosure, sale or similar proceedings have been commenced with
respect to any portion of the Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in
any material respect with the ordinary conduct of the business of Company
or any of its Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, covenants, conditions, restrictions,
encroachments, and other defects or irregularities in title, in each case
which do not and will not interfere in any material respect with the
ordinary conduct of the business of Company or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as security
for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease permitted under this Agreement, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to, or
(c) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding
clause (b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee under such
lease;
(viii) Liens arising from filing UCC financing statements relating
solely to leases not prohibited by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(xi) Liens securing obligations (other than obligations representing
Indebtedness for borrowed money) under operating, reciprocal easement or
similar agreements entered into in the ordinary course of business of
Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of Company or such Subsidiary.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint
26 EXECUTION
Ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments (whether federal, state or local, domestic or foreign, and including
political subdivisions thereof) and agencies or other administrative or
regulatory bodies thereof.
"Potential Event of Default" means a condition or event that, after notice
or lapse of time or both, would constitute an Event of Default.
"Prime Rate" means the prime lending rate as set forth on the British
Banking Association Telerate page 5 (or such other comparable page as may, in
the opinion of the Administrative Agent, replace such page for the purpose of
displaying such rate), as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually available. Administrative Agent or any Lender may make commercial loans
or other loans at rates of interest at, above or below the Prime Rate.
"Pro Forma Basis" means, as of any date of determination, the compliance
of Company with the financial covenants set forth in subsection 7.6A, 7.6B and
7.6C as of the last day of the four Fiscal Quarter period most recently ended
prior to such date of determination for which the relevant financial information
is available (the "Compliance Period"), after giving effect on a pro forma basis
to any Permitted Acquisitions made during such Compliance Period and any
dispositions made during such Compliance Period, other than sales of inventory
in the ordinary course of business and dispositions of obsolete equipment on the
following basis:
(i) any Indebtedness incurred or assumed by Company or any of its
Subsidiaries in connection with such Permitted Acquisitions and any
Indebtedness repaid in connection with such Permitted Acquisitions or
dispositions shall be deemed to have been incurred or repaid,
respectively, as of the first day of the Compliance Period;
(ii) if such Indebtedness incurred or assumed by Company or any of
its Subsidiaries in connection with such Permitted Acquisitions has a
floating or formula rate, then the rate of interest for such Indebtedness
for the applicable period shall be computed as if the rate in effect for
such Indebtedness on the relevant measurement date had been the applicable
rate for the entire applicable period;
(iii) income statement items (whether positive or negative)
attributable to the property or business acquired or disposed of in such
Permitted Acquisitions or dispositions shall be included as if such
acquisitions or dispositions took place on the first day of such
Compliance Period on a pro forma basis; and
(iv) any historical extraordinary non-recurring costs or expenses or
other verifiable costs or expenses that will not continue after the
acquisition or disposition date may be eliminated and other expenses and
cost reductions may be reflected on a basis consistent with Regulation S-X
promulgated by the Securities and Exchange Commission.
With respect to any such Permitted Acquisitions, such pro forma
calculations shall be based on the audited or reviewed financial results
to the extent delivered in compliance with clause (g) of subsection
7.7(vii). All pro forma adjustments shall be approved by the
Administrative Agent.
27 EXECUTION
"Pro Rata Share" means (i) with respect to all payments, computations and
other matters relating to the Tranche A Term Loan Commitment or the Tranche A
Term Loan of any Lender, the percentage obtained by dividing (x) the Tranche A
Term Loan Exposure of that Lender by (y) the aggregate Tranche A Term Loan
Exposure of all Lenders, (ii) with respect to all payments, computations and
other matters relating to the Tranche B Term Loan Commitment or the Tranche B
Term Loan of any Lender, the percentage obtained by dividing (x) the Tranche B
Term Loan Exposure of that Lender by (y) the aggregate Tranche B Term Loan
Exposure of all Lenders, (iii) with respect to all payments, computations and
other matters relating to the Revolving Loan Commitment or the Revolving Loans
of any Lender or any Letters of Credit issued or participations therein
purchased by any Lender or any participations in any Swing Line Loans purchased
or deemed purchased by any Revolving Lender, the percentage obtained by dividing
(x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving
Loan Exposure of all Lenders, and (iv) for all other purposes with respect to
each Lender, the percentage obtained by dividing (x) the sum of the Tranche A
Term Loan Exposure of that Lender plus the Tranche B Term Loan Exposure of
Lender plus the Revolving Loan Exposure of that Lender by (y) the sum of the
aggregate Tranche A Term Loan Exposure of all Lenders plus the Tranche B Term
Loan Exposure of that Lender plus the aggregate Revolving Loan Exposure of all
Lenders, in any such case as the applicable percentage may be adjusted by
assignments permitted pursuant to subsection 10.1. The initial Pro Rata Share of
each Lender for purposes of each of clauses (i), (ii) and (iii) of the preceding
sentence is set forth opposite the name of that Lender in Schedule 2.1 annexed
hereto.
"PTO" means the United States Patent and Trademark Office or any successor
or substitute office in which filings are necessary or, in the opinion of
Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"Purchase Money Indebtedness" means Indebtedness of Company or any of its
Subsidiaries incurred in connection with the purchase of assets or other
property for the business of Company or any of its Subsidiaries; provided that
the recourse of the lenders with respect to such Indebtedness is limited solely
to the assets or other property so purchased (and the proceeds of such assets or
other property) without further recourse to either Company or any of its
Subsidiaries.
"Real Property Asset" means, at any time of determination, any interest
then owned by any Loan Party in any real property.
"Recorded Leasehold Interest" means a Leasehold Property with respect to
which a Record Document (as hereinafter defined) has been recorded in all places
necessary or desirable, in the reasonable judgment of Administrative Agent, to
give constructive notice of such Leasehold Property to third-party purchasers
and encumbrancers of the affected real property. For purposes of this
definition, the term "Record Document" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document or a memorandum thereof, executed and acknowledged by such holder, in
each case in form sufficient to give such constructive notice upon recordation
and otherwise in form reasonably satisfactory to Administrative Agent.
28 EXECUTION
"Refunded Swing Line Loans" has the meaning assigned to that term in
subsection 2.1A(iii).
"Register" has the meaning assigned to that term in subsection 2.1D.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"Reimbursement Date" has the meaning assigned to that term in subsection
3.3B.
"Related Agreements" means, collectively, the Merger Agreement, the
Convertible Preferred Stock Purchase Agreement, the Stockholders Agreement, the
Certificate of Designations, the Senior Subordinated Note Indenture and the
Senior Subordinated Notes.
"Release" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of Hazardous Materials into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials), including the movement
of any Hazardous Materials through the air, soil, surface water or groundwater.
"Replaced Lender" has the meaning assigned to that term in subsection 2.8.
"Replacement Lender" has the meaning assigned to that term in subsection
2.8.
"Request for Issuance of Letter of Credit" means a notice substantially in
the form of Exhibit III annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 3.1B(i) with respect to the proposed issuance of a
Letter of Credit.
"Requisite Class Lenders" means, at any time of determination, (i) for the
Class of Lenders having Tranche A Term Loan Exposure, Lenders having or holding
more than 50% of the aggregate Tranche A Term Loan Exposure of all Lenders, (ii)
for the Class of Lenders having Tranche B Term Loan Exposure, Lenders having or
holding more than 50% of the aggregate Tranche B Term Loan Exposure of all
Lenders, (iii) for the Class of Lenders having Revolving Loan Exposure, Lenders
having or holding more than 50% of the aggregate Revolving Loan Exposure of all
Lenders and (iv) for any Lenders having exposure in additional commitments or
loans in any additional Class created in accordance with clause (vi) of
subsection 10.6A, Lenders having or holding more than 50% of the aggregate
exposure in commitments or loans of such Class.
"Requisite Lenders" means Lenders having or holding more than 50% of the
sum of (i) the aggregate Tranche A Term Loan Exposure of all Lenders plus (ii)
the aggregate Tranche B Term Loan Exposure of all Lenders plus (iii) the
aggregate Revolving Loan Exposure of all Lenders.
"Restricted Junior Payment" means (i) any distribution, direct or
indirect, on account of any class of stock of Company now or hereafter
outstanding, except a distribution payable solely in shares of that class of
stock payable solely to holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or
29 EXECUTION
indirect, of any class of stock of Company now or hereafter outstanding, (iii)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of
Company now or hereafter outstanding, and (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment with respect to, any Subordinated Indebtedness.
"Revised Financial Plan" has the meaning assigned to that term in
subsection 6.1(xiii).
"Revolving Lender" means a Lender having a Revolving Loan Commitment.
"Revolving Loan Commitment" means the commitment of a Revolving Lender to
make Revolving Loans to Company pursuant to subsection 2.1A(iii), and "Revolving
Loan Commitments" means such commitments of all Revolving Lenders in the
aggregate.
"Revolving Loan Commitment Termination Date" means September 30, 2006.
"Revolving Loan Exposure" means, with respect to any Revolving Lender as
of any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Revolving Lender's Revolving Loan Commitment and (ii) after
the termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Revolving Lender
plus (b) in the event that Revolving Lender is an Issuing Lender, the aggregate
Letter of Credit Usage in respect of all Letters of Credit issued by that
Revolving Lender (in each case net of any participations purchased or deemed
purchased by other Revolving Lenders in such Letters of Credit or any
unreimbursed drawings thereunder) plus (c) the aggregate amount of all
participations purchased or deemed purchased by that Revolving Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit plus (d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any participations therein
purchased or deemed purchased by other Revolving Lenders) plus (e) the aggregate
amount of all participations purchased or deemed purchased by that Revolving
Lender in any outstanding Swing Line Loans.
"Revolving Loans" means the Loans made by Revolving Lenders to Company
pursuant to subsection 2.1A(iii).
"Revolving Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(iii) on the Closing Date and (ii) any promissory
notes issued by Company pursuant to subsection 10.1B in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
Revolving Lenders, in each case substantially in the form of Exhibit IV-C
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"Scheduled Principal Payments" has the meaning assigned to that term in
the definition of "Consolidated Fixed Charges" in this subsection 1.1.
"Scientific Games" means Scientific Games Holdings Corp., a Delaware
corporation.
30 EXECUTION
"Scientific Games Common Stock" means prior to the Merger the Common
Stock, $.001 par value, of Scientific Games.
"Security Agreement" means the Security Agreement executed and delivered
by Company and the wholly-owned Domestic Subsidiaries of Company on the Closing
Date and to be executed and delivered by additional wholly-owned Domestic
Subsidiaries of Company from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XII annexed hereto, as such
Security Agreement may thereafter be amended, supplemented or otherwise modified
from time to time and any documents or agreements delivered by Company or any of
its wholly-owned Domestic Subsidiaries with respect to the pledge of capital
stock or other equity interests in Foreign Subsidiaries pursuant to subsection
6.8D.
"Securities" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"Senior Subordinated Note Indenture" means the Indenture dated as of
August 14, 2000 executed by Company and a trustee named therein pursuant to
which the Senior Subordinated Notes were issued, as amended by the First
Supplemental Indenture dated as of September 6, 2000, and as such indenture may
be further amended from time to time to the extent permitted under subsection
7.14.
"Senior Subordinated Notes" means the unsecured Senior Subordinated Notes
due 2010, issued by Company pursuant to the Senior Subordinated Note Indenture,
as such Senior Subordinated Notes may be amended from time to time to the extent
permitted under subsection 7.14, all the proceeds of which are to be used
pursuant to subsection 4.1D.
"SGIL" has the meaning assigned to that term in subsection 7.1(x).
"Solvent" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time
31 EXECUTION
shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"Standby Letter of Credit" means any standby letter of credit or similar
instrument issued for the purpose of supporting (i) Indebtedness of Company or
any of its Subsidiaries in respect of industrial revenue or development bonds or
financings, (ii) workers' compensation liabilities of Company or any of its
Subsidiaries, (iii) the obligations of third party insurers of Company or any of
its Subsidiaries, (iv) obligations with respect to Capital Leases or Operating
Leases of Company or any of its Subsidiaries, and (v) performance, payment,
deposit or surety obligations of Company or any of its Subsidiaries, in any case
if required by law or governmental rule or regulation or in accordance with
custom and practice in the industry; provided that Standby Letters of Credit may
not be issued for the purpose of supporting (a) trade payables or (b) any
Indebtedness constituting "antecedent debt" (as that term is used in Section 547
of the Bankruptcy Code).
"Stockholders' Agreement" means that certain Stockholders' Agreement dated
as of September 6, 2000, by and among Company, Cermatica Gaming, S.A., Olivetti
International, S.A., The Oak Fund, Peconic Fund Ltd. and Ramius Securities, LLC.
"Subordinated Indebtedness" means the Senior Subordinated Notes, the
Convertible Subordinated Debt and any other Indebtedness of Company subordinated
in right of payment to the Obligations pursuant to documentation containing
maturities, amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"Subsidiary Guarantor" means (i) any wholly-owned Domestic Subsidiary of
Company with respect to the Subsidiary Guaranty executed and delivered by such
Subsidiaries in favor of Administrative Agent, on behalf of Lenders, on the
Closing Date and to be executed and delivered by any additional wholly-owned
Domestic Subsidiaries of Company from time to time thereafter in accordance with
subsection 6.8, and (ii) any wholly-owned Domestic Subsidiary of Company that
executes and delivers a counterpart of the Subsidiary Guaranty in favor of
Administrative Agent, on behalf of Lenders, from time to time after the Closing
Date in accordance with subsection 6.8.
"Subsidiary Guaranty" means the Subsidiary Guaranty in favor of
Administrative Agent, on behalf of Lenders, executed and delivered by the
wholly-owned Domestic Subsidiaries of Company (other than any Inactive
Subsidiary) on the Closing Date and to be executed and
32 EXECUTION
delivered by additional wholly-owned Domestic Subsidiaries of Company (other
than any Inactive Subsidiary) from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XIII annexed hereto, as
such Subsidiary Guaranty may hereafter be amended, supplemented or otherwise
modified from time to time.
"Supplemental Collateral Agent" has the meaning assigned to that term in
subsection 9.1B.
"Swing Line Lender" means DLJ, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.
"Swing Line Loan Commitment" means the commitment of Swing Line Lender to
make Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"Swing Line Loans" means the Loans made by Swing Line Lender to Company
pursuant to subsection 2.1A(iv).
"Swing Line Note" means (i) the promissory note of Company issued pursuant
to subsection 2.1E(iii) on the Closing Date and (ii) any promissory note issued
by Company to any successor Administrative Agent and Swing Line Lender pursuant
to the last sentence of subsection 9.5B, in each case substantially in the form
of Exhibit IV-D annexed hereto, as it may be amended, supplemented or otherwise
modified from time to time.
"Syndication Agent" has the meaning assigned to that term in the
introduction to this Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided that "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"Tender Premiums" means the tender premiums and/or redemption payable
under the Existing Company Senior Notes.
"Term Loans" means the Tranche A Term Loans and the Tranche B Term Loans.
"Title Company" means one or more title insurance companies reasonably
satisfactory to Administrative Agent.
"Total Utilization of Revolving Loan Commitments" means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans
33 EXECUTION
plus (ii) the aggregate principal amount of all outstanding Swing Line Loans
plus (iii) the Letter of Credit Usage.
"Tranche A Term Loan Commitment" means the commitment of a Lender to make
a Tranche A Term Loan to Company pursuant to subsection 2.1A(i), and "Tranche A
Term Loan Commitments" means such commitments of all Lenders in the aggregate.
"Tranche A Term Loan Exposure" means, with respect to any Tranche A Term
Loan Lender as of any date of determination (i) prior to the funding of all of
the Tranche A Term Loans, that Lender's original Tranche A Term Loan Commitment
and (ii) after the funding of all of the Tranche A Term Loans, the outstanding
principal amount of the Tranche A Term Loan of that Lender.
"Tranche A Term Loan Lender" means any Lender who holds a Tranche A Term
Loan Commitment, or who has made a Tranche A Term Loan hereunder and any
assignee of such Lender pursuant to subsection 10.1B.
"Tranche A Term Loans" means the Tranche A Term Loans made by Tranche A
Term Loan Lenders to Company pursuant to subsection 2.1A(i).
"Tranche A Term Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(i) on the Closing Date and (ii) any promissory notes
issued by Company pursuant to subsection 10.1B in connection with assignments of
the Tranche A Term Loan Commitments or Tranche A Term Loans of any Tranche A
Term Loan Lenders, in each case substantially in the form of Exhibit IV-A
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"Tranche B Term Loan Commitment" means the commitment of a Lender to make
a Tranche B Term Loan to Company pursuant to subsection 2.1A(ii), and "Tranche B
Term Loan Commitments" means such commitments of all Lenders in the aggregate.
"Tranche B Term Loan Exposure" means, with respect to any Tranche B Term
Loan Lender as of any date of determination (i) prior to the funding of the
Tranche B Term Loans, that Lender's Tranche B Term Loan Commitment and (ii)
after the funding of the Tranche B Term Loans, the outstanding principal amount
of the Tranche B Term Loan of that Lender.
"Tranche B Term Loan Lender" means any Lender who holds a Tranche B Term
Loan Commitment or who has made a Tranche B Term Loan hereunder, and any
assignee of such Lender pursuant to subsection 10.1B.
"Tranche B Term Loans" means the Tranche B Term Loans made by Tranche B
Term Loan Lenders to Company pursuant to subsection 2.1A(ii).
"Tranche B Term Notes" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(ii) on the Closing Date and (ii) any promissory
notes issued by Company pursuant to subsection 10.1B in connection with
assignments of the Tranche B Term Loan Commitments or Tranche B Term Loans of
any Tranche B Term Loan Lenders, in each case
34 EXECUTION
substantially in the form of Exhibit IV-B annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"Transaction Costs" means the fees, costs and expenses payable by any Loan
Party or by Scientific Games in connection with the Merger, the related
financing and other transactions contemplated by the Loan Documents and the
Related Agreements in an aggregate amount not to exceed $30.1 million; provided
that the foregoing shall not include any related non-cash compensation paid to
any of the Lenders or any Affiliates of any of the Lenders on or before the
Closing Date in connection with any of the financings contemplated by the Loan
Documents.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UK Property" shall mean the property located at Xxxxxxxx, Xxxxxxxxxx,
Xxxxx XX00, Xxxxxxx.
.1 Accounting Terms; Utilization of GAAP for Purposes of Calculations Under
Agreement.
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Financial statements and other information required to be
delivered by Company to Lenders pursuant to clauses (i), (ii), and (xiii) of
subsection 6.1 shall be prepared in accordance with GAAP as in effect at the
time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(v)). Calculations in connection with
the definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 5.3.
.2 Other Definitional Provisions and Rules of Construction.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
35 EXECUTION
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
.1 Commitments; Making of Loans; Notes.
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of Company herein set forth,
each Tranche A Term Loan Lender hereby severally agrees to make the Tranche A
Term Loans described in subsection 2.1A(i), each Tranche B Term Loan Lender
hereby severally agrees to make the Tranche B Term Loans described in subsection
2.1A(ii), each Revolving Lender hereby severally agrees to make the Revolving
Loans described in subsection 2.1A(iii) and each Swing Line Lender hereby agrees
to make the Swing Line Loans described in subsection 2.1A(iv).
(i) Tranche A Term Loans. Each Tranche A Term Loan Lender severally
agrees to lend to Company on the Closing Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Tranche A Term
Loan Commitments to be used for the purposes identified in subsection
2.5A. The amount of each Tranche A Term Loan Lender's Tranche A Term Loan
Commitment is set forth opposite its name on Schedule 2.1 annexed hereto
and the aggregate amount of the Tranche A Term Loan Commitments is $60
million; provided that the Tranche A Term Loan Commitments of the Tranche
A Term Loan Lenders shall be adjusted to give effect to any assignments of
the Tranche A Term Loan Commitments pursuant to subsection 10.1B. Each
Tranche A Term Loan Lender's Term Loan Commitment to the extent unused,
shall expire on the close of business on the Closing Date. Amounts
borrowed under this subsection 2.1A(i) and subsequently repaid or prepaid
may not be reborrowed.
(ii) Tranche B Term Loans. Each Tranche B Term Loan Lender severally
agrees to lend to Company on the Closing Date an amount not exceeding its
Pro Rata Share of the aggregate amount of the Tranche B Term Loan
Commitments to be used for the purposes identified in subsection 2.5A. The
amount of each Tranche B Term Loan Lender's Tranche B Term Loan Commitment
is set forth opposite its name on Schedule 2.1 annexed hereto and the
aggregate amount of the Tranche B Term Loan Commitments is $220 million;
provided that the Tranche B Term Loan Commitments of Tranche B Term Loan
Lenders shall be adjusted to give effect to any assignments of the Tranche
B Term Loan Commitments pursuant to subsection 10.1B. Each Tranche B Term
Loan Lender's Tranche B Term Loan Commitment to the extent unused, shall
expire on the close of business on the Closing Date. Amounts borrowed
under this subsection 2.1A(ii) and subsequently repaid or prepaid may not
be reborrowed.
(iii) Revolving Loans. Each Revolving Lender severally agrees,
subject to the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time to time,
to lend to Company from time to time during the period from the Closing
Date to but excluding the Revolving Loan Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate amount
of the Revolving Loan Commitments to be used for the purposes identified
in subsection 2.5B. The original amount of each Revolving Lender's
Revolving Loan Commitment is set forth opposite its name on Schedule 2.1
annexed hereto and the aggregate original amount of the Revolving Loan
Commitments is $65 million; provided
36 EXECUTION
that the Revolving Loan Commitments of the Revolving Lenders shall be
adjusted to give effect to any assignments of the Revolving Loan
Commitments pursuant to subsection 10.1B; and provided further that the
amount of the Revolving Loan Commitments shall be reduced from time to
time by the amount of any reductions thereto made pursuant to subsections
2.4B(ii) and 2.4B(iii). Each Revolving Lender's Revolving Loan Commitment
shall expire on September 30, 2000 if the Term Loans are not made on or
before such date or on the Revolving Loan Commitment Termination Date if
the Term Loans are made and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than the Revolving Loan
Commitment Termination Date. Amounts borrowed under this subsection
2.1A(iii) may be repaid and reborrowed to but excluding the Revolving Loan
Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect.
(iv) Swing Line Loans. Swing Line Lender hereby agrees, subject to
the limitations set forth below with respect to the maximum amount of
Swing Line Loans permitted to be outstanding from time to time, to make a
portion of the Revolving Loan Commitments available to Company from time
to time during the period from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date by making Swing Line Loans to
Company in an aggregate amount not exceeding the amount of the Swing Line
Loan Commitment to be used for the purposes identified in subsection 2.5B,
notwithstanding the fact that such Swing Line Loans, when aggregated with
Swing Line Lender's outstanding Revolving Loans and Swing Line Lender's
Pro Rata Share of the Letter of Credit Usage then in effect, may exceed
Swing Line Lender's Revolving Loan Commitment. The original amount of the
Swing Line Loan Commitment is $10 million; provided that any reduction of
the Revolving Loan Commitments made pursuant to subsection 2.4B(ii) or
2.4B(iii) which reduces the aggregate Revolving Loan Commitments to an
amount less than the then current amount of the Swing Line Loan Commitment
shall result in an automatic corresponding reduction of the Swing Line
Loan Commitment to the amount of the Revolving Loan Commitments, as so
reduced, without any further action on the part of Company, Administrative
Agent or Swing Line Lender. The Swing Line Loan Commitment shall expire on
September 30, 2000 if the Term Loans are not made on or before such date
or on the Revolving Loan Commitment Termination Date if the Term Loans are
made and all Swing Line Loans and all other amounts owed hereunder with
respect to the Swing Line Loans shall be paid in full no later than the
Revolving Loan Commitment Termination Date. Amounts borrowed under this
subsection 2.1A(iv) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
37 EXECUTION
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing Line
Lender may, at any time in its sole and absolute discretion, deliver to
Administrative Agent (with a copy to Company), no later than 1:00 P.M.
(New York City time) on the first Business Day in advance of the proposed
Funding Date, a notice (which shall be deemed to be a Notice of Borrowing
given by Company) requesting Revolving Lenders to make Revolving Loans
that are Base Rate Loans on such Funding Date in an amount equal to the
amount of such Swing Line Loans (the "Refunded Swing Line Loans")
outstanding on the date such notice is given which Swing Line Lender
requests Revolving Lenders to prepay. Anything contained in this Agreement
to the contrary notwithstanding, (i) the proceeds of such Revolving Loans
made by Revolving Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and
not to Company) and applied to repay a corresponding portion of the
Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, Swing Line Lender's Pro Rata Share of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made by
Swing Line Lender, and such portion of the Swing Line Loans deemed to be
so paid shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note of Swing Line Lender but shall
instead constitute part of Swing Line Lender's outstanding Revolving Loans
and shall be due under the Revolving Note of Swing Line Lender. Company
hereby authorizes Administrative Agent and Swing Line Lender to charge
Company's accounts with Administrative Agent and Swing Line Lender (up to
the amount available in each such account) in order to immediately pay
Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Revolving Lenders,
including the Revolving Loan deemed to be made by Swing Line Lender, are
not sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line
Lender should be recovered by or on behalf of Company from Swing Line
Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all Revolving Lenders in the manner contemplated by subsection 10.5.
Immediately upon funding of the Swing Line Loan, each
Revolving Lender shall be deemed to, and hereby agrees to, have purchased
a participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share of the unpaid amount of such Swing Line Loans together
with accrued interest thereon. Upon one Business Day's notice from Swing
Line Lender, each Revolving Lender shall deliver to Swing Line Lender an
amount equal to its respective participation in same day funds at the
Funding and Payment Office. In the event any Revolving Lender fails to
make available to Swing Line Lender the amount of such Revolving Lender's
participation as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Revolving Lender
together with interest thereon at the Federal Funds Effective Rate for
three Business Days and thereafter at the Base Rate. In the event Swing
Line Lender receives a payment of any amount in which other Revolving
Lenders have purchased participations as provided in this paragraph, Swing
Line Lender shall promptly distribute to each such other Revolving Lender
its Pro Rata Share of such payment.
38 EXECUTION
Anything contained herein to the contrary notwithstanding,
each Revolving Lender's obligation to make Revolving Loans for the purpose
of repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Revolving Lender's obligation to purchase a
participation in any unpaid Swing Line Loans pursuant to the immediately
preceding paragraph shall be absolute and unconditional and shall not be
affected by any circumstance, including (a) any set-off, counterclaim,
recoupment, defense or other right which such Revolving Lender may have
against Swing Line Lender, Company or any other Person for any reason
whatsoever; (b) the occurrence or continuation of an Event of Default or a
Potential Event of Default; (c) any adverse change in the business,
operations, properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries; (d) any breach of this
Agreement or any other Loan Document by any party thereto; or (e) any
other circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing; provided that such obligations of each Revolving
Lender are subject to satisfaction of one of the following conditions (X)
Swing Line Lender believes in good faith that all conditions under Section
4 to the making of the applicable Refunded Swing Line Loans or unpaid
Swing Line Loans, as the case may be, were satisfied at the time such
Refunded Swing Line Loans or unpaid Swing Line Loans were made or (Y) the
satisfaction of any such condition not satisfied has been waived in
accordance with subsection 10.6 prior to or at the time such Refunded
Swing Line Loans or other unpaid Swing Line Loans were made.
(v) Increases of the Revolving Loan Commitments. With the written
consent of Administrative Agent, Company may request in writing at any
time during the period from the Closing Date to and including July 31,
2005 that the then effective aggregate principal amount of Revolving Loan
Commitments be increased; provided that (1) the aggregate principal amount
of the increases in Revolving Loan Commitments pursuant to this subsection
2.1A(v) shall not exceed $35 million, (2) Company may not make more than
one request for such increase in Revolving Loan Commitments, (3) no Event
of Default or Potential Event of Default shall have occurred and be
continuing or shall occur as a result of such increases in Revolving Loan
Commitments, and (4) Company shall, and shall cause its Subsidiaries to,
execute and deliver such documents and instruments and take such other
actions (including, without limitation, obtaining appropriate endorsements
to title insurance policies) as may be reasonably requested by
Administrative Agent in connection with such increases. Any request under
this subsection 2.1A(v) shall be submitted by Company to Administrative
Agent (which shall forward copies to Lenders), specify the proposed
effective date and amount of such increase and be accompanied by an
Officer's Certificate stating that no Event of Default or Potential Event
of Default exists or will occur as a result of such increase. Company may
also specify any fees offered to those Lenders (the "Increasing Lenders")
which agree to increase the principal amount of their Revolving Loan
Commitments, which fees may be variable based upon the amount by which any
such Lender is willing to increase the principal amount of its Revolving
Loan Commitment. No Lender shall have any obligation, express or implied,
to offer to increase the aggregate principal amount of its Revolving Loan
Commitment. Only the consent of each Increasing Lender and Administrative
Agent shall be required for an increase in the aggregate principal amount
of Revolving Loan Commitments pursuant to this subsection 2.1A(v). No
Lender which elects not to increase the principal amount of
39 EXECUTION
its Revolving Loan Commitment may be replaced in respect of its existing
Revolving Loan Commitment as a result thereof without such Lender's
consent.
Each Increasing Lender shall as soon as practicable specify
the amount of the proposed increase which it is willing to assume. Company
may accept some or all of the offered amounts or designate new lenders who
qualify as Eligible Assignees and which are reasonably acceptable to
Administrative Agent as additional Lenders hereunder in accordance with
this subsection 2.1A(v) (each such new lender being a "New Lender"), which
New Lender may assume all or a portion of the increase in the aggregate
principal amount of the Revolving Loan Commitments. Company and
Administrative Agent shall have discretion jointly to adjust the
allocation of the increased aggregate principal amount of Revolving Loan
Commitments, among Increasing Lenders and New Lenders.
Each New Lender designated by Company and reasonably
acceptable to Administrative Agent shall become an additional party hereto
as a New Lender concurrently with the effectiveness of the proposed
increase in the aggregate principal amount of the Revolving Loan
Commitments, upon its execution of an Agreement of Joinder in the form of
Exhibit XIV (and, in each case, otherwise in form and substance reasonably
satisfactory to Administrative Agent).
Subject to the foregoing, any increase requested by Company
shall be effective as of the date proposed by Company and shall be in the
principal amount equal to (i) the principal amount which Increasing
Lenders are willing to assume as increases to the principal amount of
their Revolving Loan Commitments, plus (ii) the principal amount offered
by New Lenders with respect to Revolving Loan Commitments, in either case
as adjusted by Company and Administrative Agent pursuant to this
subsection 2.1A(v). Upon effectiveness of any such increase, the Pro Rata
Share of each Lender will be adjusted to give effect to the increase in
Revolving Loan Commitments, Administrative Agent shall distribute to
Lenders a revised Schedule 2.1 reflecting the Revolving Loan Commitment
and Pro Rata Share of each Lender after giving effect to such increase. To
the extent that the adjustment of Pro Rata Shares results in loss or
expenses to any Lender as a result of the prepayment of any Adjusted LIBO
Rate Loan on a date other than the scheduled last day of the applicable
Interest Period, Company shall be responsible for such loss or expense
pursuant to subsection 2.6D.
B. Borrowing Mechanics. Loans made on any Funding Date as Base Rate Loans
(other than Revolving Loans made pursuant to a request by Swing Line Lender
pursuant to subsection 2.1A(iii) for the purpose of repaying any Refunded Swing
Line Loans or Revolving Loans made pursuant to subsection 3.3B for the purpose
of reimbursing any Issuing Lender for the amount of a drawing under a Letter of
Credit issued by it) shall be in an aggregate minimum amount of $1 million and
multiples of $50,000 in excess of that amount; provided that Loans made on any
Funding Date as LIBO Rate Loans with a particular Interest Period shall be in an
aggregate minimum amount of $3 million and multiples of $500,000 in excess of
that amount. Swing Line Loans made on any Funding Date shall be in an aggregate
minimum amount of $200,000 and multiples of $50,000 in excess of that amount.
Whenever Company desires that Lenders make Loans it shall deliver to
Administrative Agent a Notice of Borrowing no later than 12:00 Noon (New York
City time) at least three Business Days in advance of the proposed Funding Date
(in
40 EXECUTION
the case of a LIBO Rate Loan) or at least one Business Day in advance of the
proposed Funding Date (in the case of a Base Rate Loan). Whenever Company
desires that Swing Line Lender make a Swing Line Loan, it shall deliver to
Administrative Agent a Notice of Borrowing no later than 1:00 P.M. (New York
City time) on the proposed Funding Date. The Notice of Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), (ii) the amount
and type of Loans requested, (iii) in the case of Swing Line Loans, that such
Loans shall be Base Rate Loans, (iv) whether such Loans shall be Base Rate Loans
or LIBO Rate Loans, and (v) in the case of any Loans requested to be made as
LIBO Rate Loans, the initial Interest Period requested therefor. Term Loans and
Revolving Loans may be continued as or converted into Base Rate Loans and LIBO
Rate Loans in the manner provided in subsection 2.2D. In lieu of delivering the
above-described Notice of Borrowing, Company may give Administrative Agent
telephonic notice by the required time of any proposed borrowing under this
subsection 2.1B; provided that such notice shall be confirmed in writing by
delivery of a Notice of Borrowing to Administrative Agent on the date of such
telephonic notice.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of
any Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a LIBO Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Loans (other than Swing Line Loans) under
this Agreement shall be made by Lenders simultaneously and proportionately to
their respective Pro Rata Shares of the Tranche A Term Loan Commitment, Tranche
B Term Loan Commitment and the Revolving Loan Commitment, as the case may be, it
being understood that no Lender shall be responsible for any default by any
other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant
to subsection 2.1B (or telephonic notice in lieu thereof), Administrative Agent
shall notify each Lender or Swing Line Lender, as the case may be, of the
proposed borrowing. Each Lender shall make the amount of its Loan available to
Administrative Agent not later than 1:00 P.M. (New York City time) on the
applicable Funding Date, and Swing Line Lender shall make the amount of its
Swing Line Loan available to
41 EXECUTION
Administrative Agent not later than 2:00 P.M. (New York City time) on the
applicable Funding Date, in each case in same day funds in Dollars, at the
Funding and Payment Office. Except as provided in subsection 2.1A(iii) or
subsection 3.3B with respect to Revolving Loans used to repay Refunded Swing
Line Loans or to reimburse any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it, upon satisfaction or waiver of the conditions
precedent specified in subsections 4.1 (in the case of Loans made on the Closing
Date), 4.2 (in the case of Loans made on the Merger Date) and 4.3 (in the case
of all Loans), Administrative Agent shall make the proceeds of such Loans
available to Company on the applicable Funding Date by causing an amount of same
day funds in Dollars equal to the proceeds of all such Loans received by
Administrative Agent from Lenders or Swing Line Lender, as the case may be, to
be credited to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified in writing by any
Lender prior to the Funding Date for any Loans that such Lender does not intend
to make available to Administrative Agent the amount of such Lender's Loan
requested on such Funding Date, Administrative Agent may assume that such Lender
has made such amount available to Administrative Agent on such Funding Date and
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to Company a corresponding amount on such Funding Date. If such
corresponding amount is not in fact made available to Administrative Agent by
such Lender, Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Funding Date until the date such amount is paid to
Administrative Agent, at the Federal Funds Effective Rate for three Business
Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
D. The Register.
(i) Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names and
addresses of Lenders and the Commitments and Loans of each Lender from
time to time (the "Register"). The Register shall be available for
inspection by Company or any Lender at any reasonable time and from time
to time upon reasonable prior notice. Upon the Company's written request,
the Administrative Agent shall provide the Company with a copy of the
Register.
(ii) Administrative Agent shall record in the Register the Tranche A
Term Loan Commitment, the Trance B Term Loan Commitment and the Revolving
Loan Commitment, and the Tranche A Term Loan, the Tranche B Term Loan and
the Revolving Loans from time to time of each Lender, the Swing Line Loan
Commitment and the Swing Line Loans from time to time of Swing Line
Lender, and each repayment or prepayment in respect of the principal
amount of the Tranche A Term Loan, the Tranche B Term Loan or the
Revolving Loans of each Lender or the Swing Line Loans of
42 EXECUTION
Swing Line Lender. Any such recordation shall be conclusive and binding on
Company and each Lender, absent error; provided that failure to make any
such recordation, or any error in such recordation, shall not affect any
Lender's Commitments or Company's Obligations in respect of any applicable
Loans.
(iii) Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of the
Tranche A Term Loan, the Tranche B Term Loan and each Revolving Loan made
by it and each payment in respect thereof. Any such recordation shall be
conclusive and binding on Company, absent error; provided that failure to
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in respect of any
applicable Loans; and provided further that in the event of any
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and owners of
the corresponding Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment or Loan shall
be effective, in each case unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by
Administrative Agent and recorded in the Register as provided in
subsection 10.1B(ii). Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving
such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of
the corresponding Commitments or Loans.
(v) Company hereby designates Administrative Agent to serve as
Company's agent solely for purposes of maintaining the Register as
provided in this subsection 2.1D, and Company hereby agrees that, to the
extent Administrative Agent serves in such capacity, Administrative Agent
and its officers, directors and employees shall constitute Indemnitees for
all purposes under subsection 10.3.
E. Evidence of Debt.
(i) The Register maintained by the Administrative Agent pursuant to
Section 2.1D shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the
date, amount and tenor, as applicable, of each Loan, the type of Loan and
the Interest Period applicable thereto, (ii) the terms of each Assignment
Agreement delivered to and accepted by it, (iii) the amount of any
principal or interest due and payable or to become due and payable from
the Company to each Lender hereunder, and (iv) the amount of any sum
received by the Administrative Agent from the Company hereunder and each
Lender's share thereof.
(ii) The entries made in the Register shall be conclusive and
binding for all purposes, absent manifest error.
43 EXECUTION
(iii) If, in the opinion of any Lender, a promissory note or other
evidence of debt is required, appropriate or desirable to reflect or
enforce the indebtedness of the Company resulting from a Tranche A Loan, a
Tranche B Loan, a Revolving Loan or a Swing Line Loan made, or to be made,
by such Lender to the Company, then, upon written request of such Lender,
the Company shall promptly execute and deliver to such Lender a promissory
note substantially in the form of Exhibit IV-A in the case of Tranche A
Loans, Exhibit IV-B in the case of Tranche B Loans, Exhibit IV-C in the
case of Revolving Loans and Exhibit IV-D in the case of Swing Line Loans,
payable to the order of such Lender in an amount up to the maximum amount
of Tranche A Loans, Tranche B Loans, Revolving Loans or Swing Line Loans,
as the case may be, payable or to be payable by Company to such Lender
from time to time hereunder.
(iv) Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes hereof unless and until an
Assignment Agreement effecting the assignment or transfer thereof shall
have been accepted by Administrative Agent as provided in subsection
10.1B(ii). Any request, authority or consent of any person or entity 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, assignee or transferee of that Note or of any Note or Notes issued
in exchange therefor.
F. Special Provisions Governing Foreign Currency Letters of Credit.
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Letters of Credit denominated
in a currency other than Dollars, in each case as to the matters covered:
(i) Calculation of Dollar Equivalent Amount of Foreign Currency
Letters of Credit. For purposes of determining (1) whether the Total
Utilization of Commitments exceeds the Revolving Loan Commitments then in
effect or (2) the Letter of Credit Usage, Administrative Agent shall
determine the Dollar Equivalent amounts with respect to any Letters of
Credit denominated in a currency other than Dollars (a) on the first
Business Day following each monthly anniversary of the issuance of such
Letter of Credit, and (b) at such other dates as Administrative Agent may
reasonably require (each such date under clauses (a) and (b) being a
"Computation Date"). Administrative Agent shall determine the Dollar
Equivalent amount for a particular Letter of Credit at the time a Request
for Issuance of Letter of Credit is given with respect to such Letter of
Credit.
(ii) European Monetary Union. The European Monetary Union (the
"European Monetary Union") anticipates the introduction of a single
currency and the substitution of such currency for the national currencies
of the member states participating in the European Monetary Union. On the
date on which any currency under which a Letter of Credit is issued is
replaced by such single currency, the conversion of any outstanding
Letters of Credit denominated in such foreign currency into such single
currency shall take effect; provided that the original foreign currency
shall be retained for so long as legally permissible; provided further
that any such conversion shall be based on the rate of conversion
officially fixed by the European Monetary Union on the date such single
currency replaces the applicable foreign currency. Notwithstanding
anything contained herein to the contrary, none of the introduction of
such single currency, the rate of
44 EXECUTION
conversion or any economic consequences that arise from any of the
aforementioned events or otherwise in connection with the European
Monetary Union shall give rise to any right to terminate prematurely,
contest, cancel, rescind, modify or renegotiate this Agreement or any of
its provisions or to raise any other objections and/or exceptions or to
assert any claim for compensation.
(iii) Limitation to Permitted Currencies. Letters of Credit issued
in a currency other than Dollars shall only be issued in a Permitted
Currency.
.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of subsections 2.6 and 2.7,
each Loan shall bear interest on the unpaid principal amount thereof from the
date made through maturity (whether by acceleration or otherwise) at a rate
determined by reference to the Base Rate or the Adjusted LIBO Rate. Subject to
the provisions of subsection 2.7, each Swing Line Loan shall bear interest on
the unpaid principal amount thereof from the date made through maturity (whether
by acceleration or otherwise) at a rate determined by reference to the Base
Rate. The applicable basis for determining the rate of interest with respect to
any Loan shall be selected by Company initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to subsection 2.1B, and
the basis for determining the interest rate with respect to any Loan may be
changed from time to time pursuant to subsection 2.2D. If on any day a Loan is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.
(i) Subject to the provisions of subsections 2.2E and 2.7, the
Tranche A Term Loans, the Tranche B Term Loans and the Revolving Loans
shall bear interest through maturity as follows:
(1) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin or
(2) if a LIBO Rate Loan, then at the sum of the Adjusted LIBO
Rate plus the Applicable LIBO Rate Margin.
(ii) Subject to the provisions of subsections 2.2E and 2.7, the
Swing Line Loans shall bear interest through maturity at the sum of the
Base Rate plus the Applicable Base Rate Margin for Revolving Loans minus
the Commitment Fee Percentage.
Upon delivery of a Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(xviii), each of the Applicable
Base Rate Margin and the Applicable LIBO Rate Margin shall automatically be
adjusted in accordance with such Margin Determination Certificate, such
adjustment to become effective on the next succeeding Business Day following the
receipt by Administrative Agent of such Margin Determination Certificate;
provided that if at any time a Margin Determination Certificate is not delivered
at the time required pursuant to subsection 6.1(xviii), the highest Applicable
Base Rate Margin or Applicable LIBO Rate Margin, as the case may be, shall be
applicable from such time until delivery of such Margin Determination
Certificate; provided further that if a Margin
45 EXECUTION
Determination Certificate erroneously indicates an applicable margin more
favorable to Company than should be afforded by the actual calculation of the
Consolidated Leverage Ratio, Company shall promptly pay additional interest,
letter of credit fees and all other applicable fees or commitment fees, as the
case may be, to correct such error.
B. Interest Periods. In connection with each LIBO Rate Loan, Company may,
pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"Interest Period") to be applicable to such Loan, which Interest Period shall
be, at Company's option, either a one, two, three or six month period; provided
that:
(i) the initial Interest Period for any LIBO Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a LIBO Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a LIBO Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a LIBO Rate Loan continued as such pursuant to a Notice of
Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that 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 that 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) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (v) of this subsection 2.2B, end on the
last Business Day of a calendar month;
(v) no Interest Period with respect to any portion of the Tranche A
Term Loans shall extend beyond July 31, 2006, no Interest Period with
respect to any portion of the Tranche B Term Loans shall extend beyond
July 31, 2007 and no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the Revolving Loan Commitment
Termination Date;
(vi) no Interest Period with respect to any portion of the Tranche A
Term Loans shall extend beyond a date on which Company is required to make
a scheduled payment of principal of the Tranche A Term Loans unless the
sum of (a) the aggregate principal amount of Tranche A Term Loans that are
Base Rate Loans plus (b) the aggregate principal amount of Tranche A Term
Loans that are LIBO Rate Loans with Interest Periods expiring on or before
such date equals or exceeds the principal amount required to be paid on
the Tranche A Term Loans on such date;
(vii) no Interest Period with respect to any portion of the Tranche
B Term Loans shall extend beyond a date on which Company is required to
make a scheduled payment of principal of the Tranche B Term Loans unless
the sum of (a) the aggregate principal
46 EXECUTION
amount of Tranche B Term Loans that are Base Rate Loans plus (b) the
aggregate principal amount of Tranche B Term Loans that are LIBO Rate
Loans with Interest Periods expiring on or before such date equals or
exceeds the principal amount required to be paid on the Tranche B Term
Loans on such date;
(viii) there shall be no more than ten Interest Periods outstanding
at any time; and
(ix) in the event Company fails to specify an Interest Period for
any LIBO Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected an
Interest Period of one month.
C. Interest Payments. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity); provided that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i),
interest accrued on such Swing Line Loans or Revolving Loans through the date of
such prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the provisions of subsection
2.6, Company shall have the option to convert at any time all or any part of its
outstanding Loans equal to $3 million and multiples of $500,000 in excess of
that amount from Loans bearing interest at a rate determined by reference to one
basis to Loans bearing interest at a rate determined by reference to an
alternative basis or (ii) upon the expiration of any Interest Period applicable
to a LIBO Rate Loan, to continue all or any portion of such Loan equal to $3
million and multiples of $500,000 in excess of that amount as a LIBO Rate Loan;
provided, however, that (i) a LIBO Rate Loan may only be converted into a Base
Rate Loan on the expiration date of an Interest Period applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a LIBO Rate Loan). A Notice of Conversion/Continuation shall
specify (i) the proposed conversion/continuation date (which shall be a Business
Day), (ii) the amount and type of the Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a conversion
to, or a continuation of, a LIBO Rate Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a LIBO Rate Loan, that
no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; provided that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/ Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
47 EXECUTION
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a LIBO
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2.00% per annum in excess of the interest rate
otherwise payable under this Agreement with respect to the applicable Loans (or,
in the case of any such fees and other amounts, at a rate which is 2.00% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided that, in the case of LIBO Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective such LIBO Rate Loans shall thereupon become Base Rate
Loans and shall thereafter bear interest payable upon demand at a rate which is
2.00% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans. Payment or acceptance of the increased rates of
interest provided for in this subsection 2.2E is not a permitted alternative to
timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of any Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed on the
basis of a 360-day year, in each case for the actual number of days elapsed in
the period during which it accrues. In computing interest on any Loan, the date
of the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a LIBO Rate
Loan, the date of conversion of such LIBO Rate Loan to such Base Rate Loan, as
the case may be, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted to a LIBO Rate Loan, the date of conversion
of such Base Rate Loan to such LIBO Rate Loan, as the case may be, shall be
excluded; provided that if a Loan is repaid on the same day on which it is made,
one day's interest shall be paid on that Loan.
.3 Fees.
A. Commitment Fees. Company agrees to pay to Administrative Agent, for
distribution to each Revolving Lender in proportion to that Lender's Pro Rata
Share of the Revolving Loan Commitments, commitment fees for the period from and
including the Closing Date to and excluding the Revolving Loan Commitment
Termination Date equal to (x) the average of the daily
48 EXECUTION
excess of the Revolving Loan Commitments over the Total Utilization of Revolving
Loan Commitments (but not including any outstanding Swing Line Loans) multiplied
by (y) the applicable Commitment Fee Percentage, such commitment fees to be
calculated on the basis of a 360-day year and the actual number of days elapsed
and to be payable quarterly in arrears on the last Business Day of each March,
June, September and December of each year, commencing on the first such date to
occur after the Closing Date, and on the Revolving Loan Commitment Termination
Date.
B. Other Fees. Company agrees to pay to Arranger and Administrative Agent
such other fees in the amounts and at the times separately agreed upon between
Company, Arranger and Administrative Agent (including that certain letter
agreement dated May 18, 2000 relating to fees for the Commitments and Loans made
hereunder).
C. Tranche B Term Loan Prepayment Fees. Voluntary payments or prepayments
of Tranche B Term Loans made on or before the second anniversary of the Closing
Date shall be accompanied by payment of a prepayment fee as follows:
(i) if such voluntary payment or prepayment is made on or before the
first anniversary of the Closing Date, a fee equal to 2% of the amount of
such voluntary payment or prepayment; and
(ii) if such voluntary payment or prepayment is made after the first
anniversary of the Closing Date but on or before the second anniversary of
the Closing Date, a fee equal to 1% of the amount of such voluntary
payment or prepayment.
.4 Repayments, Prepayments and Reductions in Loan Commitments; General
Provisions Regarding Payments.
A. Scheduled Payments of Term Loans.
(i) Company shall make principal payments on the Tranche A Term
Loans on each of the following dates in the aggregate amount set forth
opposite such date in the table set forth below:
------------------------------------------------------
Scheduled Repayment Date Scheduled Repayment
of Tranche A Term Loans
------------------------------------------------------
December 31, 2000 $750,000.00
March 31, 2001 $750,000.00
June 30, 2001 $750,000.00
September 30, 2001 $750,000.00
December 31, 2001 $1,500,000.00
March 31, 2002 $1,500,000.00
June 30, 2002 $1,500,000.00
September 30, 2002 $1,500,000.00
December 31, 2002 $2,250,000.00
March 31, 2003 $2,250,000.00
June 30, 2003 $2,250,000.00
49 EXECUTION
------------------------------------------------------
Scheduled Repayment Date Scheduled Repayment
of Tranche A Term Loans
------------------------------------------------------
September 30, 2003 $2,250,000.00
December 31, 2003 $3,000,000.00
March 31, 2004 $3,000,000.00
June 30, 2004 $3,000,000.00
September 30, 2004 $3,000,000.00
December 31, 2004 $3,750,000.00
March 31, 2005 $3,750,000.00
June 30, 2005 $3,750,000.00
September 30, 2005 $3,750,000.00
December 31, 2005 $3,750,000.00
March 31, 2006 $3,750,000.00
June 30, 2006 $3,750,000.00
September 30, 2006 $3,750,000.00
-----------------------
Total $ 60,000,000.00
; provided that the scheduled installments of principal of the Tranche A
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche A Term Loans in
accordance with subsection 2.4B(iv); and provided further that the Tranche
A Term Loans and all other amounts owed hereunder with respect to the
Tranche A Term Loans shall be paid in full no later than September 30,
2006, and the final installment payable by Company in respect of the
Tranche A Term Loans on such date shall be in an amount, if such amount is
different from that specified above, sufficient to repay all amounts owing
by Company under this Agreement with respect to the Tranche A Term Loans.
(i) Company shall make principal payments on the Tranche B Term
Loans on each of the following dates in the aggregate amount set forth
opposite such date in the table set forth below:
------------------------------------------------------
Scheduled Repayment Date Scheduled Repayment of
Tranche B Term Loans
------------------------------------------------------
December 31, 2000 $550,000.00
March 31, 2001 $550,000.00
June 30, 2001 $550,000.00
September 30, 2001 $550,000.00
50 EXECUTION
------------------------------------------------------
Scheduled Repayment Date Scheduled Repayment of
Tranche B Term Loans
------------------------------------------------------
December 31, 2001 $550,000.00
March 31, 2002 $550,000.00
June 30, 2002 $550,000.00
September 30, 2002 $550,000.00
December 31, 2002 $550,000.00
March 31, 2003 $550,000.00
June 30, 2003 $550,000.00
September 30, 2003 $550,000.00
December 31, 2003 $550,000.00
March 31, 2004 $550,000.00
June 30, 2004 $550,000.00
September 30, 2004 $550,000.00
December 31, 2004 $550,000.00
March 31, 2005 $550,000.00
June 30, 2005 $550,000.00
September 30, 2005 $550,000.00
December 31, 2005 $550,000.00
March 31, 2006 $550,000.00
June 30, 2006 $550,000.00
September 30, 2006 $550,000.00
December 31, 2006 $51,700,000.00
March 31, 2007 $51,700,000.00
June 30, 2007 $51,700,000.00
September 30, 2007 $51,700,000.00
-------------------------
Total $220,000,000.00
; provided that the scheduled installments of principal of the Tranche B
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans in
accordance with subsection 2.4B(iv); and provided further that the Tranche
B Term Loans and all other amounts owed hereunder with respect to the
Tranche B Term Loans shall be paid in full no later September 30, 2007,
and the final installment payable by Company in respect of the Tranche B
Term Loans on such date shall be in an amount, if such amount is different
from that specified above, sufficient to repay all amounts owing by
Company under this Agreement with respect to the Tranche B Term Loans.
51 EXECUTION
A. Prepayments of Loans and Unscheduled Reductions in Revolving Loan
Commitments.
(i) Voluntary Prepayments.
(a) Company may, upon written or telephonic notice to
Administrative Agent on or prior to 12:00 Noon (New York City time)
on the date of prepayment, which notice, if telephonic, shall be
promptly confirmed in writing, at any time and from time to time
prepay, without premium or penalty, any Swing Line Loan on any
Business Day in whole or in part in an aggregate minimum amount of
$100,000 and multiples of $50,000 in excess of that amount. Subject
to subsection 2.3C, Company may, upon not less than one Business
Day's prior written or telephonic notice, in the case of Base Rate
Loans, and three Business Days' prior written or telephonic notice,
in the case of LIBO Rate Loans, in each case given to Administrative
Agent by 12:00 Noon (New York City time) on the date required and,
if given by telephone, promptly confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time prepay,
without premium or penalty, any Loans on any Business Day in whole
or in part in an aggregate minimum amount of $500,000 and multiples
of $50,000 in excess of that amount; provided, however, that a LIBO
Rate Loan may only be prepaid on the expiration of the Interest
Period applicable thereto unless Company complies with subsection
2.6D with respect to any breakage costs resulting from such
prepayment being made on a date prior to the expiration of the
applicable Interest Period. Notice of prepayment having been given
as aforesaid, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date specified
therein. Any such voluntary prepayment shall be applied as specified
in subsection 2.4B(iv).
(b) In the event Company is entitled to replace a
non-consenting Lender pursuant to subsection 10.6B, Company shall
have the right, upon five Business Days' written notice to
Administrative Agent (which notice Administrative Agent shall
promptly transmit to each of the Lenders), to prepay all Loans,
together with accrued and unpaid interest, fees and other amounts
owing to such Lender (including without limitation amounts owing to
such Lender pursuant to subsection 2.6D and subsection 2.3C) in
accordance with subsection 10.6B so long as (1) in the case of the
prepayment of the Revolving Loans of any Lender pursuant to this
subsection 2.4B(i)(b), the Revolving Loan Commitment of such Lender
is terminated concurrently with such prepayment pursuant to
subsection 2.4B(ii)(b) (at which time Schedule 2.1 shall be deemed
modified to reflect the changed Revolving Loan Commitments), and (2)
in the case of the prepayment of the Loans of any Lender, the
consents required by subsection 10.6B in connection with the
prepayment pursuant to this subsection 2.4B(i)(b) shall have been
obtained, and at such time, such Lender shall no longer constitute a
"Lender" for purposes of this Agreement, except with respect to
indemnifications under this Agreement (including, without
limitation, subsections 2.6D, 2.7, 3.6, 10.2 and 10.3), which shall
survive as to such Lender.
52 EXECUTION
(ii) Voluntary Reductions of Loan Commitments.
(a) Company may, upon not less than three Business Days' prior
written or telephonic notice confirmed in writing to Administrative
Agent (which original written or telephonic notice Administrative
Agent will promptly transmit by telefacsimile or telephone to each
Revolving Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or penalty, the
Revolving Loan Commitments in an amount up to the amount by which
the Revolving Loan Commitments exceed the Total Utilization of
Revolving Loan Commitments at the time of such proposed termination
or reduction; provided that any such partial reduction shall be in
an aggregate minimum amount of $500,000 and multiples of $100,000 in
excess of that amount. Company's notice to Administrative Agent
shall designate the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction,
and such termination or reduction of the Revolving Loan Commitments
shall be effective on the date specified in Company's notice and
shall reduce the Revolving Loan Commitment of each Revolving Lender
proportionately to its Pro Rata Share.
(b) In the event Company is entitled to replace a
non-consenting Lender pursuant to subsection 10.6B, Company shall
have the right, upon five Business Days' written notice to
Administrative Agent (which notice Administrative Agent shall
promptly transmit to each of the Lenders), to terminate the entire
Revolving Loan Commitment of such Lender so long as (1) all Loans,
together with accrued and unpaid interest, fees and other amounts
owing to such Lender are repaid, including without limitation
amounts owing to such Lender pursuant to subsection 2.6D, pursuant
to subsection 2.4B(i)(b) concurrently with the effectiveness of such
termination (at which time Schedule 2.1 shall be deemed modified to
reflect such changed amounts), and (2) the consents required by
subsection 10.6B in connection with the prepayment pursuant to
subsection 2.4B(i)(b) shall have been obtained, and at such time,
such Lender shall no longer constitute a "Lender" for purposes of
this Agreement, except with respect to indemnifications under this
Agreement (including, without limitation, subsections 2.6D, 2.7,
3.6, 10.2 and 10.3), which shall survive as to such Lender.
(iii) Mandatory Prepayments and Mandatory Reductions of Loan
Commitments. The Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under the
circumstances set forth below, all such prepayments and/or reductions to
be applied as set forth below or as more specifically provided in
subsection 2.4B(iv):
(a) Prepayments and Reductions From Net Asset Sale Proceeds.
No later than the first Business Day following the date of receipt
by Company or any of its Subsidiaries of any Net Asset Sale Proceeds
in respect of any Asset Sale, Company shall prepay the Loans and/or
the Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 100% of such Net Asset Sale Proceeds minus
any such Net Asset Sale Proceeds (the "Proposed Asset Sale
53 EXECUTION
Reinvestment Proceeds") that Company or any Subsidiary intends to
use within 360 days of such date of receipt to acquire any asset
used or useful to the Company or such Subsidiary in conducting its
business; provided that Company shall have delivered to
Administrative Agent, on or before such first Business Day, an
Officer's Certificate setting forth the proposed use of the Proposed
Asset Sale Reinvestment Proceeds and such other information with
respect to such proposed use as Administrative Agent may reasonably
request. In addition, no later than 360 days after receipt of any
Net Asset Sale Proceeds, Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an amount
equal to the amount of any related Proposed Asset Sale Reinvestment
Proceeds that have not been applied to the purchase of an asset by
Company or such Subsidiary as provided above; provided further that
the aggregate amount of any such Proposed Asset Sale Reinvestment
Proceeds so reinvested in the business of Company or any Subsidiary
shall not exceed $20 million for any Fiscal Year.
If, following the receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds, Company is required to
apply or cause to be applied any portion of such Net Asset Sale
Proceeds to prepay any Indebtedness evidenced by any of the Related
Agreements pursuant to the applicable Related Agreement, then,
notwithstanding anything contained in this subsection 2.4B(iii)(a),
Company shall prepay the Loans and/or reduce the Revolving Loan
Commitments as set forth in this subsection 2.4B(iii)(a) so as to
eliminate any obligation to prepay such Indebtedness.
(b) Prepayments and Reductions from Net Insurance/Condemnation
Proceeds. No later than the fifth Business Day following the date of
receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds, Company
shall, or shall instruct the Administrative Agent to, prepay the
Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 100% of the amount of such
Net Insurance/Condemnation Proceeds minus any such Net
Insurance/Condemnation Proceeds (the "Proposed Reinvestment
Proceeds") that Company or such Subsidiary intends to use within 360
days of such date of receipt to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which
such Net Insurance/Condemnation Proceeds were received; provided
that Company shall have delivered to Administrative Agent, on or
before such first Business Day, an Officer's Certificate setting
forth the proposed use of the Proposed Reinvestment Proceeds and
such other information with respect to such proposed use as
Administrative Agent may reasonably request. In addition, no later
than 360 days after receipt of any Net Insurance/Condemnation
Proceeds, Company shall prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an amount equal to the
amount of any related Proposed Reinvestment Proceeds that have not
been applied to the costs of repairing, restoring or replacing the
applicable assets of Company or such Subsidiary as provided above;
provided further that the aggregate amount of any such Proposed
Reinvestment Proceeds so applied to such repair, restoration or
replacement shall not exceed $35 million for any Fiscal Year.
54 EXECUTION
(c) Prepayments and Reductions Due to Issuance of Equity
Securities. No later than the first Business Day following receipt
by Company or any of its Subsidiaries of the Cash proceeds (any such
Cash proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "Net Equity Securities
Proceeds"), from the issuance of equity Securities of Company (other
than Net Equity Proceeds from the Convertible Preferred Stock and
proceeds from common equity Securities (including options, warrants
or other convertible equity securities) of Company issued to
officers, employees, directors, consultants and certain other
qualified persons of Company and its Subsidiaries pursuant to option
plans or other similar plans or agreements adopted by Company's
Board of Directors), Company shall prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 50% of such Net Equity Securities
Proceeds.
(d) Prepayments and Reductions Due to Issuance of Debt
Securities. No later than the first Business Day following receipt
by Company or any of its Subsidiaries of the Cash proceeds (any such
Cash proceeds, net of underwriting discounts and commissions and
other reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "Net Debt Securities
Proceeds"), from the issuance of debt Securities of Company or any
of its Subsidiaries after the Closing Date (including the Net Debt
Securities Proceeds of Indebtedness permitted under subsection
7.1(x) but excluding the Net Debt Securities Proceeds of
Indebtedness permitted under subsection 7.1 as in effect on the
Closing Date (other than subsection 7.1(x)), Company shall prepay
the Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 100% of such Net Debt
Securities Proceeds.
(e) Prepayments and Reductions from Consolidated Excess Cash
Flow. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year (commencing with the Fiscal Year ending on or
about December 31, 2001), Company shall, no later than ninety (90)
days after the end of such Fiscal Year, prepay the Loans and/or the
Revolving Loan Commitments shall be permanently reduced in an
aggregate amount equal to 50% of such Consolidated Excess Cash Flow;
provided that such percentage shall be reduced to 25% if the
Consolidated Leverage Ratio as at the last day of such Fiscal Year
is less than 3.00:1.00.
(f) Prepayments Due to Restrictions on Revolving Loans
Commitments or Currency Fluctuations. Company shall from time to
time prepay first the Swing Line Loans and second the Revolving
Loans to the extent necessary so that the Total Utilization of
Revolving Loan Commitments shall not exceed the Revolving Loan
Commitments then in effect. If on any Computation Date
Administrative Agent shall have determined that the Total
Utilization of Revolving Loan Commitments exceeds the Revolving Loan
Commitments because of a change in applicable rates of exchange
between Dollars and any other currency under which a Letter of
Credit has been issued, then Administrative Agent shall give notice
to the Company that a prepayment is required under this subsection
2.4B(iii)(f) and
55 EXECUTION
Company shall promptly (x) prepay first its Swing Line Loans and
second its Revolving Loans and/or (y) cash collateralize its
outstanding Letters of Credit by depositing Dollars into the
Collateral Account established under the Security Agreement, in each
case to the extent necessary so that the Total Utilization of
Revolving Loan Commitments shall not exceed the Revolving Loan
Commitments.
(g) Calculations of Net Proceeds Amounts; Additional
Prepayments and Reductions Based on Subsequent Calculations.
Concurrently with any prepayment of the Loans and/or reduction of
the Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(e), Company shall deliver to Administrative Agent an
Officer's Certificate demonstrating the calculation of the amount
(the "Net Proceeds Amount") of the applicable Net Asset Sale
Proceeds or Net Insurance/Condemnation Proceeds, or Net Equity
Securities Proceeds (as such term is defined in subsection
2.4B(iii)(c)) or Net Debt Securities Proceeds (as such term is
defined in subsection 2.4B(iii)(d)) or the applicable Consolidated
Excess Cash Flow, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that Company shall
subsequently determine that the actual Net Proceeds Amount exceeded
the amount set forth in such Officer's Certificate by $100,000 or
more, Company shall promptly make an additional prepayment of the
Loans (and/or, if applicable, the Revolving Loan Commitments shall
be permanently reduced) in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to
Administrative Agent an Officer's Certificate demonstrating the
derivation of the additional Net Proceeds Amount resulting in such
excess.
(iv) Application of Prepayments.
(a) Application of Voluntary Prepayments by Type of Loans and
Order of Maturity. Any voluntary prepayments pursuant to subsection
2.4B(i) shall be applied to the Loans as specified by Company in the
applicable notice of prepayment; provided that in the event Company
fails to specify the Loans to which any such prepayment shall be
applied, such prepayment shall be applied first to repay outstanding
Swing Line Loans to the full extent thereof, second to repay
outstanding Revolving Loans to the full extent thereof and third to
repay outstanding Term Loans to the full extent thereof. Any
voluntary prepayments of the Term Loans pursuant to subsection
2.4B(i) (whether the application thereof is specified by Company or
not) shall be applied to prepay the Tranche A Term Loans and the
Tranche B Term Loans on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) and shall be
applied on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) to each scheduled installment
of principal of the Tranche A Term Loans or the Tranche B Term
Loans, as the case may be, set forth in subsection 2.4A(i) or
2.4A(ii), respectively, that is unpaid at the time of such
prepayment; provided that, notwithstanding anything to the contrary
contained in the sentence immediately preceding this proviso, up to
the first $25 million of any voluntary prepayment of the Term Loans
shall be applied to prepay the Tranche A Term Loans or Tranche B
Term Loans, or both, as the case may be, as specified by the Company
and shall
56 EXECUTION
be applied on a pro rata basis (in accordance with the respective
outstanding principal thereof) to each scheduled installment of
principal of the Tranche A Term Loans or the Tranche B Term Loans,
as the case may be, set forth in subsection 2.4A(i) or 2.4A(ii),
respectively, that is unpaid at the time of such prepayment.
(b) Application of Mandatory Prepayments by Type of Loans. Any
amount (the "Applied Amount") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(e) shall be
applied first to prepay the Term Loans to the full extent thereof as
provided in subsection 2.4B(iv)(c), second, to the extent of any
remaining portion of the Applied Amount, to prepay the Swing Line
Loans to the full extent thereof and to permanently reduce the
Revolving Loan Commitments by the amount of such prepayment, third,
to the extent of any remaining portion of the Applied Amount, to
prepay the Revolving Loans to the full extent thereof and to further
permanently reduce the Revolving Loan Commitments by the amount of
such prepayments, and fourth, to the extent of any remaining portion
of the Applied Amount, to further permanently reduce the Revolving
Loan Commitments to the full extent thereof; provided, however that
the Revolving Loan Commitments shall not be reduced pursuant to this
subsection 2.4B(iv)(b) to an amount less than $35 million.
(c) Application of Mandatory Prepayments to Term Loans and the
Scheduled Installments of Principal Thereof. Any mandatory
prepayments of the Term Loans pursuant to subsection 2.4B(iii) shall
be applied to prepay the Tranche A Term Loans and the Tranche B Term
Loans on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and shall be applied on a pro
rata basis (in accordance with the respective outstanding principal
amounts thereof) to each scheduled installment of principal of the
Tranche A Term Loans or the Tranche B Term Loans, as the case may
be, set forth in subsection 2.4A(i) or 2.4A(ii), respectively, that
is unpaid at the time of such prepayment; provided, however, that
Tranche B Term Lenders shall have the option to waive their rights
to receive any such prepayment (a "Waivable Mandatory Prepayment").
In the event any such Tranche B Term Lender desires to waive such
Lender's right to receive such Waivable Mandatory Prepayment, (1)
such Tranche B Term Lender shall so advise Administrative Agent in
writing no later than the close of business on the Business Day
following the date it receives notice of the prepayment from
Administrative Agent and (2) upon receipt of such written advice
from such Tranche B Term Lender, Administrative Agent shall apply
the amount so waived by such Tranche B Term Lender to prepay the
Tranche A Term Loans and to reduce the unpaid scheduled installments
of principal on the Tranche A Term Loans set forth in subsection
2.4A(i) on a pro rata basis and apply the remainder of the amount so
waived by such Lender to prepay the Revolving Loans. Company shall
use its best efforts to notify Administrative Agent (which shall
promptly notify the Tranche B Term Lenders) of any Waivable
Mandatory Prepayment at least three Business Days prior to the
payment to Administrative Agent of such Waivable Mandatory
Prepayment.
57 EXECUTION
(d) Application of Prepayments to Base Rate Loans and LIBO
Rate Loans. Considering Tranche A Term Loans, Tranche B Term Loans
and Revolving Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the full extent thereof
before application to LIBO Rate Loans, in each case in a manner
which minimizes the amount of any payments required to be made by
Company pursuant to subsection 2.6D.
B. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without defense, setoff
or counterclaim, free of any restriction or condition, and delivered to
Administrative Agent not later than 2:00 P.M. (New York City time) on the
date due at the Funding and Payment Office for the account of Lenders;
funds received by Administrative Agent after that time on such due date
shall be deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to charge its
accounts with Administrative Agent in order to cause timely payment to be
made to Administrative Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in its accounts
for that purpose).
(ii) Application of Payments to Principal and Interest. Except as
provided in subsection 2.2C, all payments in respect of the principal
amount of any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Loan on a date when interest is
due and payable with respect to such Loan) shall be applied to the payment
of interest before application to principal.
(iii) Apportionment of Payments. Aggregate principal and interest
payments in respect of Loans shall be apportioned among all outstanding
Loans to which such payments relate, in each case proportionately to
Lenders' respective Pro Rata Shares. Administrative Agent shall promptly
distribute to each Lender, at its primary address set forth below its name
on the appropriate signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when received
by Administrative Agent pursuant to subsection 2.3. Notwithstanding the
foregoing provisions of this subsection 2.4C(iii), if, pursuant to the
provisions of subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender makes Base
Rate Loans in lieu of its Pro Rata Share of any LIBO Rate Loans,
Administrative Agent shall give effect thereto in apportioning payments
received thereafter.
(iv) Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may
be.
58 EXECUTION
(v) Notation of Payment. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with respect to any
Loan or any payments of principal or interest on such Note.
C. Application of Proceeds of Collateral and Payments Under Guaranties
(i) Application of Proceeds of Collateral. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net Asset Sale
Proceeds, all proceeds received by Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document may, in the discretion of
Administrative Agent, be held by Administrative Agent as Collateral for,
and/or (then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations (as
defined in such Collateral Document) in the following order of priority:
(a) To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation
to Administrative Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by
Administrative Agent in connection therewith, and all amounts for
which Administrative Agent is entitled to indemnification under such
Collateral Document and all advances made by Administrative Agent
thereunder for the account of the applicable Loan Party, and to the
payment of all costs and expenses paid or incurred by Administrative
Agent in connection with the exercise of any right or remedy under
such Collateral Document, all in accordance with the terms of this
Agreement and such Collateral Document;
(b) thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the ratable
benefit of the holders thereof;
(c) thereafter, to the extent of any excess such proceeds, to
the payment of cash collateral for Letters of Credit for the ratable
benefit of the Issuing Lenders thereof and holders of participations
therein; and
(d) thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
(ii) Application of Payments Under Subsidiary Guaranty. All payments
received by Administrative Agent under the Subsidiary Guaranty shall be
applied promptly from time to time by Administrative Agent in the
following order of priority:
(a) to the payment of the costs and expenses of any collection
or other realization under the Subsidiary Guaranty, including
reasonable compensation to
59 EXECUTION
Administrative Agent and its agents and counsel, and all expenses,
liabilities and advances made or incurred by Administrative Agent in
connection therewith, all in accordance with the terms of this
Agreement and the Subsidiary Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in the
Subsidiary Guaranty) for the ratable benefit of the holders thereof;
(c) thereafter, to the extent of any excess such payments, to
the payment of cash collateral for Letters of Credit for the ratable
benefit of the Issuing Lenders thereof and holders of participations
therein; and
(d) thereafter, to the extent of any excess such payments, to
the payment to the applicable Subsidiary Guarantor or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
.2 Use of Proceeds.
A. Term Loans. On the Closing Date, after application of approximately
$3.9 million in cash on hand, the cash proceeds, if any, of $150 million of the
Senior Subordinated Notes and $110 million of the Convertible Preferred Stock,
both as described in subsection 4.1D, then the proceeds of the Term Loans shall
be applied by Company to pay any remaining Acquisition Financing Requirements on
the Closing Date.
B. Revolving Loans; Swing Line Loans. On the Closing Date, after the
application of the proceeds of the Term Loans, then approximately $3.0 million
of the proceeds of the Revolving Loans and any Swing Line Loans may be applied
to pay any remaining Acquisition Financing Requirements to be paid on the
Closing Date and the remaining proceeds of the Revolving Loans shall be applied
by Company for working capital and general corporate purposes, which may include
the making of interest payments on the Loans, Permitted Acquisitions, the
payment of any remaining Acquisition Financing Requirements to be paid after the
Closing Date and the making of intercompany loans to any of Company's
Subsidiaries in accordance with subsection 7.1(iv) for their own working capital
purposes, and Letters of Credit may be issued for the purposes set forth in the
definition of such term.
C. Margin Regulations. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation U, Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such borrowing
and such use of proceeds.
.3 Special Provisions Governing LIBO Rate Loans.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to LIBO Rate Loans
as to the matters covered:
60 EXECUTION
A. Determination of Applicable Interest Rate. As soon as practicable after
10:00 A.M. (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the LIBO Rate Loans for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Company and each
Lender.
B. Inability to Determine Applicable Interest Rate. In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any LIBO Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted LIBO Rate, Administrative Agent
shall on such date give notice (by telefacsimile or by telephone confirmed in
writing) to Company and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, LIBO Rate Loans until such time as
Administrative Agent notifies Company and Lenders that the circumstances giving
rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to the Loans in respect
of which such determination was made shall be deemed to be rescinded by Company.
C. Illegality or Impracticability of LIBO Rate Loans. In the event that on
any date any Lender shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto but shall be made only after
consultation with Company and Administrative Agent) that the making, maintaining
or continuation of its LIBO Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material hardship, as a result
of contingencies occurring after the date of this Agreement which materially and
adversely affect the London interbank market or the position of such Lender in
that market, then, and in any such event, such Lender shall be an "Affected
Lender" and it shall on that day give notice (by telefacsimile or by telephone
confirmed in writing) to Company and Administrative Agent of such determination
(which notice Administrative Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to make Loans as,
or to convert Loans to, LIBO Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender, (b) to the extent such determination
by the Affected Lender relates to a LIBO Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan as (or convert
such Loan to, as the case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding LIBO Rate Loans (the "Affected Loans")
shall be terminated at the earlier to occur of the expiration of the Interest
Period then in effect with respect to the Affected Loans or when required by
law, and (d) the Affected Loans shall automatically convert into Base Rate Loans
on the date of such termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a LIBO Rate
Loan then being requested by Company pursuant to a Notice of Borrowing or a
Notice of Conversion/Continuation, Company shall have the option, subject to the
provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to
61 EXECUTION
all Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender). Except as provided in the immediately preceding sentence, nothing in
this subsection 2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans to, LIBO Rate
Loans in accordance with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth in reasonable detail the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including any
interest paid by that Lender to lenders of funds borrowed by it to make or carry
its LIBO Rate Loans and any loss, expense or liability sustained by that Lender
in connection with the liquidation or re-employment of such funds) which that
Lender may sustain: (i) if for any reason (other than a default by that Lender)
a borrowing of any LIBO Rate Loan does not occur on a date specified therefor in
a Notice of Borrowing or a telephonic request for borrowing, or a conversion to
or continuation of any LIBO Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any prepayment
pursuant to subsection 2.4B(i)) or other principal payment or any conversion of
any of its LIBO Rate Loans occurs on a date prior to the last day of an Interest
Period applicable to that Loan, (iii) if any prepayment of any of its LIBO Rate
Loans is not made on any date specified in a notice of prepayment given by
Company, or (iv) as a consequence of any other default by Company in the
repayment of its LIBO Rate Loans when required by the terms of this Agreement.
E. Booking of LIBO Rate Loans. Any Lender may make, carry or transfer LIBO
Rate Loans at, to, or for the account of any of its branch offices or the office
of an Affiliate of that Lender.
F. Assumptions Concerning Funding of LIBO Rate Loans. Calculation of all
amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A
shall be made as though that Lender had actually funded each of its relevant
LIBO Rate Loans through the purchase of a LIBO deposit bearing interest at the
rate obtained pursuant to clause (i) of the definition of Adjusted LIBO Rate in
an amount equal to the amount of such LIBO Rate Loan and having a maturity
comparable to the relevant Interest Period and through the transfer of such LIBO
deposit from an offshore office of that Lender to a domestic office of that
Lender in the United States of America; provided, however, that each Lender may
fund each of its LIBO Rate Loans in any manner it sees fit and the foregoing
assumptions shall be utilized only for the purposes of calculating amounts
payable under this subsection 2.6 and under subsection 2.7A.
G. LIBO Rate Loans After Default. After the occurrence of and during the
continuation of a Potential Event of Default or an Event of Default, (i) Company
may not elect to have a Loan be made or maintained as, or converted to, a LIBO
Rate Loan after the expiration of any Interest Period then in effect for that
Loan and (ii) subject to the provisions of subsection 2.6D, any Notice of
Borrowing or Notice of Conversion/Continuation given by Company with respect to
a requested borrowing or conversion/continuation that has not yet occurred shall
be deemed to be rescinded by Company.
62 EXECUTION
.4 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) that the adoption, effectiveness, phase-in or
applicability after the date hereof of any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof, or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender (other than any such
reserve or other requirements with respect to LIBO Rate Loans that are
reflected in the definition of Adjusted LIBO Rate); or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the London interbank market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto in an amount deemed by such Lender (in its sole discretion) to
be material; then, in any such case, Company shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or 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 may be necessary to compensate such Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Such Lender shall
deliver to Company (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Lender under this subsection 2.7A, which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
63 EXECUTION
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by Company under
this Agreement and the other Loan Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net
income of any Lender) imposed, levied, collected, withheld or assessed by
or within the United States of America or any political subdivision in or
of the United States of America or any other jurisdiction from which a
payment is made by or on behalf of Company or by any federation or
organization of which the United States of America or any such
jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If Company or any other Person is
required by law to make any deduction or withholding on account of any
such Tax from any sum paid or payable by Company to Administrative Agent
or any Lender under any of the Loan Documents:
(a) Company shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Company
becomes aware of it;
(b) Company shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability
to pay is imposed on Company) for its own account or (if that
liability is imposed on Administrative Agent or such Lender, as the
case may be) on behalf of and in the name of Administrative Agent or
such Lender;
(c) the sum payable by Company in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making
of that deduction, withholding or payment, Administrative Agent or
such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction,
withholding or payment been required or made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30
days after the due date of payment of any Tax which it is required
by clause (b) above to pay, Company shall deliver to Administrative
Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to
the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature
pages hereof) or after the date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender)
affecting any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of this
Agreement or at the date of such Assignment Agreement, as the case may be,
in respect of payments to such Lender.
64 EXECUTION
(iii) Evidence of Exemption from U.S. Withholding Tax.
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "Non-US Lender") shall deliver to Administrative Agent
for transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on or
prior to the date of the Assignment Agreement pursuant to which it
becomes a Lender (in the case of each other Lender), and at such
other times as may be necessary in the determination of Company or
Administrative Agent (each in the reasonable exercise of its
discretion), (1) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms), properly completed and
duly executed by such Lender, together with any other certificate or
statement of exemption required under the Internal Revenue Code or
the regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Loan
Documents or (2) if such Lender is not a "bank" or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate re Non-Bank Status
together with two original copies of Internal Revenue Service Form
W-8 (or any successor form), properly completed and duly executed by
such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to any payments to such Lender of interest payable
under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such Lender
of such forms, certificates or other evidence, whenever a lapse in
time or change in circumstances renders such forms, certificates or
other evidence obsolete or inaccurate in any material respect, that
such Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a Certificate re Non-Bank Status and
two original copies of Internal Revenue Service Form W-8, as the
case may be, properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption
required in order to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income
tax with respect to payments to such Lender under the Loan Documents
or (2) notify Administrative Agent and Company of its inability to
deliver any such forms, certificates or other evidence.
(c) Company shall not be required to pay any additional amount
to any Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have
65 EXECUTION
failed to satisfy the requirements of clause (a) or (b)(1) of this
subsection 2.7B(iii); provided that if such Lender shall have
satisfied the requirements of subsection 2.7B(iii)(a) on the Closing
Date (in the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement pursuant to which
it became a Lender (in the case of each other Lender), nothing in
this subsection 2.7B(iii)(c) shall relieve Company of its obligation
to pay any additional amounts pursuant to clause (c) of subsection
2.7B(ii) in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or
any change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding
as described in subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or 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 any Lender
(or its applicable lending office) with any guideline, request or directive
regarding capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Commitments or Letters of Credit or participations
therein or other obligations hereunder with respect to the Loans or the Letters
of Credit to a level below that which such Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the policies of
such Lender or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt by Company from
such Lender of the statement referred to in the next sentence, Company shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or such controlling corporation on an after-tax basis for such reduction. Such
Lender shall deliver to Company (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis of the calculation of
such additional amounts, which statement shall be conclusive and binding upon
all parties hereto absent manifest error.
.5 Obligation of Lenders and Issuing Lenders to Mitigate; Replacement of Lender.
A. Mitigation. Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the existence
of a condition that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments under subsection
2.7 or subsection 3.6, it will, to the extent not inconsistent with the internal
policies of such Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or maintain the
Commitments of such Lender or the affected Loans or Letters of Credit of such
Lender or Issuing Lender through another lending or letter of credit office of
such Lender or Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the circumstances
which would cause
66 EXECUTION
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender or Issuing
Lender pursuant to subsection 2.7 or subsection 3.6 would be materially reduced
and if, as determined by such Lender or Issuing Lender in its sole discretion,
the making, issuing, funding or maintaining of such Commitments or Loans or
Letters of Credit through such other lending or letter of credit office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or Letters of Credit or
the interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter of
credit office pursuant to this subsection 2.8 unless Company agrees to pay all
incremental expenses incurred by such Lender or Issuing Lender as a result of
utilizing such other lending or letter of credit office as described in clause
(i) above. A certificate as to the amount of any such expenses payable by
Company pursuant to this subsection 2.8 (setting forth in reasonable detail the
basis for requesting such amount) submitted by such Lender or Issuing Lender to
Company (with a copy to Administrative Agent) shall be conclusive absent
manifest error.
B. Replacement of Lender. If Company receives a notice pursuant to
subsection 2.7A, 2.7B, 2.7C or 3.6, a Lender defaults in its obligations
hereunder or in the event a Lender has not consented to a proposed change,
waiver, discharge or termination with respect to this Agreement which requires
the consent of all Lenders and which has been approved by Requisite Lenders, as
provided in subsection 10.6B, Company shall have the right, if no Potential
Event of Default or Event of Default then exists, to replace such Lender (a
"Replaced Lender") with one or more Eligible Assignees (collectively, the
"Replacement Lender") acceptable to Administrative Agent; provided that (i) at
the time of any replacement pursuant to this subsection 2.8, the Replacement
Lender shall enter into one or more Assignment Agreements pursuant to subsection
10.1B (and with all fees payable pursuant to subsection 10.1B to be paid by the
Replacement Lender) pursuant to which the Replacement Lender shall acquire all
of the outstanding Loans and Commitments of, and in each case participations in
Letters of Credit and Swing Line Loans 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 with respect to Letters of Credit 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 with respect
thereto, (y) the appropriate Issuing Lender an amount equal to such Replaced
Lender's Pro Rata Share of any unpaid drawings with respect to Letters of Credit
(which at such time remains an unpaid drawing) issued by it to the extent such
amount was not theretofore funded by such Replaced Lender, and (z) Swing Line
Lender an amount equal to such Replaced Lender's Pro Rata Share of any Refunded
Swing Line Loans to the extent such amount was not theretofore funded by such
Replaced Lender, and (ii) all obligations (including without limitation all such
amounts, if any, owing under subsection 2.6D and, except in the case in which
Company is replacing such Replaced Lender because such Replaced Lender has
defaulted in its obligations hereunder, all fees which become payable as a
result of such replacement under subsection 2.3C (it being acknowledged and
agreed that such replacement shall be deemed to be a voluntary prepayment of the
Loans of the Replaced Lender for purposes of subsection 2.3C)) of Company 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
67 EXECUTION
paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the respective Assignment Agreements, recordation of such
assignment in the Register by Administrative Agent pursuant to subsection 2.1D,
the payment of amounts referred to in clauses (i) and (ii) above and delivery to
the Replacement Lender of the appropriate Note or Notes executed by Company, 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 under this Agreement which by the terms of this Agreement survive the
termination of this Agreement, which indemnification provisions shall survive as
to such Replaced Lender. Notwithstanding anything to the contrary contained
above, no Issuing Lender may be replaced hereunder at any time while it has
Letters of Credit outstanding hereunder unless arrangements satisfactory to such
Issuing Lender (including the furnishing of a Standby Letter of Credit in form
and substance, and issued by an issuer, satisfactory to such Issuing Lender or
the furnishing of cash collateral in amounts and pursuant to arrangements
satisfactory to such Issuing Lender) have been made with respect to such
outstanding Letters of Credit.
Section 2. LETTERS OF CREDIT
.1 Issuance of Letters of Credit and Lenders' Purchase of Participations
Therein.
A. Letters of Credit. In addition to Company requesting that Revolving
Lenders make Revolving Loans pursuant to subsection 2.1A(iii) and that Swing
Line Lender make Swing Line Loans pursuant to subsection 2.1A(iv), Company may
request, in accordance with the provisions of this subsection 3.1, from time to
time during the period from the Closing Date to but excluding the date which is
thirty (30) days prior to the Revolving Loan Commitment Termination Date, that
one or more Revolving Lenders issue Letters of Credit negotiated on a sight
basis for the account of Company for the purposes specified in the definitions
of Commercial Letters of Credit and Standby Letters of Credit. Subject to the
terms and conditions of this Agreement and in reliance upon the representations
and warranties of Company herein set forth, any one or more Revolving Lenders
may, but (except as provided in subsection 3.1B(ii)) shall not be obligated to,
issue such Letters of Credit in accordance with the provisions of this
subsection 3.1; provided that Company shall not request that any Revolving
Lender issue (and no Revolving Lender shall issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $25 million;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (a) the date which is ten (10) Business Days prior to
the Revolving Loan Commitment Termination Date and (b) the date that is
one year from the date of issuance of such Standby Letter of Credit;
provided that the immediately preceding clause (b) shall not prevent any
Issuing Lender from agreeing that a Standby Letter of Credit will
automatically be extended for one or more successive periods not to exceed
one year each unless such Issuing Lender elects not to extend for any such
additional period; and
68 EXECUTION
provided further that such Issuing Lender shall elect not to extend such
Standby Letter of Credit if it has knowledge that an Event of Default has
occurred and is continuing (and has not been waived in accordance with
subsection 10.6) at the time such Issuing Lender must elect whether or not
to allow such extension;
(iv) any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is thirty (30) days prior to
the Revolving Loan Commitment Termination Date and (Y) the date which is
180 days from the date of issuance of such Commercial Letter of Credit or
(b) that is otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion;
(v) any Letter of Credit at a tenor other than at sight; or
(vi) any Letter of Credit denominated in a currency other than
Dollars if, after giving effect to such issuance, the Dollar Equivalent of
the Letter of Credit Usage for all Letters of Credit denominated in a
currency other than Dollars would exceed $25 million.
B. Mechanics of Issuance.
(i) Request for Issuance. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to the proposed Issuing Lender (with,
simultaneously, a copy to Administrative Agent if Administrative Agent is
not the proposed Issuing Lender) a Request for Issuance of Letter of
Credit in the form of Exhibit III annexed hereto no later than 12:00 Noon
(New York City time) at least five Business Days, or such shorter period
as may be agreed to by the Issuing Lender in any particular instance, in
advance of the proposed date of issuance. The Issuing Lender, in its
reasonable discretion, may require changes in the text of the proposed
Letter of Credit or any documents described in or attached to the Request
for Issuance of Letter of Credit. No Letter of Credit shall require
payment against a conforming demand for payment to be made thereunder on
the same business day (under the laws of the jurisdiction in which the
office of the Issuing Lender to which such demand for payment is required
to be presented is located) that such demand for payment is presented if
such presentation is made after 10:00 A.M. (in the time zone of such
office of the Issuing Lender) on such business day. The Request for
Issuance of Letter of Credit shall specify (a) the proposed date of
issuance (which shall be a Business Day), (b) whether the Letter of Credit
is to be a Standby Letter of Credit or a Commercial Letter of Credit, (c)
the face amount of the Letter of Credit, (d) in the case of a Letter of
Credit which Company requests to be denominated in a currency other than
Dollars, the currency in which Company requests such Letter of Credit to
be issued, (e) the expiration date of the Letter of Credit, (f) the name
and address of the beneficiary, (g) the name of the Revolving Lender which
has agreed to be the Issuing Lender and (h) either the verbatim text of
the proposed Letter of Credit or the proposed terms and conditions
thereof, including a precise description of any documents to be presented
by the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing Lender
to make payment under the Letter of Credit; provided that the Issuing
Lender, in its reasonable discretion, may require changes in the text of
the proposed Letter of Credit or any such documents.
69 EXECUTION
Company shall notify the applicable Issuing Lender (and
Administrative Agent, if Administrative Agent is not such Issuing Lender)
prior to the issuance of any Letter of Credit in the event that any of the
matters to which Company is required to certify in the applicable Request
for Issuance of Letter of Credit is no longer true and correct as of the
proposed date of issuance of such Letter of Credit, and upon the issuance
of any Letter of Credit Company shall be deemed to have re-certified, as
of the date of such issuance, as to the matters to which Company is
required to certify in the applicable Request for Issuance of Letter of
Credit.
(ii) Determination of Issuing Lender. Upon receipt by a proposed
Issuing Lender of a Request for Issuance of Letter of Credit pursuant to
subsection 3.1B(i) requesting the issuance of a Letter of Credit, (a) in
the event Administrative Agent is the proposed Issuing Lender,
Administrative Agent shall be the Issuing Lender with respect to such
Letter of Credit, notwithstanding the fact that the Letter of Credit Usage
with respect to such Letter of Credit and with respect to all other
Letters of Credit issued by Administrative Agent, when aggregated with
Administrative Agent's outstanding Revolving Loans and Swing Line Loans,
may exceed Administrative Agent's Revolving Loan Commitment then in
effect; provided that Administrative Agent shall not be obligated to issue
any Letter of Credit denominated in a foreign currency which in the
judgment of Administrative Agent is not readily and freely available; and
(b) in the event any other Revolving Lender is the proposed Issuing
Lender, such Revolving Lender shall promptly notify Company and
Administrative Agent whether or not, in its sole discretion, it has
elected to issue such Letter of Credit, and (1) if such Revolving Lender
so elects to issue such Letter of Credit it shall be the Issuing Lender
with respect thereto and (2) if such Revolving Lender fails to so promptly
notify Company and Administrative Agent or declines to issue such Letter
of Credit, Company may request Administrative Agent or another Revolving
Lender to be the Issuing Lender with respect to such Letter of Credit in
accordance with the provisions of this subsection 3.1B.
(iii) Issuance of Letter of Credit. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
(iv) Notification to Revolving Lenders. Upon the issuance of or
amendment to any Letter of Credit the applicable Issuing Lender shall
promptly notify Administrative Agent and each other Revolving Lender of
such issuance or amendment. The notice to Administrative Agent shall be
accompanied by a copy of such Letter of Credit or amendment and in the
event a Revolving Lender requests a copy of such issuance or amendment,
such copies will be provided by Administrative Agent. Promptly after
receipt of such notice (or, if Administrative Agent is the Issuing Lender,
together with such notice), Administrative Agent shall notify each
Revolving Lender of the amount of such Lender's respective participation
in such Letter of Credit, determined in accordance with subsection 3.1C.
(v) Reports to Revolving Lenders. In the event that the Issuing
Lender is other than Administrative Agent, such Issuing Lender will send
by facsimile transmission to
70 EXECUTION
Administrative Agent, promptly on the first Business Day of each month,
the daily maximum amount available to be drawn for the Letters of Credit
for the previous month. Administrative Agent shall deliver to each
Revolving Lender, upon each Letter of Credit fee payment, a report setting
forth for such period the daily maximum amount available to be drawn under
the Letters of Credit issued by all Issuing Lenders during such period.
(vi) Collateralization of Letters of Credit Due to Currency
Fluctuation. If on any Computation Date Administrative Agent shall have
determined that the Letter of Credit Usage exceeds the amount permitted
under subsection 3.1A(ii) by an amount greater than $50,000 because of a
change in applicable rates of exchange between Dollars and any foreign
currency, then Administrative Agent shall give notice to the Company that
cash collateralization of the Letter of Credit Usage exceeding the amount
permitted under subsection 3.1A(ii) is required and Company shall cash
collateralize its outstanding Letters of Credit by depositing Dollars into
the Collateral Account established under the Security Agreement in an
amount equal to the extent that the Letter of Credit Usage exceeds the
amount permitted under subsection 3.1A(ii).
C. Revolving Lenders' Purchase of Participations in Letters of Credit.
Immediately upon the issuance of each Letter of Credit, each Revolving Lender
shall be deemed to, and hereby agrees to, have irrevocably purchased from the
Issuing Lender a participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro Rata Share of the
maximum amount which is or at any time may become available to be drawn
thereunder.
.2 Letter of Credit Fees.
Company agrees to pay the following amounts with respect to Letters
of Credit issued hereunder:
(i) with respect to each Letter of Credit, (a) a fronting fee,
payable directly to the applicable Issuing Lender for its own account,
equal to the greater of (x) $500 and (y) 0.25% per annum the Dollar
Equivalent of the daily amount available to be drawn under such Letter of
Credit and (b) a letter of credit fee, payable to Administrative Agent for
the account of Revolving Lenders (based upon their respective Pro Rata
Shares), equal to (x) the Applicable LIBO Rate Margin multiplied by (y)
the Dollar Equivalent of the daily maximum amount available from time to
time to be drawn under such Letter of Credit, each such fronting fee or
letter of credit fee to be payable in arrears on and to (but excluding)
the last Business Day of each March, June, September and December of each
year and computed on the basis of a 360-day year for the actual number of
days elapsed; and
(ii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder (without
duplication of the fees payable under clause (i) above), documentary and
processing charges payable directly to the applicable Issuing Lender for
its own account in accordance with such Issuing Lender's standard schedule
for such charges in effect at the time of such issuance, amendment,
transfer or payment, as the case may be.
71 EXECUTION
For purposes of calculating any fees payable under clause (i) of this subsection
3.2, (1) the Dollar Equivalent of the daily amount available to be drawn under
any Letter of Credit shall be determined as of the close of business on any date
of determination and (2) the Dollar Equivalent of any amount described in such
clause which is denominated in a currency other than Dollars shall be determined
by the applicable Exchange Rate for such currency as of the immediately
preceding monthly anniversary of the date of issuance of such Letter of Credit.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) of this subsection 3.2, Administrative Agent shall distribute to each
Revolving Lender its Pro Rata Share of such amount.
.3 Drawings and Reimbursement of Amounts Paid Under Letters of Credit.
A. Responsibility of Issuing Lender With Respect to Drawings. In
determining whether to honor any drawing under any Letter of Credit by the
beneficiary thereof, the Issuing Lender shall be responsible only to examine the
documents delivered under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in substantial accordance with
the terms and conditions of such Letter of Credit.
B. Reimbursement by Company of Amounts Paid Under Letters of Credit. In
the event an Issuing Lender has determined to honor a drawing under a Letter of
Credit issued by it, such Issuing Lender shall immediately notify Company and
Administrative Agent, and Company shall reimburse such Issuing Lender on or
before the Business Day immediately following the date on which such drawing is
honored (the "Reimbursement Date") in an amount in Dollars (which amount, in the
case of a drawing under a Letter of Credit which is denominated in a currency
other than Dollars, shall be calculated by reference to the applicable Exchange
Rate) and in same day funds equal to the amount of such drawing; provided that,
anything contained in this Agreement to the contrary notwithstanding, (i) unless
Company shall have notified Administrative Agent and such Issuing Lender prior
to 10:00 A.M. (New York City time) on the date such drawing is honored that
Company intends to reimburse such Issuing Lender for the amount of such drawing
with funds other than the proceeds of Revolving Loans, Company shall be deemed
to have given a timely Notice of Borrowing to Administrative Agent requesting
Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement
Date in an amount in Dollars (which amount, in the case of a drawing under a
Letter of Credit which is denominated in a currency other than Dollars, shall be
calculated by reference to the applicable Exchange Rate) equal to the amount of
such drawing and (ii) subject to satisfaction or waiver of the conditions
specified in subsection 4.3B, Revolving Lenders shall, on the Reimbursement
Date, make Revolving Loans that are Base Rate Loans in the amount of such
drawing, the proceeds of which shall be applied directly by Administrative Agent
to reimburse such Issuing Lender for the amount of such drawing; and provided
further that if for any reason proceeds of Revolving Loans are not received by
such Issuing Lender on the Reimbursement Date in an amount equal to the amount
of such drawing, Company shall reimburse such Issuing Lender, on demand, in an
amount in same day funds equal to the excess of the amount of such drawing over
the aggregate amount of such Revolving Loans, if any, which are so received.
Nothing in this subsection 3.3B shall be deemed to relieve any Revolving Lender
from its obligation to make Revolving Loans on the terms and conditions set
forth in this Agreement, and Company shall retain any and all rights it may have
against any Revolving Lender resulting from the failure of such Lender to make
such Revolving Loans under this subsection 3.3B.
72 EXECUTION
C. Payment by Revolving Lenders of Unreimbursed Amounts Paid Under Letters
of Credit.
(i) Payment by Revolving Lenders. In the event that Company shall
fail for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount (calculated, in the case of a drawing under a
Letter of Credit denominated in a currency other than Dollars, by
reference to the applicable Exchange Rate) equal to the amount of any
drawing honored by such Issuing Lender under a Letter of Credit issued by
it, such Issuing Lender shall promptly notify each other Revolving Lender
of the unreimbursed amount of such drawing and of such other Revolving
Lender's respective participation therein based on such Revolving Lender's
Pro Rata Share. Each Revolving Lender shall make available to such Issuing
Lender an amount equal to its respective participation, in Dollars and in
same day funds, at the office of such Issuing Lender specified in such
notice, not later than 12:00 Noon (New York City time) on the first
business day (under the laws of the jurisdiction in which such office of
such Issuing Lender is located) after the date notified by such Issuing
Lender. In the event that any Revolving Lender fails to make available to
such Issuing Lender on such business day the amount of such Revolving
Lender's participation in such Letter of Credit as provided in this
subsection 3.3C, such Issuing Lender shall be entitled to recover such
amount on demand from such Revolving Lender together with interest thereon
at the Federal Funds Effective Rate for three Business Days and thereafter
at the Base Rate. Nothing in this subsection 3.3C shall be deemed to
prejudice the right of any Revolving Lender to recover from any Issuing
Lender any amounts made available by such Revolving Lender to such Issuing
Lender pursuant to this subsection 3.3C in the event that it is determined
by the final judgment of a court of competent jurisdiction that the
payment with respect to a Letter of Credit by such Issuing Lender in
respect of which payment was made by such Revolving Lender constituted
gross negligence or willful misconduct on the part of such Issuing Lender.
(ii) Distribution to Revolving Lenders of Reimbursements Received
From Company. In the event any Issuing Lender shall have been reimbursed
by other Revolving Lenders pursuant to subsection 3.3C(i) for all or any
portion of any drawing honored by such Issuing Lender under a Letter of
Credit issued by it, such Issuing Lender shall distribute to each other
Revolving Lender which has paid all amounts payable by it under subsection
3.3C(i) with respect to such honored drawing such other Revolving Lender's
Pro Rata Share of all payments subsequently received by such Issuing
Lender from Company in reimbursement of such honored drawing when such
payments are received. Any such distribution shall be made to a Revolving
Lender at its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Revolving Lender
may request.
D. Interest on Amounts Paid Under Letters of Credit.
(i) Payment of Interest by Company. Company agrees to pay to each
Issuing Lender, with respect to drawings honored under any Letters of
Credit issued by it, interest on the amount paid by such Issuing Lender in
respect of each such drawing from the date such drawing is honored to but
excluding the date such amount is reimbursed by Company (including any
such reimbursement out of the proceeds of Revolving Loans pursuant to
73 EXECUTION
subsection 3.3B) at a rate equal to (a) for the period from the date of
such drawing to but excluding the Reimbursement Date, the rate then in
effect under this Agreement with respect to Revolving Loans that are Base
Rate Loans and (b) thereafter, a rate which is 2.00% per annum in excess
of the rate of interest otherwise payable under this Agreement with
respect to Revolving Loans that are Base Rate Loans. Interest payable
pursuant to this subsection 3.3D(i) shall be computed on the basis of a
360-day year for the actual number of days elapsed in the period during
which it accrues and shall be payable on demand or, if no demand is made,
on the date on which the related drawing under a Letter of Credit is
reimbursed in full.
(ii) Distribution of Interest Payments by Issuing Lender. Promptly
upon receipt by any Issuing Lender of any payment of interest pursuant to
subsection 3.3D(i) with respect to a drawing under a Letter of Credit
issued by it, (a) such Issuing Lender shall distribute to each other
Revolving Lender, out of the interest received by such Issuing Lender in
respect of the period from the date of such drawing to but excluding the
date on which such Issuing Lender is reimbursed for the amount of such
drawing (including any such reimbursement out of the proceeds of Revolving
Loans pursuant to subsection 3.3B), the amount that such other Revolving
Lender would have been entitled to receive in respect of the letter of
credit fee that would have been payable in respect of such Letter of
Credit for such period pursuant to subsection 3.2 if no drawing had been
honored under such Letter of Credit, and (b) in the event such Issuing
Lender shall have been reimbursed by other Revolving Lenders pursuant to
subsection 3.3C(i) for all or any portion of such drawing, such Issuing
Lender shall distribute to each other Revolving Lender which has paid all
amounts payable by it under subsection 3.3C(i) with respect to such
drawing such other Revolving Lender's Pro Rata Share of any interest
received by such Issuing Lender in respect of that portion of such drawing
so reimbursed by other Revolving Lenders for the period from the date on
which such Issuing Lender was so reimbursed by other Revolving Lenders to
but excluding the date on which such portion of such drawing is reimbursed
by Company. Any such distribution shall be made to a Revolving Lender at
its primary address set forth below its name on the appropriate signature
page hereof or at such other address as such Revolving Lender may request.
.4 Obligations Absolute.
The obligation of Company to reimburse each Issuing Lender for
drawings made under the Letters of Credit issued by it and to repay any
Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and the
obligations of Revolving Lenders under subsection 3.3C(i) shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit;
(ii) the existence of any claim, set-off, defense or other
right which Company or any Revolving Lender may have at any time
against a beneficiary or any transferee of any Letter of Credit (or
any Persons for whom any such transferee may be acting), any Issuing
Lender or other Lender or any other Person or, in the case of a
Lender, against Company,
74 EXECUTION
whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between Company or one of its Subsidiaries and the beneficiary for which
any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
.5 Indemnification; Nature of Issuing Lenders' Duties.
A. Indemnification. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which such Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by such Issuing
Lender, other than as a result of (a) the gross negligence or willful misconduct
of such Issuing Lender as determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the wrongful dishonor
by such Issuing Lender of a proper demand for payment made under any Letter of
Credit issued by it or (ii) the failure of such Issuing Lender to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein called
"Governmental Acts").
B. Nature of Issuing Lenders' Duties. As between Company and any Issuing
Lender, Company assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by such Issuing Lender by, the respective beneficiaries
of such Letters of Credit. In furtherance
75 EXECUTION
and not in limitation of the foregoing, such Issuing Lender shall not be
responsible (absent a determination of a court of competent jurisdiction of
gross negligence or willful misconduct by such Issuing Lender) for: (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in order
to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any such
Letter of Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from causes beyond the
control of such Issuing Lender, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
.6 Increased Costs and Taxes Relating to Letters of Credit.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Revolving Lender shall determine (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Revolving Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Issuing Lender or Revolving Lender (or its
applicable lending or letter of credit office) to any additional Tax
(other than any Tax on the overall net income of such Issuing Lender or
Revolving Lender) with respect to the issuing or maintaining of any
Letters of Credit or the purchasing or maintaining of any participations
therein or any
76 EXECUTION
other obligations under this Section 3, whether directly or by such being
imposed on or suffered by any particular Issuing Lender;
(ii) imposes, modifies or holds applicable any reserve (including
any marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement in respect
of any Letters of Credit issued by any Issuing Lender or participations
therein purchased by any Revolving Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Revolving Lender (or its
applicable lending or letter of credit office) regarding this Section 3 or
any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Revolving Lender of agreeing to issue, issuing or maintaining any
Letter of Credit or agreeing to purchase, purchasing or maintaining any
participation therein or to reduce any amount received or receivable by such
Issuing Lender or Revolving Lender (or its applicable lending or letter of
credit office) with respect thereto (in any amount deemed by such Issuing Lender
(in its sole discretion) to be material); then, in any case, Company shall
promptly pay to such Issuing Lender or Revolving Lender, upon receipt of the
statement referred to in the next sentence, such additional amount or amounts as
may be necessary to compensate such Issuing Lender or Revolving Lender for any
such increased cost or reduction in amounts received or receivable hereunder.
Such Issuing Lender or Revolving Lender shall deliver to Company a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Issuing Lender or Revolving Lender under this
subsection 3.6, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
Section 3. CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans and the issuance of Letters
of Credit hereunder are subject to the satisfaction of the following conditions:
.1 Conditions to Initial Loans.
The obligations of Lenders to make the initial Loans to be made on
the Closing Date are, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
A. Loan Party Documents. On or before the Closing Date, Company shall, and
shall cause each other Loan Party to, deliver to Administrative Agent for
Lenders (with sufficient originally executed copies, where appropriate, for each
Lender and its counsel) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of Incorporation
of such Person, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation and each other
state in which such Person is qualified as a foreign corporation to do
business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or
similar taxes from
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the appropriate taxing authority of each of such jurisdictions, each dated
a recent date prior to the Closing Date;
(ii) Copies of the Bylaws of such Person, certified as of the
Closing Date by such Person's corporate secretary or an assistant
secretary;
(iii) Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the Loan
Documents and the Related Agreements to which it is a party, and the
consummation of the transactions contemplated by the foregoing, certified
as of the Closing Date by the corporate secretary or an assistant
secretary of such Person as being in full force and effect without
modification or amendment;
(iv) Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
(v) Executed originals of the Loan Documents, in each case to which
such Person is a party; and
(vi) Such other documents as Administrative Agent may reasonably
request in writing.
B. Scientific Games Documents. On or before the Closing Date, Company
shall, or shall cause Scientific Games and its Domestic Subsidiaries to, as the
case may be, deliver to Administrative Agent for Lenders (with sufficient
originally executed copies, where appropriate, for each Lender and its counsel)
the following, each, unless otherwise noted, dated the Closing Date:
(i) Certified copies of the Certificate or Articles of Incorporation
of each of Scientific Games and its Domestic Subsidiaries, together with,
where applicable, a good standing certificate from the Secretary of State
of its jurisdiction of incorporation and each other state in which
Scientific Games or any of its Domestic Subsidiaries is qualified as a
foreign corporation to do business and, to the extent generally available,
a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent date prior to
the Closing Date;
(ii) Copies of the Bylaws of each of Scientific Games and its
Domestic Subsidiaries, certified as of the Closing Date by such Person's
corporate secretary or an assistant secretary;
(iii) Resolutions of the Board of Directors of Scientific Games and
its Domestic Subsidiaries approving and authorizing the execution,
delivery and performance of the Loan Documents and the Related Agreements
to which it is a party and the consummation of the transactions
contemplated by the foregoing, each certified as of the Closing Date by
the corporate secretary or an assistant secretary of such Person as being
in full force and effect without modification or amendment;
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(iv) Signature and incumbency certificates of the officers of
Scientific Games and its Subsidiaries executing the Loan Documents to
which it is a party;
(v) Originals of the Loan Documents, in each case executed by
Scientific Games and each of its Domestic Subsidiaries that is a party
thereto, as the case may be; and
(vi) Such other documents as Administrative Agent may reasonably
request in writing;
C. No Material Adverse Change. Since October 31, 1999, Company and each of
its Subsidiaries and, since December 31, 1999, Scientific Games and each of its
Subsidiaries, shall have conducted its business in the ordinary course of
business and consistent with past practice and there shall not have been any
Material Adverse Effect.
D. Senior Subordinated Notes and Convertible Preferred Stock; Use of
Proceeds.
(i) Senior Subordinated Notes. On or before the Closing Date the
Senior Subordinated Notes shall have been sold for gross proceeds of not
less than $150 million and the Senior Subordinated Note Indenture as
amended by the First Supplemental Indenture dated as of September 6, 2000
(the "First Supplemental") shall be in full force and effect and shall not
have been amended, supplemented, waived or otherwise modified without the
consent of Administrative Agent, and executed or conformed copies thereof
(including all exhibits and schedules thereto) and any amendments thereto
and all material documents executed in connection therewith shall have
been delivered to Administrative Agent.
(ii) Convertible Preferred Stock. On or before the Closing Date, (1)
Company shall have executed and delivered the Convertible Preferred Stock
Purchase Agreement and such agreement shall be in full force and effect
and shall not have been amended, supplemented, waived or otherwise
modified without the consent of Administrative Agent, and executed or
conformed copies thereof (including all exhibits and schedules thereto)
and any amendment thereto and all documents executed in connection
therewith shall have been delivered to Administrative Agent and (2)
Company shall have received the net cash proceeds from the issuance of
$110 million of Convertible Preferred Stock.
(iii) Use of Proceeds. On or before the Closing Date, (1) Company
shall have contributed the net cash proceeds from the Senior Subordinated
Notes issuance to Acquisition Co., and Company and Acquisition Co. shall
have applied such proceeds to the Acquisition Financing Requirements; (2)
Company shall have applied the net cash proceeds from the Convertible
Preferred Stock issuance to the Acquisition Financing Requirements; and
(3) Company shall have applied approximately $3.9 million in cash on hand
to the Acquisition Financing Requirements.
E. Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. Company, Acquisition Co. and Scientific Games shall have
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the Merger, the
related financings and the other transactions contemplated by the Loan Documents
and the Related Agreements and the continued operation of the business
79 EXECUTION
conducted by Company and its Subsidiaries and Scientific Games and its
Subsidiaries in substantially the same manner as conducted prior to the
consummation of the Merger, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements, and each of the
foregoing shall be in full force and effect, in each case other than those the
failure to obtain or maintain which, either individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. All
applicable waiting periods relating to competition or antitrust laws and
regulations shall have expired without any action being taken or threatened by
any competent authority which would restrain, prevent or otherwise impose
adverse conditions on the Merger, the related financings and the transactions
contemplated by the Loan Documents and the Related Agreements. No action,
request for stay, petition for review or rehearing, reconsideration, or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired.
F. Merger Matters.
(i) Merger Agreement and certain other Related Agreements.
Administrative Agent shall have received fully executed or conformed
copies of the Merger Agreement and any documents executed in connection
therewith, and the Merger Agreement shall be in full force and effect and
no provision thereof shall have been amended, supplemented, waived or
otherwise modified in any respect determined by Administrative Agent to be
material (including, without limitation, any increase in the price to be
paid for the Scientific Games Common Stock to an amount in excess of
$26.00 per share), in each case without the consent of Administrative
Agent;
(ii) Merger Conditions. All conditions to the Merger set forth in
the Merger Agreement shall have been satisfied or the fulfillment of any
such conditions shall have been waived with the consent of Administrative
Agent and Requisite Lenders;
(iii) Merger Effective. The Merger shall have become effective in
accordance with the terms of the Merger Agreement and the Delaware General
Corporation Law;
(iv) Merger Documents. Administrative Agent shall have received
satisfactory evidence of the filing of the documents with the Secretary of
State of the State of Delaware effecting the Merger on the Merger Date;
(v) Aggregate Cash Consideration. The aggregate cash consideration
for the shares of Scientific Games Common Stock to be acquired in any
manner whatsoever in connection with the Merger shall not exceed
approximately $307.7 million in the aggregate;
(vi) Transaction Costs. Transaction Costs incurred as of the Closing
Date shall not exceed $30.1 million and Administrative Agent shall have
received evidence to its satisfaction to such effect;
(vii) Use of Proceeds. Company shall have provided evidence
satisfactory to Administrative Agent that the proceeds of the Senior
Subordinated Notes, Convertible Preferred Stock and the Company's cash on
hand described in subsection 4.1D have been
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irrevocably committed, prior to the application of the proceeds of the
Term Loans and the Revolving Loans made on the Closing Date, to the
payment of a portion of the Acquisition Financing Requirements;
(viii) Merger Officer's Certificate. Administrative Agent shall have
received an Officer's Certificate of Company to the effect set forth in
clauses (i)-(vii) above;
(ix) Officer's Certificates. Administrative Agent shall have an
Officer's Certificate from Company to the effect that the representations
and warranties of each of Acquisition Co. and Scientific Games in the
Merger Agreement are true, correct and complete in all material respects
on and as of the Closing Date to the same extent as though made on and as
of that date. Administrative Agent shall have received Officer's
Certificates from Company to the effect that (a) the Merger Agreement is
in full force and effect and no provision thereof has been amended,
supplemented, waived or otherwise modified in any material respect without
the consent of Administrative Agent and (b) each of the parties to the
Merger Agreement has complied with all agreements, terms and conditions
contained in the Merger Agreement and any agreements or documents referred
to therein required to be performed or complied with by each of them on or
before the Closing Date, except where such failure to comply or perform
could not reasonably be expected to have a Material Adverse Effect, and
none of such Persons is in default in their performance or compliance with
any of the terms or provisions thereof, except where such default could
not reasonably be expected to have a Material Adverse Effect;
(x) Existing Company Indebtedness; Release of Liens.
Contemporaneously with the application of the proceeds of the initial
Loans to be made on the Closing Date:
(a) Company shall have paid the Prepayment Premiums and shall
have repaid in full the Existing Company Bank Debt, the Existing
Company Senior Notes and the Existing Company Convertible Debt, and
shall have terminated any commitments to lend or make other
extensions of credit under the agreements relating to the Existing
Company Bank Debt and no other Indebtedness of Company and its
Subsidiaries shall remain outstanding other than the Indebtedness
permitted under subsection 7.1;
(b) Company shall have delivered to Administrative Agent all
documents and instruments and taken all other actions, in each case
necessary to release all Liens securing the Existing Company Bank
Debt in connection therewith;
(c) Company shall have made arrangements satisfactory to
Administrative Agent with respect to the cancellation of any letters
of credit outstanding under the agreements relating to the Existing
Company Bank Debt or the issuance of Letters of Credit to support
the obligations of Company and its Subsidiaries with respect
thereto;
(d) Administrative Agent shall have received an Officer's
Certificate of Company stating that, after giving effect to the
transactions described in this subsection 4.1F, there shall be no
existing Indebtedness of Company or its
81 EXECUTION
Subsidiaries outstanding after consummation of the Closing Date
transactions other than the Indebtedness permitted under subsection
7.1, such Indebtedness to be in form and substance satisfactory to
Administrative Agent;
(xi) Existing Scientific Games Indebtedness. Contemporaneously with
the application of the proceeds of the initial Loans to be made on the
Closing Date:
(a) Scientific Games and its Subsidiaries shall have repaid in
full the Existing Scientific Games Bank Debt and shall have
terminated any commitments to lend or make other extensions of
credit thereunder;
(b) Scientific Games shall have delivered to Administrative
Agent all documents and instruments and taken all other actions, in
each case necessary to release all Liens securing the Existing
Scientific Games Bank Debt in connection therewith; and
(c) Scientific Games shall have made arrangements satisfactory
to Administrative Agent with respect to the cancellation of any
letters of credit (other than the Existing Letters of Credit)
outstanding under the agreements relating to the Existing Scientific
Games Bank Debt or the issuance of Letters of Credit to support the
obligations of Scientific Games and its Subsidiaries with respect
thereto; and
(xii) Existing Letters of Credit. Company shall have furnished to
Administrative Agent copies of all Existing Letters of Credit and all
amendments thereto. Company shall have (x) cash collateralized the
Existing Letters of Credit on or before the Closing Date and (y) paid to
the issuing lenders with respect to such Existing Letters of Credit all
fees and other amounts owing with respect thereto through and including
the Closing Date.
G. Mortgages; Mortgage Policies; Etc. Administrative Agent shall have
received from Company and each applicable Subsidiary of Company:
(i) Mortgages. Fully executed and notarized Mortgages and any
assignments thereof in favor of Administrative Agent, on behalf of Lenders
(each a "Closing Date Mortgage" and, collectively, the "Closing Date
Mortgages"), in proper form for recording in all appropriate places in all
applicable jurisdictions, encumbering each Real Property Asset listed in
Schedule 5.5 annexed hereto and identified as a Closing Date mortgaged
property (each a "Closing Date Mortgaged Property" and, collectively, the
"Closing Date Mortgaged Properties");
(ii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged Property
is a Flood Hazard Property and (2) the community in which any such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, (b) if there are any such Flood Hazard Properties, such
Person's written acknowledgement of receipt of written notification from
82 EXECUTION
Administrative Agent (1) as to the existence of each such Flood Hazard
Property and (2) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood
Insurance Program, and (c) in the event any such Flood Hazard Property is
located in a community that participates in the National Flood Insurance
Program, evidence that Company or the applicable Subsidiary of Company has
obtained flood insurance in respect of such Flood Hazard Property to the
extent required under the applicable regulations of the Board of Governors
of the Federal Reserve System;
(iii) Opinions of Local Counsel. If reasonably required by
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in each state in which a
Closing Date Mortgaged Property is located with respect to the
enforceability of the form(s) of Closing Date Mortgages to be recorded in
such state and such other matters as Administrative Agent may reasonably
request, in each case in form and substance reasonably satisfactory to
Administrative Agent;
(iv) Landlord Consents and Estoppels; Recorded Leasehold Interests.
In the case of each Closing Date Mortgaged Property consisting of a
Leasehold Property, (a) a Landlord Consent and Estoppel with respect
thereto and (b) evidence that such Leasehold Property is a Recorded
Leasehold Interest;
(v) Title Insurance. (a) ALTA mortgagee title insurance policies or
unconditional commitments therefor (the "Closing Date Mortgage Policies")
issued by the Title Company with respect to the Closing Date Mortgaged
Properties listed on Schedule 5.5 annexed hereto, in amounts not less than
the respective amounts designated therein with respect to any particular
Closing Date Mortgaged Properties, insuring fee simple title to, or a
valid leasehold interest in, each such Closing Date Mortgaged Property
vested in such Loan Party and assuring Administrative Agent that the
applicable Closing Date Mortgages create valid and enforceable First
Priority mortgage Liens on the respective Closing Date Mortgaged
Properties encumbered thereby (provided that Company may cause to be
delivered to Administrative Agent on the Closing Date a Closing Date
Mortgage Policy listing as an exception any of the items set forth on
Schedule 5.5 annexed hereto so long as such exception is removed by
endorsement within 15 days of the Closing Date), which Closing Date
Mortgage Policies (1) shall include an endorsement for mechanics' liens,
for future advances under this Agreement and for any other matters
reasonably requested by Administrative Agent and (2) shall provide for
affirmative insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to Administrative Agent; and (b) evidence satisfactory to
Administrative Agent that such Loan Party has (i) delivered to the Title
Company all certificates and affidavits required by the Title Company in
connection with the issuance of the Closing Date Mortgage Policies and
(ii) paid to the Title Company or to the appropriate governmental
authorities all expenses and premiums of the Title Company in connection
with the issuance of the Closing Date Mortgage Policies and all recording
and stamp taxes (including mortgage recording and intangible taxes)
payable in connection with recording the Closing Date Mortgages in the
appropriate real estate records;
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(vi) Surveys. Unless otherwise approved by Administrative Agent for
delivery pursuant to subsection 6.9D, ALTA Surveys of each Closing Date
Mortgaged Property satisfactory in form and substance to the
Administrative Agent and the Title Company reasonably current and
certified to Administrative Agent and Title Company by a licensed
surveyor. Notwithstanding anything to the contrary herein, if
Administrative Agent, in its sole discretion, determines not to record a
Mortgage against one or more Mortgaged Properties on the Closing Date,
because the survey for such Mortgaged Property has not been delivered to
Administrative Agent, Company shall not be in default hereunder for
failure to satisfy the requirements of this subsection with respect to
such Mortgaged Property; provided, however, that Company or the applicable
Subsidiary Guarantor shall satisfy such requirements no later than
forty-five (45) days after the Closing Date;
(vii) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise referred
to in the Closing Date Mortgage Policies; and
(viii) Environmental Indemnity. If requested by Administrative
Agent, or if required by any Supplemental Collateral Agent, an
environmental indemnity agreement, reasonably satisfactory in form and
substance to Administrative Agent and its counsel, to such Supplemental
Collateral Agent and its counsel and to Company and its counsel and
Borrower and its counsel, with respect to the indemnification of Agents
and Lenders for any liabilities that may be imposed on or incurred by any
of them as a result of any Hazardous Materials Activity.
H. Security Interests in Personal and Mixed Property. To the extent not
otherwise satisfied pursuant to subsection 4.1G, Administrative Agent shall have
received evidence satisfactory to it that Company and Subsidiary Guarantors
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii) and (iv)
below) that may be necessary or, in the reasonable opinion of Administrative
Agent, desirable in order to create in favor of Administrative Agent, for the
benefit of Lenders, a valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed property Collateral
(including Collateral property fixtures). Such actions shall include the
following:
(i) Schedules to Collateral Documents. Delivery to Administrative
Agent of accurate and complete schedules to all of the applicable
Collateral Documents;
(ii) Stock Certificates and Instruments. Delivery to Administrative
Agent of (a) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing
all capital stock pledged pursuant to the Security Agreement executed by
Company and the Subsidiary Guarantors and (b) all promissory notes or
other instruments (duly endorsed, where appropriate, in a manner
satisfactory to Administrative Agent) evidencing any Collateral;
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(iii) Lien Searches and UCC Termination Statements. Delivery to
Administrative Agent of (a) the results of a recent search, by a Person
satisfactory to Administrative Agent, of all effective UCC financing
statements and fixture filings which may have been made with respect to
any personal or mixed property of any Loan Party, together with copies of
all such filings disclosed by such search, and (b) UCC termination
statements duly executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in respect of
Liens permitted to remain outstanding pursuant to the terms of this
Agreement);
(iv) UCC Financing Statements and Fixture Filings. Delivery to
Administrative Agent of UCC financing statements and, where appropriate,
fixture filings, duly executed by each applicable Loan Party with respect
to all personal and mixed property Collateral of such Loan Party, for
filing in all jurisdictions as may be necessary or, in the reasonable
opinion of Administrative Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Collateral Documents;
(v) PTO Cover Sheets, Etc. Delivery to Administrative Agent of all
cover sheets or other documents or instruments required to be filed with
the PTO in order to create or perfect Liens in respect of any IP
Collateral; and
(vi) Opinions of Local Counsel. To the extent reasonably required by
Administrative Agent, delivery to Administrative Agent of an opinion of
counsel (which counsel shall be reasonably satisfactory to Administrative
Agent) under the laws of each jurisdiction in which any Loan Party or any
personal or mixed property Collateral is located with respect to the
creation and perfection of the security interests in favor of
Administrative Agent in such Collateral and such other matters governed by
the laws of such jurisdiction regarding such security interests as
Administrative Agent may reasonably request, in each case in form and
substance reasonably satisfactory to Administrative Agent.
I. Environmental Reports. Administrative Agent shall have received all
reports in possession or control of Company and related letters from the
respective authors of such reports authorizing Lenders to rely on such to the
same extent as though they were addressed to Lenders and other information in
possession or control of Company, in form, scope and substance satisfactory to
Administrative Agent, regarding environmental matters relating to Company, its
Subsidiaries, Scientific Games and its Subsidiaries and the Facilities, which
reports shall include a Phase I environmental site assessment of the Facility
owned by Scientific Games, Inc. and located in Alpharetta, Georgia, and updates
of the existing Phase I environmental site assessments of the Facilities owned
by Autotote Enterprises, Inc. and located in New Haven, Connecticut and in
Windsor Locks, Connecticut, and, as to the Facility located in New Haven,
Connecticut, an estimate of the reasonable cost of investigating and remediating
any Hazardous Materials Activity thereon (to the extent any such reliance
letter, Phase I, update or estimate has not been received by Administrative
Agent on the Closing Date, Company shall provide oral reports of the
environmental consultants' findings and conclusions as work on such reports
proceeds, and Company shall deliver to Administrative Agent no later than 30
days after the Closing Date such completed reliance letter, Phase I, updates and
estimate) (collectively, the "Phase I and II
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Reports"). Such Phase I environmental site assessments and updates shall conform
to the ASTM Standard Practice for Environmental Site Assessments: Phase I
Environmental Site Assessment Process, E 1527.
J. Financial Statements; Pro Forma Balance Sheet. Lenders shall have
received (i) audited financial statements of Company and its Subsidiaries for
the Fiscal Years ended October 31, 1999, 1998 and 1997, and of Scientific Games
and its Subsidiaries for the Fiscal Years ended December 31, 1999, 1998 and
1997, consisting of balance sheets and the related consolidated statements of
income, stockholders' equity and cash flows for such Fiscal Years, (ii)
unaudited financial statements of Company and its Subsidiaries, for the Fiscal
Quarters ended January 31, 2000 and April 30, 2000, and unaudited financial
statements of Scientific Games and its Subsidiaries as of March 31, 2000 and
June 30, 2000, consisting of a balance sheet and the related consolidated
statements of income and cash flows for the three- and six-month periods ending
on such dates, all in reasonable detail and certified by the chief financial
officer of Company and Scientific Games, as the case may be, that they fairly
present the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes from audit and normal year-end
adjustments, (iii) unaudited pro forma consolidated balance sheets of Company
and its Subsidiaries and of Scientific Games and its Subsidiaries as at July 31,
2000, prepared in accordance with GAAP and reflecting the estimated effects of
the consummation of the Merger, the related financings and the other
transactions contemplated by the Loan Documents and the Related Agreements,
which pro forma financial statements shall be in form and substance satisfactory
to Agents and Lenders, and (iv) projected financial statements (including
balance sheets and related statements of operations and cash flows) of Company
and its Subsidiaries through and including the last day of Company's Fiscal Year
ended on or about December 31, 2008, which projected financial statements shall
be in form and substance satisfactory to Agents and Lenders (the "Financial
Plan").
K. Solvency Assurances. On the Closing Date, Administrative Agent and
Lenders shall have received a Financial Condition Certificate from the chief
financial officer of Company, with appropriate attachments, in each case
demonstrating that, after giving effect to the Merger, the related financings
and the other transactions contemplated by the Loan Documents and the Related
Agreements, Company and its Subsidiaries will be Solvent.
L. Evidence of Insurance. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect and that Administrative Agent on behalf of Lenders has
been named as additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
M. Opinions of Counsel to Loan Parties; Reliance Letters. Lenders and
their respective counsel shall have received originally executed copies of one
or more favorable written opinions of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP,
counsel for Company, dated as of the Closing Date, together with opinions from
each of Xxxxxx X. Xxxxxxx, Esq., General Counsel of Company, C. Xxxx Xxxxxx,
Esq., General Counsel of Scientific Games, Xxxxx, Xxxxxxxx & Xxxxxxx, LLP,
special Georgia counsel for Company, Sills, Cummis, Radin, Tischman, Xxxxxxx &
Gross P.A., special New Jersey counsel for Company, Tobin, Carberry, X'Xxxxxx,
Xxxxx & Xxxxxxxx, P.C., special
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Connecticut counsel for Company, and Xxxxxxx Xxxxxx, special Nevada counsel for
Company, and substantially in the form of Exhibit VII-A, Exhibit VII-B, Exhibit
VII-C, Exhibit VII-D, Exhibit VII-E, Exhibit VII-F and Exhibit VII-G, as the
case may be, annexed hereto and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request. Administrative Agent and its
counsel shall have received copies of each of the opinions of counsel delivered
to the parties under the Related Agreements on or prior to the Closing Date,
together with a letter from each such counsel authorizing Lenders to rely upon
such opinion to the same extent as though it were addressed to Lenders.
N. Opinions of Administrative Agent's Counsel. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Xxxxx LLP, counsel to Administrative Agent, dated as of the Closing
Date, substantially in the form of Exhibit VIII annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders may reasonably
request.
O. Fees. Company shall have paid to Arranger, Agents and Lenders the fees
payable on the Closing Date.
P. Representations and Warranties; Performance of Agreements. Company
shall have delivered to Administrative Agent an Officer's Certificate, in form
and substance satisfactory to Administrative Agent, to the effect that the
representations and warranties in Section 5 hereof are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date (or, to the extent such
representations and warranties specifically relate to an earlier date, that such
representations and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company shall have performed
in all material respects all agreements and satisfied all conditions which this
Agreement provides shall be performed or satisfied by it on or before the
Closing Date except as otherwise disclosed to and agreed to in writing by
Administrative Agent and Requisite Lenders.
Q. Additional Information. There shall have been no information relating
to conditions or events not previously disclosed to Administrative Agent or
relating to new information or additional developments concerning conditions of
events previously disclosed to Administrative Agent which may have a Material
Adverse Effect on the business, operations, properties, assets, liabilities,
condition (financial or otherwise) or prospects of Company, Scientific Games and
their respective Subsidiaries. The results of Administrative Agent's legal, tax,
regulatory and environmental investigations with respect to Scientific Games and
its Subsidiaries, the Merger, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements shall be
reasonably satisfactory in all material respects to Administrative Agent.
R. Completion of Proceedings. All corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by Administrative
Agent, acting on behalf of Lenders, and its counsel shall be satisfactory in
form and substance to Administrative Agent and such counsel, and Administrative
Agent and such counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request in writing.
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Each Lender hereby agrees that by its execution and delivery of its
signature page hereto and by the funding of its Loans to be made on the Closing
Date, such Lender approves of and consents to each of the matters set forth in
this subsection 4.1 which must be approved by, or satisfactory to, Requisite
Lenders; provided that, in the case of any agreement or document which must be
approved by, or which must be satisfactory to, Requisite Lenders, a copy of such
agreement or document shall have been delivered to such Lender on or prior to
the Closing Date by Administrative Agent.
.2 Conditions to All Loans.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed Notice
of Borrowing, in each case signed by an Authorized Representative.
B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event
of Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall not
violate any law including Regulation T, Regulation U or Regulation X of
the Board of Governors of the Federal Reserve System; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that has not been disclosed
by Company in writing pursuant to subsection 5.6 or 6.1(ix) prior to the
making of the last preceding Loans (or, in the case of the initial Loans,
prior to the execution of this Agreement), and there shall have occurred
no development not so
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disclosed in any such action, suit, proceeding, governmental investigation
or arbitration so disclosed, that, in either event, in the opinion of
Administrative Agent or of Requisite Lenders, would be expected to have a
Material Adverse Effect; and no injunction or other restraining order
shall have been issued and no hearing to cause an injunction or other
restraining order to be issued shall be pending or noticed with respect to
any action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result
of, the transactions contemplated by this Agreement or the making of the
Loans hereunder.
.3 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent and Issuing Lender shall have received, in accordance with
the provisions of subsection 3.1B(i), an originally executed Request for
Issuance of Letter of Credit, in each case signed by an Authorized
Representative, together with all other information specified in subsection
3.1B(i) and such other documents or information as the applicable Issuing Lender
may reasonably require in connection with the issuance of such Letter of Credit.
C. On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the same extent as
if the issuance of such Letter of Credit were the making of a Loan and the date
of issuance of such Letter of Credit were a Funding Date.
Section 4. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and the Agents to enter into this
Agreement and to make the Loans, to induce Issuing Lenders to issue Letters of
Credit and to induce other Lenders to purchase participations therein, Company
represents and warrants to each Lender and the Agents, on the date of this
Agreement, on each Funding Date and on the date of issuance of each Letter of
Credit, that the following statements are true, correct and complete:
.1 Organization, Powers, Qualification, Good Standing, Business and
Subsidiaries.
A. Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization as specified in Schedule 5.1
annexed hereto. Each Loan Party has all requisite corporate power and authority
to own and operate its properties, to carry on its business as now conducted and
as proposed to be conducted, to enter into the Loan Documents and the Related
Agreements to which it is a party and to carry out the transactions contemplated
thereby.
B. Qualification and Good Standing. Each Loan Party is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry
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out its business and operations, except in jurisdictions, individually or in the
aggregate for all such jurisdictions, where the failure to be so qualified or in
good standing has not had and will not have a Material Adverse Effect.
C. Conduct of Business. Company and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.13.
D. Subsidiaries. All of the Subsidiaries of Company, including any
Inactive Subsidiaries, are identified in Schedule 5.1 annexed hereto, as said
Schedule 5.1 may be supplemented from time to time pursuant to the provisions of
subsection 6.1(xvi). The capital stock of each of the Subsidiaries of Company
identified in Schedule 5.1 is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock (other than the Scientific Games
Common Stock) constitutes Margin Stock. Each of the Subsidiaries of Company
identified in Schedule 5.1 is a corporation, limited liability company or such
other entity duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation or organization set forth
therein, has all requisite corporation or limited liability company, as the case
may be, power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted, and is qualified
to do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such corporation or limited liability company, as the case may be, power and
authority, individually or in the aggregate, has not had and will not have a
Material Adverse Effect. Schedule 5.1 correctly sets forth the ownership
interest of Company and each of its Subsidiaries in each of the Subsidiaries of
Company identified therein.
.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents and the Related Agreements have been duly authorized by all
necessary actions on the part of each Loan Party that is a party thereto.
B. No Conflict. The execution, delivery and performance by Loan Parties of
the Loan Documents and the Related Agreements and the consummation of the
transactions contemplated by the Loan Documents and the Related Agreements do
not and will not (i) violate any provision of any law or any governmental rule
or regulation applicable to Company or any of its Subsidiaries, the Certificate
or the Articles of Incorporation or Bylaws of Company or any of Company's
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on Company or any of Company's Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of Company or any of its
Subsidiaries, except for such breaches, conflicts and defaults which could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (iii) result in or require the creation or imposition of any
Lien upon any of the properties or assets of Company or any of Company's
Subsidiaries (other than any Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv) require any
approval of or consent of any Person under any Contractual Obligation of Company
or any of Company's Subsidiaries, except for such approvals or consents which
will be obtained on or before the Closing Date and disclosed in writing to
Lenders or which the failure to
90 EXECUTION
obtain could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
C. Governmental Consents. The execution, delivery and performance by Loan
Parties of the Loan Documents and the Related Agreements and the consummation of
the transactions contemplated by the Loan Documents and the Related Agreements
do not and will not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body, except for filings required in
connection with the perfection of security interests granted pursuant to the
Loan Documents, and such other registrations, consents, approvals, notices or
other actions which have been or will be made, obtained, given or taken on or
before the Closing Date or which the failure to obtain or take could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
D. Binding Obligation. Each of the Loan Documents and the Related
Agreements has been duly executed and delivered by each Loan Party that is a
party thereto and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
E. Valid Issuance of Equity Securities. The capital stock of Acquisition
Co. to be sold on or before the Closing Date, when issued and delivered, will be
duly and validly issued, fully paid and nonassessable. No stockholder of
Acquisition Co. has or will have any preemptive rights to subscribe for any
additional equity Securities of Acquisition Co. The issuance of sale of such
common equity Securities of Acquisition Co., upon such issuance and sale, will
either (a) have been registered or qualified under applicable federal and state
securities laws or (b) be exempt therefrom.
F. Senior Subordinated Notes. Company has the corporate power and
authority to issue the Senior Subordinated Notes. The Senior Subordinated Notes
are the legally valid and binding obligations of Company, enforceable against
Company in accordance with their terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability. The subordination provisions of the Senior Subordinated Notes
are enforceable against the holders thereof in accordance with their terms and
the Loans, Letters of Credit and all other monetary Obligations hereunder are
within the definitions of "Senior Indebtedness" and "Designated Senior
Indebtedness" included in such provisions. The issuance and sale by Company of
Senior Subordinated Notes were either (a) registered or qualified under
applicable federal and state securities laws or (b) are exempt therefrom.
G. Valid Issuance of Convertible Preferred Stock. The Convertible
Preferred Stock, when issued and delivered, will be duly and validly issued,
fully paid and nonassessable. The Convertible Preferred Stock is either (a)
registered or qualified under applicable federal and state securities law or (b)
is exempt therefrom.
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.3 Financial Condition.
Company has heretofore delivered to Lenders, at Lenders' request,
the following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries as at October 31, 1999, 1998 and
1997 and the audited consolidated balance sheets of Scientific Games and its
Subsidiaries as at December 31, 1999, 1998 and 1997, and the related
consolidated statements of income, stockholders' equity and cash flows of
Company, Scientific Games and their respective Subsidiaries for the Fiscal Years
then ended and (ii) the unaudited consolidated balance sheet of Company and its
Subsidiaries for the Fiscal Quarters ending on or about January 31, 2000 and
April 30, 2000 and of Scientific Games and its Subsidiaries as of March 31, 2000
and June 30, 2000, and the related unaudited consolidated statements of income
and cash flows of Company, Scientific Games and their respective Subsidiaries
for the three months then ended. All such statements were prepared in conformity
with GAAP and fairly present, in all material respects, the financial position
(on a consolidated basis) of the entities described in such financial statements
as at the respective dates thereof and the results of operations and cash flows
(on a consolidated basis) of the entities described therein for each of the
periods then ended, subject, in the case of any such unaudited financial
statements, to changes resulting from audit and normal year-end adjustments.
Company does not (and will not following the funding of the initial Loans) have
any Contingent Obligation, contingent liability or liability for taxes,
long-term lease or unusual forward or long-term commitment that is not required
to be reflected in the foregoing financial statements or the notes thereto and
which in any such case is material in relation to the business, operations,
properties, assets, condition (financial or otherwise) or prospects of Company
or any of its Subsidiaries, taken as a whole.
.4 No Material Adverse Change; No Restricted Junior Payments.
Since October 31, 1999, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect, and neither Company nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted under
subsection 7.5.
.5 Title to Properties; Liens; Real Property.
A. Title to Properties; Liens. Company and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real property),
(ii) valid leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other personal
property), all of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and assets are free
and clear of Liens. With respect to those Liens set forth on Schedule 5.5
annexed hereto, the debts secured thereby have been paid in full and are no
longer outstanding.
B. Real Property. As of the Closing Date, Schedule 5.5 annexed hereto
contains a true, accurate and complete list of (i) all real property owned by
Company or any Subsidiary and (ii) all
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material leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Property Asset of any Loan Party, regardless of whether such
Loan Party is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Except as
specified in Schedule 5.5 annexed hereto, each agreement listed in clause (ii)
of the immediately preceding sentence is in full force and effect and Company
and each Loan Party do not have knowledge of any default that has occurred and
is continuing thereunder, and each such agreement constitutes the legally valid
and binding obligation of each applicable Loan Party, enforceable against such
Loan Party in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles.
.6 Litigation; Adverse Facts.
A. Except as set forth in Schedule 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign (including any Environmental Claims) that are pending or, to
the knowledge of Company, threatened against or affecting Company or any of its
Subsidiaries or any property of Company or any of its Subsidiaries and that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect or could reasonably be expected to prevent or unduly
delay the Merger. Neither Company nor any of its Subsidiaries (i) is in
violation of any applicable laws (including Environmental Laws) that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect, or (ii) is subject to or in default with respect to any
final judgments, writs, injunctions, decrees, rules or regulations of any court
or any federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.
.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all tax returns
and reports of Company and its Subsidiaries required to be filed by any of them
have been timely filed, and all material taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable other than those being contested in good faith. Company knows of
no proposed tax assessment against Company or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect and which is not
being actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; provided that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
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.8 Performance of Agreements; Materially Adverse Agreements.
A. Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default, except where the consequences, direct or indirect, of
such default or defaults, if any, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
B. Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
.9 Governmental Regulation.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
.10 Securities Activities.
A. Neither Company nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
B. Not more than 25% of the value of the assets (either of Company only or
of Company and its Subsidiaries on a consolidated basis) that are subject to the
restrictions on Liens or dispositions contained in subsection 7.2 or 7.7 or
subject to any restriction contained in any agreement or instrument, between
Company and any Lender or any Affiliate of any Lender, relating to Indebtedness
and within the scope of subsection 8.2, will be Margin Stock.
.11 Employee Benefit Plans.
A. Company and each of its Subsidiaries are in material compliance with
all applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Company Employee
Benefit Plan, and have performed all their obligations under each Company
Employee Benefit Plan, except where a failure to comply or perform could not
reasonably be expected to have a Material Adverse Effect. Each Company Employee
Benefit Plan which is intended to qualify under Section 401(a) of the Internal
Revenue Code is so qualified.
B. No ERISA Event has occurred or is reasonably expected to occur that
could reasonably be expected to have a Material Adverse Effect.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or other applicable law or individual contract, no Company Employee
Benefit Plan provides health
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or welfare benefits (through the purchase of insurance or otherwise) for any
retired or former employee of Company, any of its Subsidiaries or any of their
respective ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, and
excluding for purposes of such computation all Pension Plans with respect to
which assets exceed benefit liabilities (as defined in Section 4001(a)(16) of
ERISA), the sum of:
(i) the unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA) individually or in the aggregate for all Company
Pension Plans; and
(ii) the liability that Company or its Subsidiaries could reasonably
be expected to incur as the result of such unfunded benefit liabilities,
individually or in the aggregate, for all Pension Plans other than Company
Pension Plans (assuming amortization of such unfunded benefit liabilities
over ten years);
does not exceed $5 million.
E. As of the most recent valuation date for which an actuarial report has
been received and based on information available pursuant to Section 4221(e) of
ERISA, the sum of:
(i) the potential liability of Company and its Subsidiaries for a
complete withdrawal from all Multiemployer Plans (within the meaning of
Section 4203 of ERISA) to which Company or any of its Subsidiaries
contribute; and
(ii) the liability of Company or its Subsidiaries could be
reasonably be expected to incur as a result of the complete withdrawal
from all Multiemployer Plans to which neither Company nor any of its
Subsidiaries contribute, after considering the financial condition of all
of the ERISA Affiliates most closely related to the contributing
employer(s);
does not exceed $5 million.
.12 Certain Fees.
Other than as disclosed in the Merger Agreement, no broker's or
finder's fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Company hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
.13 Environmental Protection.
Except as set forth in Schedule 5.13 annexed hereto:
(i) To the knowledge of the Company and its Subsidiaries, neither
Company nor any of its Subsidiaries nor any of their respective Facilities
or operations are subject to any outstanding written order, consent decree
or settlement agreement with any Person
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relating to (a) any Environmental Law, (b) any Environmental Claim, or (c)
any Hazardous Materials Activity, except where such an order, consent,
decree or settlement agreement, individually or in the aggregate, would
not be reasonably expected to have a Material Adverse Effect;
(ii) neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ss.
9604) or any comparable state law, except where such a letter or request,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect;
(iii) To the knowledge of the Company and its Subsidiaries, there
are and have been no conditions, occurrences, or Hazardous Materials
Activities which could reasonably be expected to form the basis of an
Environmental Claim against Company or any of its Subsidiaries, except
where such a condition, occurrence or Hazardous Materials Activity,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect;
(iv) neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries has filed
any notice under any Environmental Law indicating past or present
treatment of Hazardous Materials at any Facility, and none of Company's or
any of its Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous waste, as
defined under 40 C.F.R. Parts 260-270 or any state equivalent, except
where such treatment or generation, transportation, storage or disposal,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect; and
(v) To the knowledge of the Company and its Subsidiaries, compliance
with all current or reasonably foreseeable future requirements pursuant to
or under Environmental Laws will not, individually or in the aggregate,
give rise to a Material Adverse Effect.
To the knowledge of the Company and its Subsidiaries,
notwithstanding anything in this subsection 5.13 to the contrary, no event or
condition has occurred or is occurring with respect to Company or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 5.13 annexed hereto, which individually or in the aggregate, has had
or would reasonably be expected to have a Material Adverse Effect.
.14 Employee Matters.
There is no strike or work stoppage in existence or, to the best
knowledge of the Company, threatened involving Company or any of its
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
.15 Solvency.
Each Loan Party is and, upon the incurrence of any Obligations by
such Loan Party on any date on which this representation is made, will be,
Solvent.
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.16 Matters Relating to Collateral.
A. Creation, Perfection and Priority of Liens. Subject to the filing of
UCC financing statements and the taking of possession by the Administrative
Agent of all stock certificates and instruments, if any, constituting
Collateral, the execution and delivery of the Collateral Documents by Loan
Parties, together with actions taken pursuant to subsections 4.1G, 4.1H, 6.8 and
6.9 are effective, or in the case of subsections 6.8 and 6.9, will be effective
at the time of the acquisition of such Subsidiaries, to create in favor of
Administrative Agent for the benefit of Lenders, as security for the respective
Secured Obligations (as defined in the applicable Collateral Document in respect
of any Collateral), a valid and perfected First Priority Lien on all of the
Collateral.
B. Governmental Authorizations. No authorization, approval or other action
by, and no notice to or filing with, any governmental authority or regulatory
body is required for either (i) the pledge or grant by any Loan Party of the
Liens purported to be created in favor of Administrative Agent pursuant to any
of the Collateral Documents or (ii) the exercise by Administrative Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except for filings or recordings contemplated by subsection
5.16A and except as may be required, in connection with the disposition of any
Pledged Collateral (as defined in the Security Agreement), by laws generally
affecting the offering and sale of securities.
C. Absence of Third-Party Filings. Except such as may have been filed (x)
in favor of Administrative Agent, (y) with respect to Permitted Encumbrances,
and (z) as to which executed UCC termination statements have been delivered to
the Administrative Agent for filing (i) no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all or any part of
the Collateral is on file in any filing or recording office and (ii) no
effective filing covering all or any part of the IP Collateral is on file in the
PTO.
D. Margin Regulations. The pledge of the Pledged Collateral (as defined in
the Security Agreement) pursuant to the Collateral Documents does not violate
Regulation U or X of the Board of Governors of the Federal Reserve System.
E. Information Regarding Collateral. All written information supplied to
Agents by or on behalf of any Loan Party with respect to any of the Collateral
(in each case taken as a whole with respect to any particular Collateral) is
accurate and complete in all material respects.
.17 Related Agreements.
A. Delivery of Related Agreements. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all exhibits and
schedules thereto.
B. Warranties. Subject to the qualifications set forth therein, each of
the representations and warranties given by Company, Acquisition Co. and
Scientific Games in the Merger Agreement is true and correct in all material
respects as of the date hereof (or as of any earlier date to which such
representation and warranty specifically relates) and will be true and correct
in all material respects as of the Closing Date (or such earlier date as the
case may be).
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C. Survival. Notwithstanding anything in the Merger Agreement to the
contrary, the representations and warranties of Company set forth in subsection
5.17B shall, solely for purposes of this Agreement, survive the Closing Date for
the benefit of Lenders.
.18 Disclosure.
No representation or warranty of any Loan Party contained in any
Loan Document or Related Agreement or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by 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 are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
.19 Certain Jurisdictions.
Company and its Subsidiaries do not have any assets located in any
of (i) Trinidad and Tobago, St. Maarten, Barbados, Bermuda, Jamaica, Guyana,
Dutch West Indies, St. Kitts West, Aruba or Virgin Islands and (ii) Panama and
Mexico, except, in respect of each such jurisdiction, assets of Company and its
Subsidiaries located in such jurisdiction with an aggregate market value of not
more than (i) $10,000 and (ii) $300,000, respectively.
Section 5. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
.1 Financial Statements and Other Reports.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Agents and Lenders:
(i) Monthly Financials: as soon as available and in any event within
30 days after the end of each calendar month (or, in the case of the
calendar month of October, 2000,
98 EXECUTION
the last calendar month of each Fiscal Quarter and the last calendar month
of each Fiscal Year, as soon as available and in any event within 45 days
after the end of such calendar month) the consolidated and consolidating
balance sheets of Company and its Subsidiaries as at the end of such
calendar month and the related consolidated and consolidating statements
of income and cash flows of Company and its Subsidiaries for such calendar
month, all in reasonable detail and certified by the chief financial
officer of Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal
year-end adjustments;
(ii) Quarterly Financials: as soon as available and in any event
within 45 days after the end of each of the first three Fiscal Quarters,
(a) the consolidated and consolidating balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Quarter and the related
consolidated and consolidating statements of income and cash flows of
Company and its Subsidiaries for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan or Revised
Financial Plan, as the case may be, for the current Fiscal Year, all in
reasonable detail and certified by the chief financial officer of Company
that they fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates indicated and
the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments; provided that with respect to the Fiscal Quarters ending
September 30, 2000, December 31, 2000, March 31, 2001 and June 30, 2001,
Company shall not be required to set forth in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal
Year; provided further that, with respect to the Fiscal Quarters ending
September 30, 2000, December 31, 2000 and March 31, 2001, Company shall
not be required to deliver the consolidated and consolidating balance
sheets of Company and its Subsidiaries and the related consolidated and
consolidating statements of income and cash flows of Company and its
Subsidiaries for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter; provided still further, that is
hereby acknowledged and agreed that any such financial statements
delivered hereunder for any period that ends prior to the Closing Date or
includes the Closing Date shall be prepared on a Pro Forma Basis as if the
Merger had been consummated on the first day of the Fiscal Quarter ending
on September 30, 2000 and the Merger was a Permitted Acquisition of
Company and its Subsidiaries and (b) a narrative report describing the
operations of Company and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter (it being understood and agreed that the "Management
Discussion and Analysis" contained in the Company's quarterly report on
Form 10-Q filed with the Securities and Exchange Commission for such
period shall be deemed to comply with the foregoing requirement);
(iii) Year-End Financials: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end
of such Fiscal Year and the related
99 EXECUTION
consolidated and consolidating statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and the corresponding figures from the
Revised Financial Plan or Financial Plan, as the case may be, for the
Fiscal Year covered by such financial statements, all in reasonable detail
and certified by the chief financial officer, chief accounting officer or
controller of Company that they fairly present, in all material respects,
the financial condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated; provided that, with respect to the Fiscal Year ending
December 31, 2000, Company shall not be required to set forth in
comparative form the corresponding figures for the previous Fiscal Year,
(b) a narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management
for such Fiscal Year (it being understood and agreed that the "Management
Discussion and Analysis" contained in the Company's annual report on Form
10-K or such similar report filed with the Securities and Exchange
Commission shall be deemed to comply with the foregoing requirement), and
(c) in the case of such consolidated financial statements, a report
thereon of KPMG Peat Marwick or other independent certified public
accountants of recognized national standing selected by Company and
reasonably satisfactory to Administrative Agent, which report shall be
unqualified, shall express no doubts about the ability of Company and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present, in all material
respects, the consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards;
(iv) Officer's and Compliance Certificates: together with each
delivery of financial statements pursuant to subdivisions (ii) and (iii)
above, (a) an Officer's Certificate (provided that such Officer's
Certificate shall be executed on behalf of Company by its president or one
of its vice-presidents and by its chief financial officer (or if there is
no chief financial officer its chief accounting officer) or its treasurer)
of Company stating that the signers have reviewed the terms of this
Agreement and the other Loan Documents and have made, or caused to be made
under their supervision, a review in reasonable detail of the material
transactions and condition of Company and its Subsidiaries during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the
existence as at the date of such Officer's Certificate, of any condition
or event that constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists, specifying
the nature and period of existence thereof and what action Company has
taken, is taking and proposes to take with respect thereto and (b) a
Compliance Certificate demonstrating in reasonable detail compliance
during and at the end of the applicable accounting periods with the
restrictions contained in Section 7, in each case to the extent compliance
with such restrictions is required to be tested at the end of the
applicable accounting period;
100 EXECUTION
(v) Reconciliation Statements: if, as a result of the Company's
adoption of any change in accounting principles, from those used in the
preparation of the audited financial statements referred to in subsection
5.3, the consolidated financial statements of Company and its Subsidiaries
delivered pursuant to subdivisions (i), (ii), (iii) or (xiii) of this
subsection 6.1 will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles been made, then
(a) together with the first delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1 following
such change, consolidated financial statements of Company and its
Subsidiaries for (x) the current Fiscal Year to the effective date of such
change and (y) the full Fiscal Year immediately preceding the Fiscal Year
in which such change is made, in each case prepared on a pro forma basis
as if such change had been in effect during such periods, and (b) together
with each delivery of financial statements pursuant to subdivision (i),
(ii), (iii) or (xiii) of this subsection 6.1 following such change, a
written statement of the chief accounting officer or chief financial
officer of Company setting forth the differences (including without
limitation any differences that would affect any calculations relating to
the financial covenants set forth in subsection 7.6) which would have
resulted if such financial statements had been prepared without giving
effect to such change;
(vi) Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of Section 7 as
they relate to accounting matters, (b) stating whether, in connection with
their audit examination, any condition or event that constitutes an Event
of Default or Potential Event of Default has come to their attention and,
if such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating that
based on their audit examination nothing has come to their attention that
causes them to believe either or both that the information contained in
the certificates delivered therewith pursuant to subdivision (iv) above is
not correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (c) of subdivision (iv) above for
the applicable Fiscal Year are not stated in accordance with the terms of
this Agreement;
(vii) Accountants' Reports: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all
"Management Letters" submitted to Company by independent certified public
accountants in connection with each annual, interim or special audit of
the financial statements of Company and its Subsidiaries made by such
accountants, including any comment letter submitted by such accountants to
management in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, (b) all regular
101 EXECUTION
and periodic financial reports and all registration statements (other than
on Form S-8 or a similar form) and prospectuses, if any, filed by Company
or any of its Subsidiaries with any securities exchange or with the
Securities and Exchange Commission and (c) all press releases made by
Company or any of its Subsidiaries to the public concerning material
developments in the business of Company or any of its Subsidiaries;
(ix) Events of Default, etc.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Lender has given any notice (other than to Administrative Agent) or taken
any other action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to Company or
any of its Subsidiaries or taken any other action with respect to a
claimed default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be required to be
disclosed in a current report filed by Company with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) whether or not Company is required to file such
reports under the Exchange Act, or (d) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officer's Certificate specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken, is taking
and proposes to take with respect thereto;
(x) Litigation or Other Proceedings: (a) promptly upon any officer
of Company obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial
or otherwise), governmental investigation or arbitration against or
affecting Company or any of its Subsidiaries or any property of Company or
any of its Subsidiaries (collectively, "Proceedings") not previously
disclosed in writing by Company to Lenders or (Y) any material development
in any Proceeding that, in any case set forth in clause (x) or (y):
(1) if adversely determined, could reasonably be expected to
have a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their respective
counsel to evaluate such matters; and (b) within twenty days after the end
of each Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $500,000, and promptly after request
by Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and its
respective counsel to evaluate any of such Proceedings;
102 EXECUTION
(xi) ERISA Events: reasonably promptly upon Company becoming aware
of the occurrence of or forthcoming occurrence of any ERISA Event, which
would reasonably be expected to result in a liability to the Company, any
of its Subsidiaries or any of their respective ERISA Affiliates in excess
of $500,000, a written notice specifying the nature thereof, what action
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto
and, when known, any action taken or threatened by the Internal Revenue
Service, the Department of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: with reasonable promptness, copies of (a) all
notices received by Company, any of its Subsidiaries or (if obtained by
Company) any of their respective ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; and (b) copies of such other
documents or governmental reports or filings relating to any Employee
Benefit Plan as Administrative Agent shall reasonably request;
(xiii) Financial Plans: as soon as practicable and in any event no
later than fifteen (15) days subsequent to the beginning of the Fiscal
Year ending on or about December 31, 2001 and each subsequent Fiscal Year,
a revised consolidated and consolidating plan and financial forecast for
such Fiscal Year and the next four succeeding Fiscal Years (the "Revised
Financial Plan" for such Fiscal Years, it being acknowledged and agreed
that each succeeding Revised Financial Plan shall replace the immediately
preceding Financial Plan or Revised Financial Plan, as the case may be
(other than with respect to any representations, warranties,
certifications or other statements previously made as of the date thereof
with respect to such preceding Financial Plan or Revised Financial Plan,
as the case may be)), including (a) a forecast consolidated and
consolidating balance sheet and forecast consolidated and consolidating
statements of income and cash flows of Company and its Subsidiaries for
each such Fiscal Year and an explanation of the assumptions on which such
forecasts are based, (b) forecast consolidated and consolidating balance
sheet and forecast consolidated and consolidating statements of income and
cash flows of Company and its Subsidiaries for each quarter of the first
such Fiscal Year, together with pro forma financial covenant calculations
for such Fiscal Year determined in a manner consistent with financial
covenant calculations shown in a Compliance Certificate and (c) such other
information and projections as Administrative Agent or any Lender may
reasonably request in writing;
(xiv) Insurance: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance satisfactory to
Administrative Agent outlining all material insurance coverage maintained
as of the date of such report by Company and its Subsidiaries and all
material insurance coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;
(xv) Board of Directors: with reasonable promptness, written notice
of any change in the Board of Directors of Company;
(xvi) New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company
and (b) all of the data required to be set
103 EXECUTION
forth in Schedule 5.1 annexed hereto with respect to all Subsidiaries of
Company (it being understood that such written notice shall be deemed to
supplement Schedule 5.1 annexed hereto for all purposes of this
Agreement);
(xvii) UCC Search Report: As promptly as practicable after the date
of delivery to Administrative Agent of any UCC financing statement
executed by any Loan Party pursuant to subsection 4.1H, 4.2F or 6.8A,
copies of completed UCC searches evidencing the proper filing, recording
and indexing of all such UCC financing statements and listing all other
effective financing statements that name such Loan Party as debtor,
together with copies of all such other financing statements not previously
delivered to Administrative Agent by or on behalf of Company or such Loan
Party;
(xviii) Margin Determination Certificate: together with each
delivery of financial statements pursuant to subdivisions (ii) and (iii)
above, a Margin Determination Certificate demonstrating in reasonable
detail the calculation of the Consolidated Leverage Ratio for the four
consecutive Fiscal Quarters ending on the last day of the accounting
period covered by such financial statements; and
(xix) Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested in writing by Administrative
Agent or any Lender.
.2 Legal Existence, etc.
Except as permitted under subsection 7.7, Company will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its legal existence and all rights and franchises material to its
business; provided, however, that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
.3 Payment of Taxes and Claims; Tax Consolidation.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including claims
for labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a material Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided that no such charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted, so long as (1) such reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made therefor and (2) in the case of a charge or claim which has
or may become a Lien against any of the Collateral, such contest proceedings
conclusively operate to stay the sale of any portion of the Collateral to
satisfy such charge or claim.
104 EXECUTION
B. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds.
A. Maintenance of Properties. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used or useful in the business of Company and its Subsidiaries (including all
Intellectual Property) and from time to time will make or cause to be made all
repairs, renewals and replacements thereof which the Company deems appropriate.
B. Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by corporations
of established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting the generality
of the foregoing, Company will maintain or cause to be maintained (i) flood
insurance with respect to each Flood Hazard Property that is located in a
community that participates in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (ii) replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially reasonable judgment.
Each such policy of insurance shall (a) name Administrative Agent for the
benefit of Lenders as an additional insured thereunder as its interests may
appear and (b) in the case of each business interruption and casualty insurance
policy, contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent for the
benefit of Lenders as the loss payee thereunder for any covered loss in excess
of $2 million and provides for at least (x) in the case of any such policies
with respect to Scientific Games and its Subsidiaries, 30 days and (y) in the
case of any such policies with respect to Company and its Subsidiaries (other
than Scientific Games and its Subsidiaries) 10 days, prior written notice to
Administrative Agent of any modification or cancellation of such policy. Company
will use its commercially reasonable efforts to cause its insurers to change the
provisions of its existing insurance policies to provide for at least 30 days
prior written notice to Administrative Agent of any modification or cancellation
of such policy in connection with the October 31, 2000 renewal of Company's and
its Subsidiaries' insurance policies.
C. Application of Net Insurance/Condemnation Proceeds.
(i) Business Interruption Insurance. Upon receipt by Company or any
of its Subsidiaries of any business interruption insurance proceeds
constituting Net Insurance/Condemnation Proceeds, (a) so long as no Event
of Default or Potential Event
105 EXECUTION
of Default shall have occurred and be continuing, Company or such
Subsidiary may retain and apply such Net Insurance/Condemnation Proceeds
for working capital purposes, and (b) if an Event of Default or Potential
Event of Default shall have occurred and be continuing, Company shall
apply an amount equal to such Net Insurance/Condemnation Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
as provided in subsection 2.4B(iii)(b);
(ii) Casualty Insurance/Condemnation Proceeds. Upon receipt by
Company or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so long as
no Event of Default or Potential Event of Default shall have occurred and
be continuing, Company shall, or shall cause one or more of its
Subsidiaries to, promptly and diligently apply such Net
Insurance/Condemnation Proceeds to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received or, to the extent not so
applied, to prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) as provided in subsection 2.4B(iii)(b) (it being acknowledged
and agreed that, in the event that the Company fully repairs, restores or
replaces, as the case may be, the assets in respect of which such Net
Insurance/Condemnation Proceeds were received for less than the amount of
such Net Insurance/Condemnation Proceeds, Company may retain such excess
Net Insurance/Condemnation Proceeds; provided that the amount of such
excess Net Insurance/Condemnation Proceeds retained by Company shall not
exceed $10 million in any Fiscal Year) and (b) if an Event of Default or
Potential Event of Default shall have occurred and be continuing, Company
shall apply an amount equal to such Net Insurance/Condemnation Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments shall be reduced)
as provided in subsection 2.4B(iii)(b); provided that the aggregate amount
applied by Company to pay or reimburse the costs of repairing, restoring
or replacing such assets pursuant to the foregoing clause (a) shall not
exceed $25 million for any Fiscal Year.
(iii) Net Insurance/Condemnation Proceeds Received by Administrative
Agent. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, if and to the extent
Company would have been required to apply such Net Insurance/Condemnation
Proceeds (if it had received them directly) to prepay the Loans and/or
reduce the Revolving Loan Commitments, Administrative Agent shall, and
Company hereby authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) as provided in subsection 2.4B(iii)(b),
and (b) to the extent the foregoing clause (a) does not apply and (1) the
aggregate amount of such Net Insurance/Condemnation Proceeds received (and
reasonably expected to be received) by Administrative Agent in respect of
any covered loss does not exceed $20 million, Administrative Agent shall
deliver such Net Insurance/Condemnation Proceeds to Company, and Company
shall, or shall cause one or more of its Subsidiaries to, promptly apply
such Net Insurance/Condemnation Proceeds to the costs of repairing,
restoring, or replacing the assets in respect of which such Net
Insurance/Condemnation Proceeds were received, and (2) if the aggregate
amount of Net Insurance/Condemnation Proceeds received (and reasonably
expected to be received) by Administrative Agent in respect of any covered
loss exceeds $20 million, Administrative Agent shall hold such Net
106 EXECUTION
Insurance/Condemnation Proceeds in the Collateral Account established
under the Security Agreement and, so long as Company or any of its
Subsidiaries proceeds diligently to repair, restore or replace the assets
of Company or such Subsidiary in respect of which such Net
Insurance/Condemnation Proceeds were received, Administrative Agent shall
from time to time disburse to Company or such Subsidiary from the
Collateral Account established under the Security Agreement, to the extent
of any such Net Insurance/Condemnation Proceeds remaining therein in
respect of the applicable covered loss, amounts necessary to pay the cost
of such repair, restoration or replacement after the receipt by
Administrative Agent of invoices or other documentation relating to the
amount of costs so incurred and the work performed (including, if required
by Administrative Agent, lien releases and architects' certificates);
provided, however that if at any time Administrative Agent reasonably
determines after discussion with Company (A) that Company or such
Subsidiary is not proceeding diligently with such repair, restoration or
replacement or (B) that such repair, restoration or replacement cannot be
completed with the Net Insurance/Condemnation Proceeds then held by
Administrative Agent for such purpose, together with funds otherwise
available to Company for such purpose, or that such repair, restoration or
replacement cannot be completed within 360 days after the receipt by
Administrative Agent of such Net Insurance/Condemnation Proceeds,
Administrative Agent shall, and Company hereby authorizes Administrative
Agent, one Business Day following Administrative Agent's sending of
written notice to Company, to apply such Net Insurance/ Condemnation
Proceeds to prepay the Loans (and/or the Revolving Loan Commitments shall
be reduced) as provided in subsection 2.4B(iii)(b); provided that
Administrative Agent's failure to provide such written notice will not
affect the right of Administrative Agent to apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and to reduce the
Revolving Loan Commitments) pursuant to this subsection,.
.5 Inspection Rights; Lender Meeting.
A. Inspection Rights. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by
Administrative Agent or any Lender to visit and inspect any of the properties of
Company or of any of its Subsidiaries, to inspect, copy and take extracts from
its and their financial and accounting records, and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants (provided that Company may, if it so chooses, be present at
or participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested.
B. Lender Meeting. Company will, upon at least thirty (30) days prior
written notice from Administrative Agent or Requisite Lenders, participate in a
meeting of Administrative Agent and Lenders once during each Fiscal Year to be
held at Company's corporate offices (or at such other location as may be agreed
to by Company and Administrative Agent) at such time as may be agreed to by
Company and Administrative Agent.
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.6 Compliance with Laws, etc.
Company shall comply, and shall cause each of its Subsidiaries and
all other Persons on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including all Environmental Laws), noncompliance with
which could reasonably be expected to cause, individually or in the aggregate, a
Material Adverse Effect.
.7 Environmental Review and Investigation, Disclosure, Etc.; Company's Actions
Regarding Hazardous Materials Activities, Environmental Claims and Violations of
Environmental Laws.
A. Environmental Review and Investigation. Company agrees that
Administrative Agent may, from time to time and in its reasonable discretion, at
Company's expense, (i) retain an independent professional consultant to review
any environmental audits, investigations, analyses and reports relating to
Hazardous Materials prepared by or for Company and (ii) upon receipt of
information that there may exist at any Facility an environmental matter which,
individually or in the aggregate, would reasonably be expected to result in a
Material Adverse Effect or there may exist at any Facility any Environmental
Claims which, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect, or upon the occurrence of any Event of
Default, conduct its own investigation of any Facility; provided that, in the
case of any Facility no longer owned, leased, operated or used by Company or any
of its Subsidiaries, Company shall only be obligated to use its reasonable good
faith efforts to obtain permission for Administrative Agent's professional
consultant to conduct an investigation of such Facility. For purposes of
conducting such a review and/or investigation, Company hereby grants to
Administrative Agent and its respective agents, employees, consultants and
contractors the right to enter into or onto any Facilities currently owned,
leased, operated or used by Company or any of its Subsidiaries and to perform
such tests on such property (including taking samples of soil, groundwater and
suspected asbestos-containing materials) as are reasonably necessary in
connection therewith. Any such investigation of any Facility shall be conducted,
unless otherwise agreed to by Company and Administrative Agent, during normal
business hours and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at such Facility or to cause any
damage or loss to any property at such Facility. So long as no Event of Default
or Potential Event of Default has occurred and is continuing, Administrative
Agent shall provide reasonable notice to Company prior to the inspection of any
Facility. Company and Administrative Agent hereby acknowledge and agree that any
report of any investigation conducted at the request of Administrative Agent
pursuant to this subsection 6.7A will be obtained and shall be used by
Administrative Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders' security
interests, if any, created by the Loan Documents. Administrative Agent agrees to
deliver a copy of any such report to Company with the understanding that Company
acknowledges and agrees that (x) it will indemnify and hold harmless
Administrative Agent and each Lender from any costs, losses or liabilities
relating to Company's use of or reliance on such report, (y) none of the
Administrative Agent or any Lender makes any representation or warranty with
respect to such report, and (z) by delivering such report to Company, none of
the Administrative Agent or any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
108 EXECUTION
B. Environmental Disclosure. Company will deliver to Administrative Agent
and Lenders:
(i) Environmental Audits and Reports. As soon as practicable
following receipt thereof, copies of material environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility which,
individually or in the aggregate, would reasonably be expected to result
in a Material Adverse Effect or with respect to any Environmental Claims
which, individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect;
(ii) Notice of Certain Releases, Remedial Actions, Etc. Promptly
upon the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported to any federal, state or
local governmental or regulatory agency under any applicable Environmental
Laws, (b) any remedial action taken by Company or any other Person of
which Company has knowledge in response to (1) any Hazardous Materials
Activities the existence of which has a reasonable possibility of
resulting in one or more Environmental Claims having, individually or in
the aggregate, a Material Adverse Effect, or (2) any Environmental Claims
that, individually or in the aggregate, have a reasonable possibility of
resulting in a Material Adverse Effect, and (c) Company's discovery of any
occurrence or condition on any real property adjoining any Facility that
could cause such Facility or any part thereof to be subject to any
material restrictions on the ownership, occupancy, transferability or use
thereof under any Environmental Laws.
(iii) Written Communications Regarding Environmental Claims,
Releases, Etc. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and (c)
any request for information from any governmental agency that suggests
such agency is investigating whether Company or any of its Subsidiaries
may be potentially responsible for any Environmental Claim.
(iv) Notice of Certain Proposed Actions Having Environmental Impact.
Prompt written notice describing in reasonable detail (a) any proposed
acquisition of stock, assets, or property by Company or any of its
Subsidiaries that could reasonably be expected to (1) expose Company or
any of its Subsidiaries to, or result in, Environmental Claims that would
reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect or (2) affect the ability of Company or any of its
Subsidiaries to maintain in full force and effect all material
Governmental Authorizations required under any Environmental Laws for
their respective operations and (b) any proposed action to be taken by
Company or any of its Subsidiaries to commence manufacturing or other
industrial operations or to modify current operations in a manner that
could reasonably be expected to subject Company or any of its Subsidiaries
to any additional obligations or
109 EXECUTION
requirements under any Environmental Laws that would reasonably be
expected to have, individually or in the aggregate, a Material Adverse
Effect.
(v) Other Information. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Administrative Agent in relation to any matters disclosed pursuant to
this subsection 6.7.
C. Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
Company shall promptly undertake, and shall cause each of its Subsidiaries
promptly to undertake, any and all investigations, studies, sampling,
testing, abatement, cleanup, removal, remediation or other response
actions necessary to remove, remediate, clean up or xxxxx any Hazardous
Materials Activity on, under or about any Facility that is required by any
Governmental Authority or that is in violation of any Environmental Laws
or that presents a material risk of giving rise to an Environmental Claim
that would reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect. In the event Company or any of its
Subsidiaries undertakes any such action with respect to any Hazardous
Materials, Company or such Subsidiary shall conduct and complete such
action in compliance with all applicable Environmental Laws and in
accordance with the policies, orders and directives of all federal, state
and local governmental authorities except when, and only to the extent
that, Company's or such Subsidiary's liability with respect to such
Hazardous Materials Activity is being contested in good faith by Company
or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations of
Environmental Laws. Company shall promptly take, and shall cause each of
its Subsidiaries promptly to take, any and all actions necessary to (a)
cure any violation of applicable Environmental Laws by Company or its
Subsidiaries that would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and (b) make an appropriate
response to any Environmental Claim against Company or any of its
Subsidiaries and discharge any obligations it may have to any Person
thereunder where failure to do so would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
.8 Execution of Subsidiary Guaranty and Personal Property Collateral Documents
by Certain Subsidiaries and Future Subsidiaries; IP Collateral.
A. Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Person (other than an Inactive Subsidiary)
becomes a wholly-owned Domestic Subsidiary of Company or any Subsidiary
Guarantor after the Closing Date, Company will promptly notify Administrative
Agent of that fact and (i) Company or such Subsidiary Guarantor shall execute
and deliver to Administrative Agent a Pledge Amendment (as defined in the
Security Agreement) to the Security Agreement pledging all of the stock of such
wholly-owned Domestic Subsidiary owned by Company or such Subsidiary Guarantor
and (ii) cause such wholly-owned Domestic Subsidiary to execute and deliver to
Administrative Agent a counterpart of the
110 EXECUTION
Subsidiary Guaranty and, as applicable, a Pledge Amendment and Additional
Mortgages (as defined in subsection 6.9) and to take all such further actions
and execute all such further documents and instruments (including actions,
documents and instruments comparable to those described in subsection 4.1H) as
may be necessary or, in the reasonable opinion of Administrative Agent,
desirable to create in favor of Administrative Agent, for the benefit of
Lenders, a valid and perfected First Priority Lien on all of the personal and
mixed property assets of such wholly-owned Domestic Subsidiary described in the
applicable forms of Collateral Documents.
B. Execution of Future Foreign Subsidiary Guaranty and Collateral
Documents. In the event that any Person (other than an Inactive Subsidiary)
becomes a direct Foreign Subsidiary of Company or any Subsidiary Guarantor after
the Closing Date, Company will promptly notify Administrative Agent of that fact
and Company or such Subsidiary Guarantor will execute a Pledge Amendment (as
defined in the Security Agreement) to the Security Agreement pledging not less
than 65% (66% in the case of any Foreign Subsidiary organized under the laws of
France or any political subdivision thereof) of the stock of such Foreign
Subsidiary. In the event that U.S. tax laws and/or any other applicable laws in
foreign jurisdictions, as the case may be, are amended to permit a Foreign
Subsidiary to guarantee the Loans without the incurrence of an investment in
U.S. property or other deemed dividends for U.S. tax purposes or without
otherwise resulting in U.S. taxable income or without otherwise violating any
other applicable laws in foreign jurisdictions, Company will promptly notify
Administrative Agent of that fact and Company or such Subsidiary Guarantor will
execute Pledge Amendments to the Security Agreement pledging not less than 100%
of the stock of its wholly-owned Foreign Subsidiaries (other than Inactive
Subsidiaries) and Company will cause its Foreign Subsidiaries (other than
Inactive Subsidiaries) to execute and deliver to Administrative Agent a
counterpart of the Subsidiary Guaranty and the Security Agreement and Additional
Mortgages, as applicable, and to take all such further action and execute all
such further documents and instruments as may be reasonably required to grant
and perfect in favor of Administrative Agent, for the benefit of Lenders, a
First Priority security interest in all of the personal and mixed property
assets of such Subsidiary described in the applicable Collateral Documents.
C. Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with such Loan Documents, (i)
certified copies of such Subsidiary's Certificate or Articles of Incorporation,
together with a good standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which such Person is
qualified as a foreign corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority of
each of such jurisdictions, each to be dated a recent date prior to their
delivery to Administrative Agent, (ii) a copy of such Subsidiary's Bylaws
certified by its secretary or an assistant secretary as of a recent date prior
to their delivery to Administrative Agent, (iii) a certificate executed by the
secretary or an assistant secretary of such Subsidiary as to (a) the fact that
the attached resolutions of the Board of Directors of such Subsidiary approving
and authorizing the execution, delivery and performance of such Loan Documents
are in full force and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary executing such Loan
Documents, and (iv) if required by the Administrative Agent, a favorable opinion
of counsel to such Subsidiary, in form and substance satisfactory to
Administrative Agent and its counsel, as to (a) the due organization and good
standing of such Subsidiary, (b) the due authorization,
111 EXECUTION
execution and delivery by such Subsidiary of such Loan Documents, (c) the
enforceability of such Loan Documents against such Subsidiary, (d) such other
matters (including matters relating to the creation and perfection of Liens in
any Collateral pursuant to such Loan Documents) as Administrative Agent may
reasonably request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
D. Pledge of Foreign Subsidiary Stock. To the extent not otherwise
satisfied on the Closing Date with respect to Company's Foreign Subsidiaries, no
later than 120 days after the Closing Date, Company shall, and shall cause each
of its Subsidiary Guarantors owning direct Foreign Subsidiaries to, deliver to
Administrative Agent such Pledge Amendments or other similar documents executed
with respect to the capital stock of each such Foreign Subsidiary (other than
Inactive Subsidiaries) and to deliver such stock certificates or such other
related documents or instruments as shall grant to Administrative Agent a
perfected First Priority Lien on such capital stock, all in form and substance
reasonably satisfactory to Administrative Agent.
.9 Leasehold Properties; Matters Relating to Additional Real Property
Collateral; Certain Opinions; Removal of Liens.
A. Leasehold Properties.
To the extent not otherwise satisfied on the Closing Date with respect to
Company and its Subsidiaries, each of Company and each applicable Subsidiary
Guarantor shall use its reasonable good faith best efforts (without requiring
Company or such Subsidiary Guarantor to relinquish any material rights or incur
any material obligations or to expend more than a nominal amount of money as
well as reasonable attorneys' fees incurred by (x) the landlord under the
applicable lease, (y) Administrative Agent and (z) Company or such Subsidiary
Guarantor) to:
(i) Landlord Consents and Estoppels; Recorded Leasehold Interests.
Deliver to Administrative Agent no later than 45 days after the Closing
Date, in the case of each Material Leasehold Property of Company or its
Subsidiary Guarantors existing as of the Closing Date, (a) a Landlord
Consent and Estoppel with respect thereto and (b) evidence that such
Material Leasehold Property is a Recorded Leasehold Interest;
(ii) Collateral Access Agreements. Deliver to Administrative Agent
no later than 45 days after the Closing Date, in the case of each
Leasehold Property of Company or its Subsidiary Guarantors existing as of
the Closing Date designated by Administrative Agent, a Collateral Access
Agreement with respect thereto and in the event that any landlord party to
a Collateral Access Agreement requests an estoppel certificate regarding
such Leasehold Property, Company or the applicable Subsidiary Guarantor
will include a description of such Collateral Access Agreement in such
estoppel certificate; and
(iii) Conforming Leasehold Interests. If Company or any of its
Subsidiary Guarantors acquires any Material Leasehold Property after the
Closing Date, Company shall, or shall cause such Subsidiary to, use its
reasonable good faith best efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material
obligations or to expend more than a nominal amount of money as well as
reasonable attorneys' fees incurred by (x) the landlord under the
applicable lease, (y)
112 EXECUTION
Administrative Agent and (z) Company or such Subsidiary) to cause such
Material Leasehold Property to be a Conforming Leasehold Interest.
B. Additional Mortgages, Etc. From and after the Closing Date, in the
event that (i) Company or any Subsidiary Guarantor acquires any fee interest in
real property having a fair market value in excess of $1 million or any Material
Leasehold Property or (ii) at the time any Person becomes a Subsidiary
Guarantor, such Person owns or holds any fee interest in real property or any
Material Leasehold Property, in either case excluding any such Real Property
Asset the encumbrancing of which requires the consent of any applicable lessor
or (in the case of clause (ii) above) then-existing senior lienholder, where
Company and its Subsidiaries are unable to obtain such lessor's or senior
lienholder's consent or (iii) Company or any Subsidiary Guarantor acquires a
leasehold interest in the property presently occupied by Company or any
Subsidiary and located at 000 Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxx (any such
non-excluded Real Property Asset described in the foregoing clause (i) or (ii)
or (iii) being an "Additional Mortgaged Property"), Company or such Subsidiary
Guarantor shall deliver to Administrative Agent, as soon as practicable after
such Person acquires such Additional Mortgaged Property or becomes a Subsidiary
Guarantor, as the case may be, the following:
(i) Additional Mortgage. A fully executed and notarized Mortgage (an
"Additional Mortgage"), duly recorded in all appropriate places in all
applicable jurisdictions, encumbering the interest of such Loan Party in
such Additional Mortgaged Property;
(ii) Opinions of Counsel. If reasonably required by Administrative
Agent, (a) a favorable opinion of counsel to such Loan Party, in form and
substance satisfactory to Administrative Agent and its counsel, as to the
due authorization, execution and delivery by such Loan Party of such
Additional Mortgage and such other matters as Administrative Agent may
reasonably request, and (b) an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent) in the state in which
such Additional Mortgaged Property is located with respect to the
enforceability of the form of Additional Mortgage recorded in such state
and such other matters (including any matters governed by the laws of such
state regarding personal property security interests in respect of any
Collateral) as Administrative Agent may reasonably request, in each case
in form and substance reasonably satisfactory to Administrative Agent;
(iii) Landlord Consent and Estoppel; Recorded Leasehold Interest. In
the case of an Additional Mortgaged Property consisting of a Material
Leasehold Property, after using reasonable good faith best efforts
(without requiring Company or such Subsidiary Guarantor to relinquish any
material rights or incur any material obligations or to expend more than a
nominal amount of money as well as reasonable attorneys' fees incurred by
(i) the landlord under the applicable lease, (ii) Administrative Agent and
(iii) Company or such Subsidiary Guarantor) to obtain the following: (a) a
Landlord Consent and Estoppel, unless Company or such Subsidiary Guarantor
is unable to obtain the Landlord Consent and Estoppel and (b) evidence
that such Material Leasehold Property is a Recorded Leasehold Interest,
and in the case of the property located at 100 Bellevue Road, Newark,
Delaware, (c) a Landlord Consent and Estoppel and (d) evidence that such
Material Leasehold Property is a Recorded Leasehold Interest;
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(iv) Title Insurance. (a) If required by Administrative Agent, an
ALTA mortgagee title insurance policy or an unconditional commitment
therefor (an "Additional Mortgage Policy") issued by the Title Company
with respect to such Additional Mortgaged Property, in an amount
reasonably satisfactory to Administrative Agent, insuring fee simple title
to, or a valid leasehold interest in, such Additional Mortgaged Property
vested in such Loan Party and assuring Administrative Agent that such
Additional Mortgage creates a valid and enforceable First Priority
mortgage Lien on such Additional Mortgaged Property, which Additional
Mortgage Policy (1) shall include, if available in the state in which such
Mortgaged Property is located, a lender's aggregation endorsement, an
endorsement for future advances under this Agreement and for any other
matters reasonably requested by Administrative Agent and (2) shall provide
for affirmative insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to Administrative Agent; and (b) evidence reasonably
satisfactory to Administrative Agent that such Loan Party has (i)
delivered to the Title Company all certificates and affidavits required by
the Title Company in connection with the issuance of the Additional
Mortgage Policy and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title Company in
connection with the issuance of the Additional Mortgage Policy and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Additional Mortgage in the
appropriate real estate records;
(v) Title Report. If no Additional Mortgage Policy is required with
respect to such Additional Mortgaged Property, a title report issued by
the Title Company with respect thereto, dated not more than 30 days prior
to the date such Additional Mortgage is to be recorded and reasonably
satisfactory in form and substance to Administrative Agent;
(vi) Copies of Documents Relating to Title Exceptions. Copies of all
recorded documents listed as exceptions to title or otherwise referred to
in the Additional Mortgage Policy or title report delivered pursuant to
clause (iv) or (v) above;
(vii) Matters Relating to Flood Hazard Properties. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property
is a Flood Hazard Property and (2) if so, whether the community in which
such Flood Hazard Property is located is participating in the National
Flood Insurance Program, (b) if such Additional Mortgaged Property is a
Flood Hazard Property, such Loan Party's written acknowledgement of
receipt of written notification from Administrative Agent (1) that such
Additional Mortgaged Property is a Flood Hazard Property and (2) as to
whether the community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in the
event such Additional Mortgaged Property is a Flood Hazard Property that
is located in a community that participates in the National Flood
Insurance Program, evidence that Company has obtained flood insurance in
respect of such Flood Hazard Property to the extent required under the
applicable regulations of the Board of Governors of the Federal Reserve
System; and
114 EXECUTION
(viii) Surveys. ALTA Surveys of each Additional Mortgaged Property
satisfactory in form and substance to the Administrative Agent and the
Title Company reasonably current and certified to Administrative Agent and
Title Company by a licensed Surveyor.
(ix) Environmental Audit. If required by Administrative Agent,
reports and other information, in form, scope and substance satisfactory
to Administrative Agent and prepared by environmental consultants
satisfactory to Administrative Agent, concerning any environmental hazards
or liabilities to which Company or any of its Subsidiaries may be subject
with respect to such Additional Mortgaged Property.
C. Real Estate Appraisals. Company shall, and shall cause each of its
Subsidiary Guarantors to, permit an independent real estate appraiser
satisfactory to Administrative Agent, upon reasonable notice, to visit and
inspect any Additional Mortgaged Property for the purpose of preparing an
appraisal of such Additional Mortgaged Property satisfying the requirements of
any applicable laws and regulations (in each case to the extent required under
such laws and regulations as determined by Administrative Agent in its
discretion). Any such inspection of any Additional Mortgaged Property shall be
conducted, unless otherwise agreed to by Company and Administrative Agent,
during normal business hours and, to the extent reasonably practicable, shall be
conducted so as not to interfere with the ongoing business operations at such
Additional Mortgaged Property.
D. Surveys. To the extent not otherwise satisfied on the Closing Date with
respect to Company and its Subsidiaries, Company and each Subsidiary Guarantor,
as applicable, shall (a) no later than forty-five (45) days after the Closing
Date, deliver or cause to be delivered to Administrative Agent a survey for each
of the Mortgaged Properties, in the form more specifically described in
subsection 4.1G(vi), (b) no later than fifteen (15) days after the delivery of
such surveys to Administrative Agent, cause the Title Company to issue
endorsements removing the standard survey exception (the "Survey Endorsements")
from the appropriate Closing Date Mortgage Policies, (c) pay to the Title
Company all costs associated with the issuance of such Survey Endorsements and
(d) in the event Administrative Agent determined not to record a Mortgage
against one or more Mortgaged Properties on the Closing Date, because the survey
for such Mortgaged Property was not available, Company shall deliver such
Mortgage no later than forty-five (45) days after the Closing Date.
E. Removal of Liens. With respect to those Liens set forth on Schedule 5.5
annexed hereto, Company shall cause such Liens to be released of record within
15 days of the Closing Date for Closing Date Mortgaged Properties (as such term
is defined in subsection 4.1G); provided that Company may satisfy such
requirement by causing Title Company to issue an endorsement to the Closing Date
Mortgage Policy (as such term is defined in subsection 4.1G) removing the Liens
set forth on Schedule 5.5 as an exception to such Title Policies within the
periods set forth herein for removal of such Liens.
F. Additional Collateral Access Agreements. From and after the Closing
Date, in the event that Company or any Subsidiary Guarantor acquires a Leasehold
Property in which Collateral is located, Company shall inform Administrative
Agent and, upon Administrative
115 EXECUTION
Agent's request, shall use its commercially reasonable efforts to promptly
deliver to Administrative Agent a Collateral Access Agreement for such Leasehold
Property.
.10 Interest Rate Protection.
Within 120 days after the Closing Date, Company shall obtain and
shall thereafter maintain in effect for a period of not less than two years
after the Merger Date one or more Interest Rate Agreements with respect to the
Term Loans, in an aggregate notional principal amount of not less than 50% of
the Term Loans outstanding on the Closing Date, each such Interest Agreement to
be in form and substance reasonably satisfactory to Administrative Agent.
.11 Fiscal Year .
On or before December 31, 2000, Company shall change its Fiscal Year-end
from October 31 of each calendar year to December 31 of each calendar year.
.12 Connecticut Lottery Corporation.
Company hereby agrees to use its commercially reasonable efforts to
procure within 60 days an agreement by and among Company, the Connecticut
Lottery Corporation ("CLC") and Administrative Agent substantially similar to
that certain Agreement dated as of May 22, 1998 by and among CLC, Company,
Autotote Lottery Corporation and Xxxxxx Financial Inc. and otherwise reasonably
satisfactory in form and substance to Administrative Agent.
.13 Delisting.
On or before the second Business Day following the Closing Date, Company
shall cause appropriate documents to delist the Scientific Games Common Stock to
be filed with the New York Stock Exchange and the SEC.
Section 6. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
.1 Indebtedness.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4 and, upon
any obligations actually
116 EXECUTION
arising pursuant thereto, the Indebtedness corresponding to the Contingent
Obligations so extinguished;
(iii) Company and its Subsidiaries may become and remain liable with
respect to (x) Purchase Money Indebtedness and (y) Indebtedness in respect
of Capital Leases entered into after the Closing Date and incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used in the
business of the Company or its Subsidiaries; provided that the aggregate
amount of such Purchase Money Indebtedness and Indebtedness incurred in
respect of such Capital Leases, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of the
Company or its Subsidiaries, does not exceed $20 million at any time
outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its Subsidiary Guarantors and any of its Foreign
Subsidiaries, and any Subsidiary Guarantor of Company may become and
remain liable with respect to Indebtedness to Company or any other
Subsidiary Guarantor or any Foreign Subsidiary of Company and any Foreign
Subsidiary of Company may become and remain liable with respect to
Indebtedness (A) to Company or any Subsidiary Guarantor to the extent that
such Indebtedness is a permitted Investment by Company or such Subsidiary
Guarantor under subsection 7.3(viii) or subsection 7.3(v) and (B) to any
other Foreign Subsidiary of Company to the extent that such Indebtedness
is a permitted Investment by such Foreign Subsidiary under subsection
7.3(viii); provided that (a) all such intercompany Indebtedness shall be
evidenced by promissory notes; (b) all such intercompany Indebtedness owed
by Company to any of its Subsidiaries shall be subordinated in right of
payment to the payment in full of the Obligations pursuant to the terms of
the applicable promissory notes or an intercompany subordination
agreement, and (c) any payment by any Subsidiary of Company under any
guaranty of the Obligations shall result in a pro tanto reduction of the
amount of any intercompany Indebtedness owed by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;
(v) Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness and Indebtedness in respect of Capital
Leases, in each case, existing as of the Closing Date and described in
Schedule 7.1 annexed hereto; provided that the aggregate amount of such
Indebtedness does not exceed $2.5 million at any time outstanding;
(vi) Company may become and remain liable with respect to
Indebtedness evidenced by the Senior Subordinated Notes in an aggregate
principal amount which does not exceed $150 million on the Closing Date;
(vii) Intentionally Omitted
(viii) Intentionally Omitted
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(ix) Company and its Domestic Subsidiaries may become and remain
liable with respect to other Indebtedness, and Contingent Obligations
permitted under subsection 7.4(x), in an aggregate amount not to exceed
$20 million at any time outstanding;
(x) Scientific Games International Limited ("SGIL") may become and
remain liable with respect to Indebtedness in respect of mortgage
financing of the land and improvements comprising the UK Property and any
equipment located at the UK Property, including costs, fees and expenses
related to such mortgage financing; provided that the aggregate amount of
such Indebtedness shall not exceed $20 million at any time outstanding;
provided, further that (x) the recourse of the lenders with respect to
such Indebtedness is limited solely to the land and improvements
comprising the U.K. Property and any equipment located at the UK Property
without further recourse to any of Company or any of its Subsidiaries
(including SGIL) or any other asset of any of Company or any of its
Subsidiaries (including SGIL), and (y) Company shall make prepayments
pursuant to subsection 2.4B(iii)(d) in an amount equal to the Net Debt
Securities Proceeds received by Company and its Subsidiaries in connection
with the incurrence of such Indebtedness, which shall be applied to prepay
the Loans as provided in subsection 2.4B(iii)(d);
(xi) Company's Foreign Subsidiaries may become and remain liable
with respect to other Indebtedness, and Contingent Obligations permitted
under subsection 7.4(xi), in an aggregate amount not to exceed $10 million
at any time outstanding; provided that any such Indebtedness is
non-recourse to Company and its Domestic Subsidiaries; and
(xii) Company and its Subsidiaries, as applicable, may become and
remain liable with respect to Indebtedness which refinances the
Indebtedness described in clause (v) of this subsection 7.1; provided that
(x) such refinancing Indebtedness shall be incurred by Company or the
applicable Subsidiary, as the case may be, that incurred the Indebtedness
described in clause (v) of this subsection 7.1 that is being refinanced,
(y) the maturity date of such refinancing Indebtedness shall be later than
the maturity date of the Indebtedness described in clause (v) of this
subsection 7.1 that is being refinanced and (z) the aggregate principal
amount of such refinancing Indebtedness shall be less than the lesser of
(1) the sum of the aggregate principal amount of Indebtedness being
refinanced as of the date of such refinancing plus all related costs, fees
and expenses related to the refinancing and (2) the aggregate principal
amount of such Indebtedness as of the Closing Date.
.2 Liens and Related Matters.
A. Prohibition on Liens. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
118 EXECUTION
(i) Permitted Encumbrances;
(ii) Liens granted pursuant to the Collateral Documents;
(iii) Liens described in Schedule 7.2 annexed hereto;
(iv) Liens securing Indebtedness permitted under subsection 7.1(iii)
with respect to the property or assets (and the proceeds thereof) financed
by such Indebtedness;
(v) Liens securing Indebtedness incurred by a Foreign Subsidiary
under (X) subsection 7.1(xi) and encumbering only the assets of such
Foreign Subsidiary and (Y) subsection 7.1(x) and encumbering only the UK
Property and any equipment located at the UK Property;
(vi) Liens securing Indebtedness permitted by subsection 7.1(ix) in
an aggregate amount not to exceed $10 million at any time outstanding; and
(vii) Liens securing Indebtedness permitted by subsection 7.1(xii),
solely to the extent such Liens replace Liens set forth in Schedule 7.2
annexed hereto with respect to the Indebtedness permitted by subsection
7.1(v) that is being refinanced by the Indebtedness permitted by
subsection 7.1(xii).
B. Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; provided that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A; and provided further that Company shall under no circumstances
be required to make or cause to be made effective provision whereby the
Obligations will be secured, directly or indirectly, by Margin Stock.
C. No Further Negative Pledges. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale or held in respect of
Capital Leases permitted pursuant to subsection 7.1(iii), neither Company nor
any of its Subsidiaries shall enter into any agreement (other than (x) the
Senior Subordinated Note Indenture and (y) an agreement prohibiting only the
creation of Liens securing Subordinated Indebtedness) prohibiting the creation
or assumption of any Lien upon any of its properties or assets, whether now
owned or hereafter acquired; provided that the foregoing shall not preclude
Company and its Subsidiaries from entering into:
(a) agreements with governmental authorities prohibiting the
creation or assumption of any Lien on assets located in the jurisdiction of any
such governmental authority and utilized pursuant to the applicable agreement,
(i) to the extent existing on the Closing Date, as set forth in Schedule 7.2C(a)
and (ii) to the extent such agreements are entered into after the Closing Date,
at the time any such agreement is entered into, the aggregate value of such
assets subject to such prohibitions, together with the aggregate value of any
such assets subject to the
119 EXECUTION
encumbrances and restrictions permitted by subsection 7.2D(a)(ii), in each case
as set forth on the most recent consolidated balance sheet of Company and its
Subsidiaries in accordance with GAAP, shall not exceed 5% of the aggregate value
of all assets set forth on the most recent consolidated balance sheet of Company
and its Subsidiaries in accordance with GAAP;
(b) (A) agreements containing customary provisions restricting (1)
the subletting or assignment of any lease or (2) the transfer of copyrighted or
patented materials, (B) agreements containing provisions that restrict the
assignment of such agreements or rights thereunder; provided that payments
received or to be received pursuant to such agreements shall be subject to the
Liens securing the Obligations or (C) customary provisions contained in the
terms of any shares, interests, participations or other equivalents of corporate
stock of any Subsidiary of Company that is a corporation or any partnership,
limited liability company or other equity interests of any Subsidiary of Company
that is not a corporation (hereinafter "Equity Interests") restricting the
payment of dividends and the making of distributions on Equity Interests, in
each case described in this clause (C) solely to the extent set forth in
Schedule 7.2D(c);
(c) agreements or instruments governing Indebtedness permitted by
subsection 7.1(xi) prohibiting the creation or assumption of any Lien on assets
or properties of the Foreign Subsidiary incurring such Indebtedness; provided
that the projected Consolidated EBITDA attributable to the Foreign Subsidiary
incurring such Indebtedness and any of its Subsidiaries in any Fiscal Year (as
set forth in the Financial Plan or Revised Financial Plan, as the case may be,
for such Fiscal Year) shall not exceed 5% of the aggregate projected
Consolidated EBITDA of Company and its Subsidiaries in such Fiscal Year (as set
forth in the Financial Plan or Revised Financial Plan, as the case may be, for
such Fiscal Year); provided further that, in the event that the Foreign
Subsidiary incurring such Indebtedness was not included in the Financial Plan or
Revised Financial Plan, as the case may be, for such Fiscal Year because such
Foreign Subsidiary was not a Subsidiary of Company at the time such Financial
Plan or Revised Financial Plan, as the case may be, was prepared, for purposes
of the preceding proviso the projected Consolidated EBITDA attributable to such
Foreign Subsidiary and its Subsidiaries for such Fiscal Year shall be deemed to
be the projected Consolidated EBITDA of such Foreign Subsidiary and its
Subsidiaries for the twelve months immediately succeeding the incurrence of such
Indebtedness as detailed in an Officer's Certificate in form and substance
reasonably acceptable to Administrative Agent delivered to Administrative Agent
prior to the incurrence of such Indebtedness;
(d) restrictions on the transfer of assets subject to any Lien
permitted under Subsection 7.2 to the extent imposed by the agreements creating
such Liens;
(e) agreements containing customary rights of first refusal with
respect to Company's and its Subsidiaries' interests in their respective non
wholly-owned Subsidiaries and Joint Ventures; provided that any such agreements
existing on the Closing Date are set forth in Schedule 7.2C(e);
(f) applicable law to the extent restricting the transfer of assets;
and
120 EXECUTION
(g) agreements (other than agreements referred to in clause (a)
above) prohibiting the creation or assumption of any Lien on assets utilized
pursuant to such agreement solely to the extent set forth in Schedule 7.2C(g).
D. No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein, Company will not, and will not permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company (other than any such restrictions imposed by
applicable law), (ii) repay or prepay any Indebtedness owed by such Subsidiary
to Company or any other Subsidiary of Company (other than any such restrictions
imposed by applicable foreign law with respect to the repayment or prepayment of
Indebtedness owed to or by a Foreign Subsidiary), (iii) make loans or advances
to Company or any other Subsidiary of Company, or (iv) transfer any of its
property or assets to Company or any other Subsidiary of Company, except for
such consensual encumbrances or restrictions to the extent arising pursuant to:
(a) agreements with governmental authorities containing a consensual
encumbrance or restriction on the ability of any Subsidiary to transfer any of
its assets located in the jurisdiction of any such governmental authority and
utilized pursuant to the applicable agreement to Company or any other Subsidiary
of Company (i) to the extent existing on the Closing Date, as set forth on
Schedule 7.2D(a) and (ii) to the extent such agreements are entered into after
the Closing Date, at the time any such agreement is entered into, the aggregate
value of such assets subject to such encumbrances or restrictions, together with
the aggregate value of any such assets subject to the prohibitions permitted by
subsection 7.2C(a)(ii), in each case as set forth on the most recent
consolidated balance sheet of Company and its Subsidiaries in accordance with
GAAP, shall not exceed 5% of the aggregate value of all assets set forth on the
most recent consolidated balance sheet of Company and its Subsidiaries in
accordance with GAAP;
(b) the Senior Subordinated Notes, the Senior Subordinated Note
Indenture or any guarantee thereof;
(c) (A) solely with respect to clause (iv) above, agreements
containing customary provisions restricting (1) the subletting or assignment of
any lease or (2) the transfer of copyrighted or patented materials, (B) solely
with respect to clause (iv) above, provisions in agreements that restrict the
assignment of such agreements or rights thereunder; provided that payments
received or to be received pursuant to such agreements shall be subject to the
Liens securing the Obligations or (C) solely with respect to clause (i) above,
customary provisions contained in the terms of any Equity Interests restricting
the payment of dividends and the making of distributions on Equity Interests, in
each case solely to the extent set forth in Schedule 7.2D(c);
(d) any agreement or instrument governing Indebtedness permitted by
subsection 7.1(xi) containing any consensual encumbrance or restriction on the
ability of the Foreign Subsidiary incurring such Indebtedness to (i) pay
dividends or make any other distributions on any of such Foreign Subsidiary's
capital stock or (ii) transfer any of its property or assets to Company or any
other Subsidiary of Company; provided that the projected Consolidated EBITDA
121 EXECUTION
attributable to the Foreign Subsidiary incurring such Indebtedness and any of
its Subsidiaries in any Fiscal Year (as set forth in the Financial Plan or
Revised Financial Plan, as the case may be, for such Fiscal Year) shall not
exceed 5% of the aggregate projected Consolidated EBITDA of Company and its
Subsidiaries in such Fiscal Year (as set forth in the Financial Plan or Revised
Financial Plan, as the case may be, for such Fiscal Year); provided further
that, in the event that the Foreign Subsidiary incurring such Indebtedness was
not included in the Financial Plan or Revised Financial Plan, as the case may
be, for such Fiscal Year because such Foreign Subsidiary was not a Subsidiary of
Company at the time such Financial Plan or Revised Financial Plan, as the case
may be, was prepared, for purposes of the preceding proviso the projected
Consolidated EBITDA attributable to such Foreign Subsidiary and its Subsidiaries
for such Fiscal Year shall be deemed to be the projected Consolidated EBITDA of
such Foreign Subsidiary and its Subsidiaries for the twelve months immediately
succeeding the incurrence of such Indebtedness as detailed in an Officer's
Certificate in form and substance reasonably acceptable to Administrative Agent
delivered to Administrative Agent prior to the incurrence of such Indebtedness;
(e) solely with respect to clause (iv) above, restrictions on the
transfer of assets subject to any Liens permitted under subsection 7.2 to the
extent imposed by the agreements creating such Liens;
(f) solely with respect to clause (iv) above, restrictions imposed
by any executed agreement with respect to an Asset Sale not in violation of this
Agreement with respect to the transfer of the assets to be sold in such Asset
Sale; and
(g) customary rights of first refusal with respect to Company's and
its Subsidiaries' interests in their respective non-wholly owned Subsidiaries
and Joint Ventures; provided that any such agreements existing on the Closing
Date are set forth in Schedule 7.2C(e).
.3 Investments; Joint Ventures.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date in any Subsidiaries of
Company;
(iii) Company and its wholly-owned Subsidiary Guarantors may make
Investments in any of Company's wholly-owned Subsidiary Guarantors and
Subsidiaries of Company may make Investments in Company;
(iv) Company and its Subsidiaries may make (x) Consolidated Capital
Expenditures permitted by subsection 7.8 and (y) Consolidated Capital
Software Expenditures permitted by subsection 7.16;
(v) Company and its Subsidiaries may continue to own the Investments
owned by them as of the Closing Date and described in Schedule 7.3 annexed
hereto;
122 EXECUTION
(vi) Company and its Subsidiaries may make and own Investments in
Permitted Acquisitions permitted under subsection 7.7(vii);
(vii) Company and its Subsidiaries may hold non-cash consideration
consisting of promissory notes received in connection with Asset Sales
permitted under subsection 7.7(viii) so long as the aggregate principal
amount of all such promissory notes does not exceed $15 million at any
time outstanding (determined without regard to any write-downs or
write-offs thereof);
(viii) Company and its Subsidiaries may make and own Investments in
Foreign Subsidiaries in an aggregate amount not to exceed $15 million at
any time outstanding; provided that in the event that any of Company or
any of its Subsidiaries has an Investment in a Foreign Subsidiary that is
solely a holding company with no material assets, liabilities or
operations ("Foreign Holdco") other than an equity Investment in another
Foreign Subsidiary that is a direct subsidiary of Foreign Holdco,
Company's or such Subsidiary's equity Investment in Foreign Holdco will
not be counted for purposes of the $15 million amount permitted by this
subsection 7.3(viii) to the extent such equity Investment in Foreign
Holdco is equal to or less than the equity Investment of Foreign Holdco in
such other Foreign Subsidiary;
(ix) Company and its Subsidiaries may make and own Investments in
Joint Ventures and non-wholly owned Subsidiaries in an aggregate amount
not to exceed $15 million at any time outstanding;
(x) Company and its Subsidiaries may make and own other Investments
in an aggregate amount not to exceed $5 million at any time outstanding;
and
(xi) So long as no Event of Default or Potential Event of Default
has occurred and is continuing, Company may make Investments as required
to be made by the Company pursuant to and in accordance with the terms of
the Consulting Agreement.
.4 Contingent Obligations.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty;
(ii) Company may become and remain liable with respect to Contingent
Obligations in respect of (x) Letters of Credit and (y) surety bonds
incurred in the ordinary course of business;
(iii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under (x) Interest Rate Agreements with
Lenders with respect to Indebtedness in an aggregate notional principal
amount not to exceed at any time the aggregate amount of the Commitments
and (y) Currency Agreements with Lenders entered into in the ordinary
course of business for hedging purposes only;
123 EXECUTION
(iv) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary indemnification
and purchase price adjustment obligations incurred in connection with
Asset Sales or other sales of assets;
(v) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of the performance by the
Subsidiaries of Company of obligations (other than obligations for the
payment of money) of such Subsidiaries incurred in the ordinary course of
business;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness of
Company or any of its wholly-owned Domestic Subsidiaries permitted by
subsection 7.1 (other than subsection 7.1(vi));
(vii) Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in Schedule 7.4 annexed
hereto;
(viii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in connection with Operating
Leases;
(ix) Subsidiary Guarantors may become and remain liable with respect
to Contingent Obligations arising under subordinated guaranties of the
Senior Subordinated Notes as set forth in and to the extent required under
the Senior Subordinated Note Indenture as in effect on the Closing Date;
(x) Company and its Domestic Subsidiaries may become and remain
liable with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of Company and its
Domestic Subsidiaries in respect of all such Contingent Obligations,
together with the aggregate principal amount of all Indebtedness permitted
under subsection 7.1(ix), shall at no time exceed $20 million;
(xi) Company's Foreign Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided that the Contingent
Obligations are non-recourse to Company and its Domestic Subsidiaries and
the maximum aggregate liability, contingent or otherwise, of Company's
Foreign Subsidiaries in respect of all such Contingent Obligations,
together with the aggregate principal amount of all Indebtedness permitted
under subsection 7.1(xi), shall at no time exceed $10 million;
(xii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of the contingent deferred
purchase price of any Permitted Acquisitions in an aggregate amount not to
exceed $5 million at any time outstanding; and
(xiii) Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of any Indebtedness of
SGIL permitted under subsection 7.1(x).
124 EXECUTION
.5 Restricted Junior Payments.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, except:
(i) Company may make Restricted Junior Payments consisting of
payment-in-kind dividends paid on the Convertible Preferred Stock;
(ii) Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum
for payment on the Senior Subordinated Notes; provided that Company may
make payments of regularly scheduled interest in respect of the Senior
Subordinated Notes in accordance with the terms of and to the extent
required by, and subject to the subordination provisions contained in, the
Senior Subordinated Note Indenture;
(iii) Company may repurchase (x) shares of its common stock and/or
warrants, rights or options to purchase such common stock to the extent
such repurchase is deemed to occur upon the exercise of stock options to
acquire common stock or similar arrangements to acquire common stock;
provided that such repurchased common stock and/or warrants, rights or
options to acquire shares of such common stock represent a portion of the
exercise price thereof; provided further that no cash is expended (or
obligation to expend cash is incurred) by Company or any of its
Subsidiaries pursuant to this clause (iii)(x) and (y) shares of its common
stock and/or warrants, rights or options to purchase such common stock
held by directors, executive officers, members of management or employees
of Company or any of its Subsidiaries upon the death, disability,
retirement or termination of employment of such directors, executive
officers, members of management or employees, so long as (1) no Default or
Event of Default then exists or would result therefrom and (2) the
aggregate amount of cash expended by Company pursuant to this clause (iii)
(y) does not exceed $2 million in any Fiscal Year of Company; and
(iv) Company may make withholding tax payments on behalf of the
holders of the Convertible Preferred Stock solely to the extent required
in connection with the payment by Company of payment-in-kind dividends on
the Convertible Preferred Stock; provided that the aggregate amount of
such withholding tax payments made by Company in any Fiscal Year shall not
exceed $1 million; provided, further, that the aggregate amount of such
withholding tax payments made by Company shall not exceed $5 million for
the period from the Closing Date through and including December 31, 2005;
provided, further, still, that prior to Company making any such
withholding tax payments in any Fiscal Year, the holders of the
Convertible Preferred Stock shall have previously made, or transferred to
Company adequate funds so that Company may make on behalf of the holders
of the Convertible Preferred Stock, withholding tax payments in an amount
equal to 10% of the fair market value of such payment-in-kind dividends.
125 EXECUTION
.6 Financial Covenants
A. Minimum Fixed Charge Coverage Ratio. Company shall not permit the
Consolidated Fixed Charge Coverage Ratio, calculated on a Pro Forma Basis, for
any four-Fiscal Quarter period ending during any of the periods set forth below
to be less than the correlative ratio indicated:
Minimum Fixed Charge
Period Coverage Ratio
--------------------------------------- ---------------------
Closing Date through September 30, 2000 1.35:1.00
October 1, 2000 through June 30, 2002 1.40:1.00
July 1, 2002 and thereafter 1.45:1.00
A. Maximum Consolidated Leverage Ratio. Company shall not permit the
Consolidated Leverage Ratio, calculated on a Pro Forma Basis, for any
four-Fiscal Quarter period ending during any of the periods set forth below to
exceed the correlative ratio indicated:
Maximum Consolidated
Period Leverage Ratio
----------------------------------------- ---------------------
Closing Date through December 31, 2000 5.25:1.00
January 1, 2001 through March 31, 2001 5.00:1.00
April 1, 2001 through June 30, 2001 4.75:1.00
July 1, 2001 through September 30, 2001 4.50:1.00
October 1, 2001 through December 31, 2001 4.35:1.00
January 1, 2002 through March 31, 2002 4.15:1.00
April 1, 2002 through June 30, 2002 4.10:1.00
July 1, 2002 through September 30, 2002 3.95:1.00
October 1, 2002 through December 31, 2002 3.80:1.00
January 1, 2003 through March 31, 2003 3.65:1.00
April 1, 2003 through June 30, 2003 3.55:1.00
July 1, 2003 through September 30, 2003 3.40:1.00
October 1, 2003 through December 31, 2003 3.30:1.00
January 1, 2004 through March 31, 2004 3.25:1.00
April 1, 2004 through June 30, 2004 3.15:1.00
July 1, 2004 through September 30, 2004 3.05:1.00
October 1, 2004 through December 31, 2004 2.95:1.00
126 EXECUTION
January 1, 2005 through March 31, 2005 2.85:1.00
April 1, 2005 through June 30, 2005 2.75:1.00
July 1, 2005 through September 30, 2005 2.70:1.00
October 1, 2005 through December 31, 2005 2.60:1.00
January 1, 2006 through March 31, 2006 2.50:1.00
April 1, 2006 through June 30, 2006 2.45:1.00
July 1, 2006 through September 30, 2006 2.35:1.00
October 1, 2006 through December 31, 2006 2.25:1.00
January 1, 2007 and thereafter 2.00:1.00
A. Minimum Interest Coverage Ratio. Company shall not permit the
Consolidated Interest Coverage Ratio, calculated on a Pro Forma Basis, during
any of the periods set forth below to be less than the correlative ratio
indicated:
Minimum Interest
Period Coverage Ratio
----------------------------------------- ---------------------
Closing Date through December 31, 2000 1.70:1.00
January 1, 2001 through March 31, 2001 1.75:1.00
April 1, 2001 through June 30, 2001 1.85:1.00
July 1, 2001 through September 30, 2001 1.90:1.00
October 1, 2001 through December 31, 2001 1.95:1.00
January 1, 2002 through March 31, 2002 2.05:1.00
April 1, 2002 through June 30, 2002 2.10:1.00
July 1, 2002 through September 30, 2002 2.20:1.00
October 1, 2002 through December 31, 2002 2.25:1.00
January 1, 2003 through March 31, 2003 2.35:1.00
April 1, 2003 through June 30, 2003 2.45:1.00
July 1, 2003 through September 30, 2003 2.50:1.00
October 1, 2003 through December 31, 2003 2.60:1.00
January 1, 2004 through March 31, 2004 2.65:1.00
April 1, 2004 through June 30, 2004 2.75:1.00
July 1, 2004 through September 30, 2004 2.80:1.00
October 1, 2004 through December 31, 2004 2.90:1.00
127 EXECUTION
January 1, 2005 through March 31, 2005 2.95:1.00
April 1, 2005 through June 30, 2005 3.05:1.00
July 1, 2005 through September 30, 2005 3.15:1.00
October 1, 2005 through December 31, 2005 3.25:1.00
January 1, 2006 through March 31, 2006 3.35:1.00
April 1, 2006 through June 30, 2006 3.45:1:00
July 1, 2006 and thereafter 3.50:1.00
A. Minimum Consolidated Net Worth. Company shall not permit Consolidated
Net Worth at any time to be less than the sum of (i) $38.7 million ("Base
Amount") plus (ii) (a) the sum of Adjusted Consolidated Net Income for each
Fiscal Quarter ending after the Closing Date and ending on or before such date
of determination in which Adjusted Consolidated Net Income was positive
multiplied by (b) 75%; provided that for purposes of calculating Adjusted
Consolidated Net Income for the Fiscal Quarter ending on September 30, 2000,
such Fiscal Quarter shall be deemed to commence on the first day after the
Closing Date and end on September 30, 2000; provided further, that the Base
Amount shall be increased to reflect 75% of any increase in the Consolidated Net
Worth of Company and its Subsidiaries as a result of any Merger-related
accounting adjustments made on or after the Closing Date.
.2 Restriction on Fundamental Changes; Asset Sales and Acquisitions.
Company shall not, and shall not permit any of Company's
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of Company's Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Domestic Subsidiary of Company may be merged with or into
Company or any wholly-owned Subsidiary Guarantor, or be liquidated, wound
up or dissolved, or all or any part of its business, property or assets
may be conveyed, sold, leased, transferred or otherwise disposed of, in
one transaction or a series of transactions, to Company or any
wholly-owned Subsidiary Guarantor; provided that, in the case of such a
merger, Company or such wholly-owned Subsidiary Guarantor shall be the
continuing or surviving corporation;
(ii) Company and its Subsidiaries may make (x) Consolidated Capital
Expenditures permitted under subsection 7.8 and (y) Consolidated Capital
Software Expenditures permitted under subsection 7.16;
128 EXECUTION
(iii) Company and its Subsidiaries may dispose of obsolete, worn out
or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; provided that
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) Acquisition Co. and Scientific Games may consummate the Merger;
(vi) Company or any of its Subsidiaries may convey, sell, transfer
or otherwise dispose for Cash of any Margin Stock, whether now owned or
hereafter acquired; provided that such disposition is for fair value and
the proceeds are held in Cash or Cash Equivalents;
(vii) Company and its Subsidiaries may consummate Permitted
Acquisitions; provided that each of the following conditions is satisfied:
(a) the Acquired Business is engaged in a line of business
that Company and its Subsidiaries are permitted to engage in under
subsection 7.13A;
(b) the Acquired Business becomes a wholly-owned Subsidiary
Guarantor of Company or is acquired by a wholly-owned Subsidiary
Guarantor of Company in such Permitted Acquisition;
(c) the aggregate amount of Cash consideration paid by Company
and its Subsidiaries (x) for any Permitted Acquisition or series of
related Permitted Acquisitions made after the Closing Date shall not
exceed $20 million and (y) for all Permitted Acquisitions made after
the Closing Date shall not exceed $60 million;
(d) the excess of the Revolving Loan Commitments over the
Total Utilization of Revolving Loan Commitments immediately after
giving effect to such Permitted Acquisition will be not less than
$15 million;
(e) concurrently with the consummation of such Permitted
Acquisition, Company shall, and shall cause its Subsidiaries to,
comply with the requirements of subsections 6.8 and 6.9 with respect
to such Permitted Acquisition;
(f) Company shall deliver to Administrative Agent an Officer's
Certificate (1) certifying that no Potential Event of Default or
Event of Default shall then exist or shall occur as a result of such
Permitted Acquisition and (2) demonstrating that after giving effect
to such Permitted Acquisition and to all Indebtedness to be incurred
or assumed or repaid in connection with or as consideration for such
Permitted Acquisition, Company will be in compliance with the
financial covenants set forth in subsection 7.6, calculated on a Pro
Forma Basis, as of the last day of the four Fiscal Quarter period
most recently ended prior to the date of the proposed Permitted
Acquisition for which the relevant financial information is
available;
129 EXECUTION
(g) prior to the consummation of any Permitted Acquisition
having a purchase price in excess of $10 million, Company shall
deliver to Administrative Agent a copy, prepared in conformity with
GAAP (subject to year-end adjustments and the absence of footnotes),
of (i) financial statements of the Person or business so acquired
for the immediately preceding four consecutive Fiscal Quarter period
corresponding to the calculation period for the financial covenants
in the immediately preceding clause and (ii) to the extent available
from the applicable seller of the Acquired Business or the Acquired
Business, audited or reviewed financial statements of the Person or
business so acquired for the fiscal year ended within such period of
such Person;
(h) prior to the consummation of any Permitted Acquisition
having a purchase price in excess of $15 million, Company shall
deliver to Administrative Agent revised financial projections (in a
form substantially consistent with previously provided projections)
for Company, on a Pro Forma Basis, for such proposed Permitted
Acquisition for the succeeding four Fiscal Quarters;
(i) the aggregate purchase price of all Permitted Acquisitions
that result in a new Foreign Subsidiary of Company or result in the
Acquired Business being owned by a Foreign Subsidiary of Company
shall not exceed $10 million; and
(viii) Company and its Subsidiaries may make Asset Sales of
assets having a fair market value of not in excess of $20 million in
any Fiscal Year or of $60 million in the aggregate for all such
Asset Sales during the term of this Agreement; provided that in each
case (x) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; (y) 80% of
the consideration received therefor shall be Cash; and (z) the
proceeds of any such Asset Sale are applied as required by
subsection 2.4B(iii)(a).
.3 Consolidated Capital Expenditures.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in
an aggregate amount in excess of the corresponding amount (the "Maximum
Consolidated Capital Expenditures Amount") set forth below opposite such Fiscal
Year; provided that the Maximum Consolidated Capital Expenditures Amount for any
Fiscal Year shall be increased by an amount equal to the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous Fiscal Year
only (prior to any adjustment in accordance with this proviso) over the actual
amount of Consolidated Capital Expenditures for such previous Fiscal Year;
provided, further that in no event shall the amount of such increase exceed 50%
of the Maximum Consolidated Capital Expenditures Amount for such previous Fiscal
Year (prior to any adjustment in accordance with this proviso):
130 EXECUTION
Fiscal Year Maximum Consolidated Capital
Expenditures
----------------------------------------------------------------------
Fiscal Year 2000 $80.0 million
Fiscal Year 2001 $45.0 million
Fiscal Year 2002 $35.0 million
Fiscal Year 2003 $28.0 million
Fiscal Year 2004 $28.0 million
Fiscal Year 2005 $25.0 million
Fiscal Year 2006 $25.0 million
Fiscal Year 2007 $18.75 million
.1 Sales and Lease-Backs.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease; provided that Company and its Subsidiaries may become and remain
liable as lessee, guarantor or other surety with respect to any such lease to
the extent that (i) such lease, if a Capital Lease, is permitted pursuant to
subsection 7.1(iii), (ii) the consideration received is at least equal to the
fair market value of the property sold as determined in good faith by Company's
Board of Directors; provided prior consent of the Board of Directors was
obtained if such fair market value was determined to be in excess of $1 million
and (iii) the Net Asset Sale Proceeds derived from the sale/leaseback of such
sold properties or assets owned by the Company or its Subsidiaries shall be
applied to prepay Loans and/or reduce commitments pursuant to subsection
2.4B(iii)(a) without regard to any reinvestment of such Net Asset Sale Proceeds
otherwise permitted under such subsection.
.2 Sale or Discount of Receivables.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
provided that Company may discount accounts receivable arising under letters of
credit with respect to deferred customer financing in the ordinary course of
131 EXECUTION
business so long as the aggregate amount of such discount does not exceed $2
million in any Fiscal Year.
.3 Transactions with Stockholders and Affiliates.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; provided that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of Company and its Subsidiaries, (iii)
reasonable fees and compensation paid to, and indemnity provided on behalf of,
officers, directors, employees or consultants of Company or any Subsidiary as
determined in good faith by Company's Board of Directors or its senior
management, (iv) Investments and Restricted Junior Payments permitted hereunder,
(v) transactions between the Company and any of its Subsidiaries or between
Subsidiaries, in each case, so long as no portion of the minority interest in
such Subsidiary is owned by an Affiliate of Company (other than a wholly-owned
Subsidiary or directors or officers of such Subsidiary that hold capital stock
of such Subsidiary to the extent that local law requires a resident of such
jurisdiction to own capital stock of such Subsidiary); provided such
transactions are not otherwise prohibited hereunder and the Board of Directors
of (x) Company, in the case of a transaction between Company and any of its
non-wholly owned Subsidiaries, or (y) the applicable wholly-owned Subsidiary in
the case of a transaction between a non-wholly owned Subsidiary and such
wholly-owned Subsidiary, in each case shall determine in good faith that such
transaction is fair to Company or such wholly-owned Subsidiary, as the case may
be, or (vi) any agreement as in effect as of the Closing Date (as amended by any
amendment thereto or any transaction contemplated thereby, in each case solely
to the extent such agreement and such transactions are set forth in Schedule
7.11(vi); provided that (a) any such amended agreement thereto is not more
disadvantageous to Company or any Subsidiary, as applicable, in any material
respect than such original agreement and (b) such amendment is not materially
adverse to Lenders.
.4 Disposal of Subsidiary Equity.
Except pursuant to the Collateral Documents and except for any sale
of 100% of the capital stock or other equity Securities of any its Subsidiaries
in compliance with the provisions of subsection 7.7(i) or 7.7(viii), Company
shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify directors if
required by applicable law; or
(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital
stock or other equity Securities of
132 EXECUTION
any of its Subsidiaries (including such Subsidiary), except to Company, a
Domestic Subsidiary of Company, or to qualify directors if required by
applicable law.
.5 Conduct of Business.
A. From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other than (i) the
businesses engaged in by Company and its Subsidiaries on the Closing Date and
similar or related businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.
B. Company will not permit Acquisition Co. to engage in any activities
other than those that are necessary or advisable to effect the Merger, and to
effect the transaction contemplated by this Agreement.
.6 Amendments or Waivers of Related Agreements.
A. None of Company or any of its Subsidiaries will agree to any material
amendment to, or waive any of its material rights under, any Related Agreement
or the Consulting Agreement, as the case may be, or terminate or agree to
terminate any Related Agreement or the Consulting Agreement, as the case may be,
without in each case obtaining the prior written consent of Requisite Lenders to
such amendment, waiver or termination, other than any amendment, waiver or
termination of any Related Agreement or the Consulting Agreement, as the case
may be, which is neither material nor adverse to Lenders.
B. Company shall not, and shall not permit any of its Subsidiaries to,
amend or otherwise change the terms of any Subordinated Indebtedness, or make
any payment consistent with an amendment thereof or change thereto, if the
effect of such amendment or change is to increase the interest rate on such
Subordinated Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any event of default
or condition to an event of default with respect thereto (other than to
eliminate any such event of default or increase any grace period related
thereto), change the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty thereof), or
change any collateral therefor (other than to release such collateral), or if
the effect of such amendment or change, together with all other amendments or
changes made, is to increase materially the obligations of the obligor
thereunder or to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative on their behalf)
which would be adverse to Company or Lenders.
C. Company shall not, and shall not permit any of its Subsidiaries to,
designate any Indebtedness as "Designated Senior Debt" (as defined in the Senior
Subordinated Note Indenture) for purposes of the Senior Subordinated Note
Indenture without the prior written consent of Requisite Lenders.
D. Company shall not make any payment on the Convertible Preferred Stock
in cash which could be made by the issuance of additional shares of Convertible
Preferred Stock.
133 EXECUTION
.7 Fiscal Year.
Other than in compliance with subsection 6.11, Company shall not
change its Fiscal Year-end from October 31 of each calendar year, and, once such
change has been effected in compliance with subsection 6.11, Company shall not
change its Fiscal Year-end from December 31 of each calendar year.
.8 Consolidated Capital Software Expenditures.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Software Expenditures, in any Fiscal Year indicated
below, in an aggregate amount in excess of the corresponding amount (the
"Maximum Consolidated Capital Software Expenditures Amount") set forth below
opposite such Fiscal Year; provided that the Maximum Consolidated Capital
Software Expenditures Amount for any Fiscal Year shall be increased by an amount
equal to the excess, if any, of the Maximum Consolidated Capital Software
Expenditures Amount for the previous Fiscal Year only (prior to any adjustment
in accordance with this proviso) over the actual amount of Consolidated Capital
Software Expenditures for such previous Fiscal Year; provided, further that in
no event shall the amount of such increase exceed 50% of the Maximum
Consolidated Capital Software Expenditures Amount for such previous Fiscal Year
(prior to any adjustment in accordance with this proviso):
Fiscal Year Maximum Consolidated Capital
Software Expenditures
-----------------------------------------------------------------
Fiscal Year 2000 $6.0 million
Fiscal Year 2001 $5.0 million
Fiscal Year 2002 $4.5 million
Fiscal Year 2003 $4.0 million
Fiscal Year 2004 $4.0 million
Fiscal Year 2005 $4.0 million
Fiscal Year 2006 $4.0 million
Fiscal Year 2007 $3.0 million
.1 Margin Stock.
Notwithstanding anything to the contrary contained herein, Company and its
Subsidiaries shall not own Margin Stock with an aggregate value in excess of
$5,000,000.
134 EXECUTION
Section 2. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur:
.1 Failure to Make Payments When Due.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within five days after
the date due; or
.2 Default in Other Agreements.
(i) Failure of Company or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an aggregate principal amount of $5 million or
more beyond the end of any grace period provided therefor; or (ii) breach or
default by Company or any of its Subsidiaries with respect to any other material
term of (a) one or more items of Indebtedness or Contingent Obligations in the
aggregate principal amount referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
.3 Breach of Certain Covenants.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
.4 Breach of Warranty.
Any representation, warranty, certification or other statement made
by Company or any of its Subsidiaries in any Loan Document or in any statement
or certificate at any time given by Company or any of its Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect on the date as of which made; or
.5 Other Defaults Under Loan Documents.
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within thirty (30) days
after the earlier of (i) an officer of Company or such
135 EXECUTION
Loan Party becoming aware of such default or (ii) receipt by Company and such
Loan Party of notice from Administrative Agent or any Lender of such default; or
.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Company or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Company or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the Board of
Directors of Company or any of its Subsidiaries (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment or similar process
involving either in any individual case or in the aggregate at any time an
amount in excess of $5 million (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
136 EXECUTION
.9 Dissolution.
Any order, judgment or decree shall be entered against Company or
any of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which individually or in
the aggregate results in, or, excluding any event described in clause (x) of the
definition of ERISA Event, would reasonably be expected to result in, liability
to Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $5 million during the term of this Agreement; or there shall exist
an amount of unfunded benefit liability calculated in accordance with the
provisions of subsection 5.11D which exceeds $5 million; or
.11 Change in Control.
Any Change in Control shall occur; or
.12 Invalidity of Guaranties; Failure of Security; Repudiation of Obligations.
At any time after the execution and delivery thereof, (i) any
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or Administrative Agent shall not have or shall
cease to have a valid and perfected First Priority Lien in any Collateral
purported to be covered thereby, in each case for any reason other than the
failure of any Agent or any Lender to take any action within its control, or
(iii) any Loan Party shall contest the validity or enforceability of any Loan
Document in writing or deny in writing that it has any further liability,
including with respect to future advances by Lenders, under any Loan Document to
which it is a party;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of Administrative Agent to issue any Letter of Credit and the right
of any Lender to issue any Letter of Credit hereunder shall thereupon terminate,
and (ii) upon the occurrence and during the continuation of any other Event of
Default, Administrative Agent shall, upon the written request, or may, with the
written consent, of Requisite Lenders, by written notice to Company, declare all
or any portion of the amounts described in clauses (a) through (c)
137 EXECUTION
above to be, and the same shall forthwith become, immediately due and payable,
and the obligation of each Lender to make any Loan, the obligation of
Administrative Agent to issue any Letter of Credit and the right of any Lender
to issue any Letter of Credit hereunder shall thereupon terminate; provided that
the foregoing shall not affect in any way the obligations of Revolving Lenders
under subsection 3.3C(i) or the obligations of Revolving Lenders to purchase
participations in any unpaid Swing Line Loans as provided in subsection
2.1A(iv).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent in the Collateral
Account established pursuant to the Security Agreement and shall be applied as
provided therein.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
Section 3. THE AGENTS
.1 Appointment.
A. Appointment of Agents. DLJ is hereby appointed Administrative Agent and
Syndication Agent hereunder and under the other Loan Documents and each Lender
hereby authorizes Administrative Agent and Syndication Agent to act as its agent
in accordance with the terms of this Agreement and the other Loan Documents.
LCPI is hereby appointed Documentation Agent. Each of Administrative Agent and
Syndication Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The Documentation Agent
shall have no duties or responsibilities under this Agreement and the other Loan
Documents. The provisions of this Section 9 are solely for the benefit of each
of Agents and Lenders and Company shall have no rights as a third party
beneficiary of any of the provisions thereof. In performing its functions and
duties under this Agreement, each of Administrative Agent and Syndication Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation towards or relationship of agency or trust
with or for Company or any of its Subsidiaries.
138 EXECUTION
B. Appointment of Supplemental Collateral Agents. It is the purpose of
this Agreement and the other Loan Documents that there shall be no violation of
any law of any jurisdiction denying or restricting the right of banking
corporations or associations to transact business as agent or trustee in such
jurisdiction. It is recognized that in case of litigation under this Agreement
or any of the other Loan Documents, and in particular in case of the enforcement
of any of the Loan Documents, or in case Administrative Agent deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the rights, powers or remedies granted herein or in any of the other Loan
Documents or take any other action which may be desirable or necessary in
connection therewith, it may be necessary that Administrative Agent appoint an
additional individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional individual or
institution being referred to herein individually as a "Supplemental Collateral
Agent" and collectively as "Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such Loan Party to, execute, acknowledge and deliver any and all such
instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
.2 Powers and Duties; General Immunity.
X. Xxxxxx; Duties Specified. Each Lender irrevocably authorizes each Agent
to take such action on such Lender's behalf and to exercise such powers, rights
and remedies hereunder and under the other Loan Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified in this Agreement and the other Loan Documents. Each Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees. No
139 EXECUTION
Agent shall have, by reason of this Agreement or any of the other Loan
Documents, a fiduciary relationship in respect of any Lender; and nothing in
this Agreement or any of the other Loan Documents, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect of this Agreement or any of the other Loan Documents except as
expressly set forth herein or therein. Notwithstanding anything herein to the
contrary, Agent shall not be responsible for notifying any Federal banking
authority of its activities hereunder (including pursuant to the Bank Service
Company Act (12 U.S.C. 1867)).
B. No Responsibility for Certain Matters. No Agent shall be responsible to
any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by such Agent to Lenders or by or on behalf of
Company to such Agent or any Lender in connection with the Loan Documents and
the transactions contemplated thereby or for the financial condition or business
affairs of Company or any other Person liable for the payment of any
Obligations, nor shall such Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as to the existence
or possible existence of any Event of Default or Potential Event of Default.
Anything contained in this Agreement to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
C. Exculpatory Provisions. None of the Agents nor any of their respective
officers, directors, employees or agents shall be liable to Lenders for any
action taken or omitted by any such Agent under or in connection with any of the
Loan Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from any act or the
taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent shall have received instructions in respect thereof from
Requisite Lenders (or such other Lenders as may be required to give such
instructions under subsection 10.6) and, upon receipt of such instructions from
Requisite Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against any Agent as a result of such Agent
acting or (where so instructed) refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6).
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D. Agents Entitled to Act as Lender. The agency hereby created shall in no
way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. Any Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
.3 Representations and Warranties; No Responsibility For Appraisal of
Creditworthiness.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender 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, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share, severally agrees
to indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against such
Agent in exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its capacity as
Administrative Agent or Syndication Agent, as the case may be, in any way
relating to or arising out of this Agreement or the other Loan Documents;
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 any Agent's gross negligence or willful
misconduct. If any indemnity furnished to any Agent for any purpose shall, in
the opinion of such Agent, be insufficient or become impaired, such Agent may
call for additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
.5 Successor Agents and Swing Line Lender.
A. Successor Agents. Each Agent may resign at any time by giving 30 days'
prior written notice thereof to the other Agents, Lenders and Company, and any
Agent may be removed at any
141 EXECUTION
time with or without cause by an instrument or concurrent instruments in writing
delivered to Company and the Agents and signed by Requisite Lenders. Upon any
notice of resignation or removal of Administrative Agent, Requisite Lenders
shall have the right, upon five Business Days' notice to Company, to appoint a
successor Administrative Agent. If for any reason Requisite Lenders cannot agree
on a successor Administrative Agent, the resigning Administrative Agent shall
have the right to designate a successor Administrative Agent, after consulting
with Company. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent, and the
retiring or removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Administrative Agent, the provisions
of this Section 9 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement.
B. Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also constitute the
resignation or removal of DLJ or its successor as Swing Line Lender, and any
successor Administrative Agent appointed pursuant to subsection 9.5A shall, upon
its acceptance of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay any outstanding
Swing Line Loans made by the retiring or removed Administrative Agent in its
capacity as Swing Line Lender, (ii) upon such prepayment, the retiring or
removed Administrative Agent and Swing Line Lender shall surrender the Swing
Line Note held by it to Company for cancellation, and (iii) Company shall issue
a new Swing Line Note to the successor Administrative Agent and Swing Line
Lender substantially in the form of Exhibit IV-D annexed hereto, in the
principal amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
.6 Collateral Documents and Guaranties.
A. Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under each
Subsidiary Guaranty, and each Lender agrees to be bound by the terms of each
Collateral Document and Subsidiary Guaranty; provided that Administrative Agent
shall not (i) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any Collateral Document or
Subsidiary Guaranty or (ii) release any Collateral (except as otherwise
expressly permitted or required pursuant to the terms of this Agreement or the
applicable Collateral Document), in each case without the prior consent of
Requisite Lenders (or, if required pursuant to subsection 10.6, all Lenders);
provided further, however, that, without further written consent or
authorization from Lenders, Administrative Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or to which Requisite Lenders have otherwise consented or (b) release
any Subsidiary Guarantor from the Subsidiary Guaranty if all of the equity
Securities of such Subsidiary Guarantor are sold to any Person (other than an
Affiliate of Company) pursuant to a sale or other disposition permitted
hereunder or to which Requisite Lenders have otherwise consented. Anything
contained in any of the Loan Documents to the contrary notwithstanding, Company,
each Agent and each Lender hereby agree that (X) no
142 EXECUTION
Lender shall have any right individually to realize upon any of the Collateral
under any Collateral Document or to enforce any Subsidiary Guaranty, it being
understood and agreed that all rights and remedies under the Collateral
Documents and the Subsidiary Guaranties may be exercised solely by
Administrative Agent for the benefit of Lenders in accordance with the terms
thereof, and (Y) in the event of a foreclosure by Administrative Agent on any of
the Collateral pursuant to a public or private sale, any Agent or any Lender may
be the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Administrative Agent at such sale.
B. Each Lender hereby authorizes Administrative Agent to execute any and
all powers of attorney or other instruments on behalf of such Lender necessary
to affect the pledge of any Subsidiary's shares of capital stock under the laws
of a jurisdiction outside of the United States of America.
Section 4. MISCELLANEOUS
.1 Successors and Assigns.
A. The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that Company may not assign or otherwise transfer any
of its rights or obligations hereunder without the prior written consent of each
Lender (and any attempted assignment or transfer by Company without such consent
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto and their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Affiliates of each of the Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
B. Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender's Commitment and the Loans at the time owing to it or in the
case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Revolving Loan
Commitments (which for this purpose includes Loans outstanding thereunder) or
principal outstanding balance of the Term Loan of the assigning Lender subject
to each such assignment (determined as of the date the Assignment Agreement with
respect to such assignment is delivered to Administrative Agent) shall not be
less than $5 million, in the case of any assignment of a Revolving Loan, or $1
million, in the case of any assignment of a Term Loan, unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, Company otherwise consent (each such consent not to be unreasonably
withheld or delayed), (ii) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loan or the Commitment
assigned, except that this
143 EXECUTION
clause (ii) shall not prohibit any Lender from assigning all or a portion of its
rights and obligations among separate Commitments or Loans on a non-pro rata
basis, and (iii) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment Agreement, together with a processing and
recordation fee of $1500, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an administrative
questionnaire. Subject to acceptance and recording thereof by Administrative
Agent in the Register, from and after the effective date specified in each
Assignment Agreement, the Eligible Assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment Agreement, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment Agreement covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of
subsections 2.6, 2.7, 3.6, 10.2 and 10.3. Any assignment or transfer by a Lender
of rights or obligations under this Agreement that does not comply with this
subsection 10.1B shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance with
subsection 10.1C.
C. Any Lender may, without the consent of, or notice to, Company or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and/or obligations
under this Agreement (including all or a portion of its Commitment and/or the
Loans owing to it); provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) Company, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant agree to any amendment, modification or waiver
described in clauses (a), (b), (c), (d) or (e) of subsection 10.6A that affects
such Participant. Subject to subsection 10.1D, Company agrees that each
Participant shall be entitled to the benefits of subsections 3.6, 2.6D and 2.7
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection 10.1B. To the extent permitted by law, each
Participant also shall be entitled to the benefits of subsection 10.4 as though
it were a Lender, provided such Participant agrees to be subject to subsection
10.5 as though it were a Lender.
D. A Participant shall not be entitled to receive any greater payment
under subsection 2.7 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with Company's prior
written consent. A Participant that would be a foreign Lender if it were a
Lender shall not be entitled to the benefits of subsection 2.7 unless Company is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of Company, to comply with Section 2.7B(iii)(a) as
though it were a Lender.
144 EXECUTION
E. Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
F. Information. Each Lender may furnish any information concerning any
Loan Party in the possession of that Lender from time to time to assignees and
participants (including prospective assignees and participants), subject to
subsection 10.19.
G. Representations of Lenders. Each Lender listed on the signature pages
hereof hereby represents and warrants (i) that it is an Eligible Assignee or,
upon the approval of Administrative Agent and such other Persons, if any,
required under the definition of Eligible Assignee, will be an Eligible
Assignee; (ii) that it has experience and expertise in the making of loans such
as the Loans; and (iii) that it will make its Loans for its own account in the
ordinary course of its business and without a view to distribution of such Loans
within the meaning of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the provisions of this
subsection 10.1, the disposition of such Loans or any interests therein shall at
all times remain within its exclusive control). Each Lender that becomes a party
hereto pursuant to an Assignment Agreement will be deemed to agree that the
representations and warranties of such Lender contained in Section 2(c) of such
Assignment Agreement are incorporated herein by this reference.
.2 Expenses.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual out of pocket and
reasonable costs and expenses of preparation of the Loan Documents and any
consents, amendments, waivers or other modifications thereto; (ii) all the costs
of furnishing all opinions by counsel for Company (including any opinions
requested by Administrative Agent or Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Arranger and Administrative Agent
in connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Company; (iv) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of counsel to Administrative Agent and of counsel
providing any opinions that Administrative Agent or Requisite Lenders may
request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) all the actual out of pocket costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents employed or retained by Administrative Agent or their respective
counsel) of obtaining and reviewing any appraisals, environmental audits or
reports and any audits or reports provided for
145 EXECUTION
under subsection 4.1I, 6.9B or 6.9C; (vi) the custody or preservation of any of
the Collateral; (vii) all other actual and reasonable costs and expenses
incurred by Arranger or Administrative Agent in connection with the syndication
of the Commitments and the negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; and (viii) after the occurrence and
during the continuation of an Event of Default, all costs and expenses,
including reasonable attorneys' fees and costs of settlement, incurred by
Administrative Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Loan Party hereunder or under the other
Loan Documents by reason of such Event of Default (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Subsidiary Guaranties or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings).
.3 Indemnity.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Arranger, Agents and Lenders, and the officers,
directors, trustees, employees, agents and affiliates of Arranger, Agents and
Lenders (collectively called the "Indemnitees"), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any
and all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including without limitation the costs of any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response action necessary to remove, remediate, clean up or xxxxx any Hazardous
Materials Activity not caused solely by the gross negligence or willful
misconduct of Administrative Agent or the Lenders), expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a potential
party thereto, and any fees or expenses incurred by Indemnitees in enforcing
this indemnity), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in any manner
relating to or arising out of (i) this Agreement or the other Loan Documents or
the transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof), or any enforcement of any of the Loan Documents (including any sale
of, collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranties), (ii) the statements contained in the
commitment letter delivered by any
146 EXECUTION
Lender to Company with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuation of any Event of Default each Lender is hereby authorized
by Company at any time or from time to time, without notice to Company or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Company against and
on account of the obligations and liabilities of Company to that Lender under
this Agreement, the Letters of Credit and participations therein and the other
Loan Documents, including all claims of any nature or description arising out of
or connected with this Agreement, the Letters of Credit and participations
therein or any other Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Company hereby further grants to each Agent and each
Lender a security interest in all deposits and accounts maintained with such
Agent or such Lender as security for the Obligations.
.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "Aggregate
Amounts Due" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of
147 EXECUTION
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Company or
otherwise, those purchases shall be rescinded and the purchase prices paid for
such participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
.6 Amendments and Waivers.
A. No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any amendment, modification, termination,
waiver or consent which:
(a) extends the final scheduled maturity of any Loan or Note,
or extends the stated maturity of any Letter of Credit beyond the
Revolving Loan Commitment Termination Date, or reduces the rate or
extends the time of payment of interest or fees thereon (except in
connection with a waiver of applicability of any post-default
increase in interest rates), or reduces the principal amount thereof
(except to the extent repaid in cash), or increases the amount or
extends the expiration date of any Lender's Commitments; or
(b) releases all or substantially all of (x) the Collateral
(except as expressly provided in the Loan Documents) under all the
Collateral Documents (it being understood that an increase in the
amount of Indebtedness of the Company secured ratably by the
Collateral shall not be deemed a release of Collateral), or (y) the
Subsidiary Guarantors (except as expressly provided in the Loan
Documents) from their obligations under the Subsidiary Guaranty; or
(c) amends, modifies or waives any provision of this
subsection 10.6; or
(d) reduces the percentage specified in the definition
"Requisite Lenders" or "Requisite Class Lenders" (it being
understood that, with the consent of Requisite Lenders, additional
extensions of credit pursuant to this Agreement may be included in
the determination of Requisite Lenders on substantially the same
basis as the extensions of Term Loans and Revolving Loan Commitments
are included on the Closing Date); or
(e) consents to the assignment or transfer by Company of any
of its rights and obligations under this Agreement or any other Loan
Document;
shall be effective only if evidenced in a writing signed by or on behalf of all
Lenders (with Obligations being directly affected in the case of clause (a)
above).
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In addition, (i) no amendment, modification, termination or waiver
of any provision of any Note held by a Lender or which increases the Commitments
of any Lender over the amount thereof then in effect shall be effective without
the written concurrence of such Lender, (ii) no amendment, modification,
termination or waiver of any provision of subsection 2.1A(iv) or any other
provision of this Agreement relating to the Swing Line Lender shall be effective
without the written concurrence of Swing Line Lender, (iii) no amendment,
modification, termination or waiver of any provision of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Administrative Agent shall be effective without the
written concurrence of Administrative Agent, (iv) no amendment, modification,
termination or waiver of any provision of subsection 2.3C or subsection 2.4 that
has the effect of changing any voluntary or mandatory prepayments or Commitment
reductions or voluntary prepayment fees applicable to any Class (the "Affected
Class") in a manner that disproportionately disadvantages such Class relative to
the other Classes shall be effective without the written concurrence of
Requisite Class Lenders of the Affected Class (it being understood and agreed
that any amendment, modification, termination or waiver of any such provision
that only postpones or reduces voluntary or mandatory prepayment or Commitment
reduction upon those set forth in subsection 2.4 with respect to one Class but
not the other Classes shall be deemed to disproportionately disadvantage one
Class but not to disproportionately disadvantage such other Classes for purposes
of this clause (iv), and it being further understood that any amendment covered
by clause (v) or clause (vi) shall be deemed not to disproportionately
disadvantage any Class), (v) any increase in the Tranche A Term Loan
Commitments, Tranche B Term Loan Commitments or the Revolving Loan Commitments
(and any appropriate conforming and supplemental modifications to this
Agreement) shall require only the approval of Requisite Lenders and each Lender
increasing its Tranche A Term Loan Commitments, Tranche B Term Loan Commitments
or the Revolving Loan Commitments, as the case may be (provided that increases
pursuant to subsection 2.1A(v) do not require the consent of Requisite Lenders),
and (vi) the creation of an additional Class of commitments and loans made
thereunder (and any appropriate conforming and supplemental modifications to
this Agreement) shall require only the approval of Requisite Lenders and each
Lender providing a commitment under such additional Class.
B. If, in connection with any proposed amendment, modification,
termination or waiver of any of the provisions of this Agreement or the Notes
which requires the consent of all Lenders, the consent of Requisite Lenders is
obtained but the consent of one or more of such other Lenders whose consent is
required is not obtained, then Company shall have the right, so long as all
non-consenting Lenders whose individual consent is required are treated as
described in either clause (i) or (ii) below, to either (i) replace each such
non-consenting Lender or Lenders with one or more Replacement Lenders pursuant
to subsection 2.8 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed amendment, modification, termination
or waiver, or (ii) terminate such non-consenting Lender's Commitments and repay
in full its outstanding Loans in accordance with subsections 2.4B(i)(b) and
2.4B(ii)(b); provided that unless the Commitments that are terminated and the
Loans that are repaid pursuant to the preceding clause (ii) are immediately
replaced in full at such time through the addition of new Lenders or the
increase of the Commitments and/or outstanding Loans of existing Lenders (who in
each case must specifically consent thereto), then in the case of any action
pursuant to the preceding clause (ii), the Requisite Lenders (determined before
giving effect to the proposed action) shall specifically consent thereto;
provided further that Company shall not have the right to terminate
149 EXECUTION
such non-consenting Lender's Commitment and repay in full its outstanding Loans
pursuant to clause (ii) of this subsection 10.6B if, immediately after the
termination of such Lender's Revolving Loan Commitment in accordance with
subsection 2.4B(ii)(b), the Revolving Loan Exposure of all Lenders would exceed
the Revolving Loan Commitments of all Lenders; provided still further that
Company shall not have the right to replace a Lender solely as a result of the
exercise of such Lender's rights (and the withholding of any required consent by
such Lender) pursuant to the second paragraph of subsection 10.6A.
C. Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on Company in any case shall entitle Company to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time outstanding, each
future Lender and, if signed by Company, on Company.
.7 Independence of Covenants.
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
.8 Notices.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the
150 EXECUTION
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, the foreclosure (including by the
exercise of power of sale) of any Mortgage or any deed given in lieu of
foreclosure, and the termination of this Agreement.
.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of any Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude any other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
.11 Marshalling; Payments Set Aside.
None of Agents or Lenders shall be under any obligation to marshal
any assets in favor of Company or any other party or against or in payment of
any or all of the Obligations. To the extent that Company makes a payment or
payments to Administrative Agent or Lenders (or to Administrative Agent for the
benefit of Lenders), or any of Agents or Lenders enforce any security interests
or exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
.12 Severability.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
.13 Obligations Several; Independent Nature of Lenders' Rights.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
151 EXECUTION
.14 Headings.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
.15 Applicable Law.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
.16 [Intentionally omitted.]
.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING
152 EXECUTION
PROCEEDINGS AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver
is intended to be all-encompassing of any and all disputes that may be filed in
any court and that relate to the subject matter of this transaction, including
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
.19 Confidentiality.
Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement which has been identified as confidential
by Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates and professional advisors of such
Lender or disclosures reasonably required by (a) any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Lender of any Loans or any participations therein or (b) by any
direct or indirect contractual counterparties in swap agreements or such
contractual counterparties' professional advisors provided that such contractual
counterparty or professional advisor to such contractual counterparty agrees to
keep such information confidential to the same extent required of the
153 EXECUTION
Lenders hereunder, or disclosures required or requested by any governmental
agency or representative thereof or pursuant to legal process; provided that,
unless specifically prohibited by applicable law or court order, each Lender
shall notify Company of any request by any governmental agency or representative
thereof (other than any such request in connection with any 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 Administrative Agent or any Lender be
obligated or required to return any materials furnished by Company or any of its
Subsidiaries.
.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
154 EXECUTION
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
AUTOTOTE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Notice Address:
000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxx Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
S-1 EXECUTION
LENDERS:
DLJ CAPITAL FUNDING, INC., individually and
as Administrative Agent and Syndication
Agent
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Vice President
Notice Address:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxx
Tel.: 000-000-0000
Fax: 000-000-0000
XXXXXX COMMERCIAL PAPER INC., individually
and as Documentation Agent
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Authorized Signatory
Notice Address:
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
S-2 EXECUTION
XXXXXX BROTHERS INC., as Co-Arranger
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President
Notice Address:
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
S-3 EXECUTION
