1
EXHIBIT 10.07
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
AND PARTIAL EXCHANGE AGREEMENT
DATED AS OF APRIL 1, 2000
AMONG
FIREARMS TRAINING SYSTEMS, INC., AS PARENT,
FATS, INC., AS BORROWER,
THE LENDERS NAMED HEREIN
AND
BANK OF AMERICA, N.A., SUCCESSOR IN INTEREST TO
NATIONSBANK, N.A.,
AS AGENT
1
2
Exhibit A-1 Senior Secured Note
Exhibit A-2 Junior Secured Note
Exhibit A-3 New Revolving Credit Note
Exhibit B-1 Parent's Consent
Exhibit B-2 Borrower's Consent
Exhibit B-3 Subsidiaries Consent
Exhibit C Supplemental Agreement
Exhibit D Notice of Borrowing
Exhibit E Assignment and Acceptance
Exhibit F Intentionally omitted
Exhibit G Intercompany Note
Exhibit H Intentionally omitted
Exhibit I Intentionally omitted
Exhibit J Agency Account Agreement
Exhibit K Mortgage
Exhibit L Acknowledgement of Subordination
Exhibit M Intentionally omitted
Exhibit N Voting Agreement
7
3
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT AND PARTIAL EXCHANGE
AGREEMENT dated as of April 1, 2000, among FIREARMS TRAINING SYSTEMS, INC., a
Delaware corporation, FATS, INC., a Delaware corporation, the financial
institutions listed on the signature pages hereof and BANK OF AMERICA, N.A.,
successor in interest to NATIONSBANK, N.A., as Agent and Issuing Bank.
RECITALS:
A. The Borrower (such term, and all other capitalized terms in
these recitals, being used as hereinafter defined) requested, and the Lenders
extended credit to the Borrower pursuant to the Original Credit Agreement, in
the aggregate principal amount of up to $85,000,000, in the form of (a) Tranche
A Term Loans (as defined in the Original Credit Agreement) made by the Lenders
in an aggregate principal amount of up to $30,000,000, (b) Tranche B Term Loans
(as defined in the Original Credit Agreement) made by the Lenders in an
aggregate principal amount of up to $40,000,000, (c) Revolving Loans (as defined
in the Original Credit Agreement) made by the Lenders at any time and from time
to time during the Revolving Credit Availability Period (as defined in the
Original Credit Agreement) in an aggregate principal amount at any time
outstanding of up to $15,000,000, (d) Swingline Loans (as defined in the
Original Credit Agreement) made by the Swingline Lender (as defined in the
Original Credit Agreement) at any time and from time to time during such
Revolving Credit Availability Period in an aggregate principal amount at any
time outstanding of up to $2,000,000 and (e) Letters of Credit (as defined in
the Original Credit Agreement) (other than Foreign Currency Letters of Credit
(as defined in the Original Credit Agreement)) to be issued by the Issuing Bank
at any time and from time to time during the Letter of Credit Availability
Period (as defined in the Original Credit Agreement) in an aggregate principal
amount at any time outstanding not in excess of $7,500,000; provided that the
sum at any time of such outstanding Revolving Loans, Swingline Loans and Letters
of Credit did not exceed $15,000,000.
B. Pursuant to the Amended and Restated Credit Agreement, the
Borrower requested, and the Lenders agreed to increase their commitments to make
Revolving Loans from $15,000,000 to $25,000,000, permit Foreign Currency Letters
of Credit (as defined in the Amended and Restated Credit Agreement) to be issued
by the Issuing Bank during the Letter of Credit Availability Period (as defined
in the Amended and Restated Agreement) in an aggregate principal Dollar
Equivalent amount at any time not in excess of $10,000,000 and to make certain
other amendments and modifications to the Original Credit Agreement.
C. The Borrower has requested, and the Lenders have agreed, that
the loans outstanding under the Amended and Restated Credit Agreement be
restructured pursuant to the terms hereof, that the Lenders accept the Lender
Preferred Stock and the Lender Common Stock in satisfaction of the Existing
Revolving Loans (and accrued unpaid
8
4
interest thereunder through March 31, 2000) and in partial satisfaction of the
Tranche B Term Loans (and accrued unpaid interest on such portion through March
31, 2000), that the remainder of the Tranche B Term Loans and the Tranche A Term
Loans (and accrued unpaid interest thereon through March 31, 2000) be refinanced
hereunder, without novation, as the Senior Secured Loans and the Junior Secured
Loans, and that the Lenders make available to the Borrower additional amounts
pursuant to the terms of the New Revolving Loans, as hereinafter provided. The
Lenders are willing to make such modifications and amendments to the Amended and
Restated Credit Agreement upon the terms and subject to the conditions set forth
herein. Accordingly, the parties hereto agree that, as of the Restructure
Effective Date, this Amended Agreement will, subject to the conditions herein
provided, become effective and the Amended and Restated Credit Agreement will be
amended and restated to read in full as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Amended Agreement, the
following terms shall have the meanings specified below:
"additional amounts" shall have the meaning assigned to such term in
Section 2.20(a).
"Administrative Questionnaire" shall mean, with respect to each Lender,
the administrative questionnaire in the form submitted to such Lender by the
Agent and returned to the Agent duly completed by such Lender.
"Affiliate" shall mean, when used with respect to a specified person,
another person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the person
specified.
"Agency Agreement" shall mean the Agency Agreement dated as of January
1, 1997 between the Parent and the Borrower.
"Agency Account Agreement" shall mean an agency account agreement among
the Borrower or any Domestic Subsidiary, the Agent and a financial institution
in which the Borrower or such Domestic Subsidiary maintains a deposit account,
in substantially the form attached hereto as Exhibit J, as amended from time to
time.
"Agent" shall mean Bank of America, N.A., successor in interest to
NationsBank, N.A., in its capacity as agent for the Lenders hereunder, and its
successors in such capacity.
"Aggregate New Revolving Credit Exposure" shall mean the aggregate
amount of the Lenders' New Revolving Credit Exposure.
"Amended Agreement" shall mean this Second Amended and Restated Credit
Agreement and Partial Exchange Agreement, as amended, modified or supplemented
from time to time.
9
5
"Amended and Restated Credit Agreement" shall mean the Amended and
Restated Credit Agreement dated as of October 15, 1997, among the Borrower, the
Parent and the Lenders, as amended, modified or supplemented from time to time.
"Applicable Laws" shall have the meaning assigned to such term in
Section 3.09(b).
"Applicable Percentage" of any Lender shall mean a fraction (expressed
as a percentage), the numerator of which is such Lender's New Revolving Credit
Commitment and the denominator of which is the aggregate of all Lenders' New
Revolving Credit Commitments.
"Asset Sale" shall mean any sale, lease, transfer, assignment,
Condemnation, Casualty (in the case of Casualty, to the extent covered by
insurance) or other disposition of assets (including Intellectual Property and
other intangibles), business units, individual business assets or property of
the Parent, the Borrower or any of the Subsidiaries made after the Restructure
Effective Date, including the sale, transfer or disposition of any Capital Stock
or real property, except as expressly permitted or contemplated by this Amended
Agreement; provided, however, that none of the following shall be deemed to be
an Asset Sale: (a) the sale of inventory (other than to Subsidiaries) in the
ordinary course of business; and (b) the sale, lease, transfer, assignment or
other disposition of assets (other than in connection with any Casualty or
Condemnation) of the Borrower or any Subsidiary (i) to the Borrower or any
Wholly Owned Subsidiary which is a Domestic Subsidiary, (ii) to any Wholly Owned
Subsidiary which is a Foreign Subsidiary, so long as such transaction is
permitted by paragraph (G) of Section 6.05(a), (iii) in connection with the
liquidation for the account of the Borrower or any Subsidiary of Cash
Equivalents or (iv) to the extent that such assets consist of damaged, worn out
or obsolete tangible assets, so long as the fair market value of all property
disposed of pursuant to this clause (iv) does not exceed $50,000 in the
aggregate in any fiscal year; provided that the foregoing definition shall not
be deemed to imply that any such Asset Sale is permitted under this Amended
Agreement.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and its assignee, and accepted by the Agent, in the
form attached hereto as Exhibit E or such other form as shall be approved by the
Agent.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement dated as of January 1, 1997 among the Parent, the Borrower
and the Agent.
"Balance Sheet" shall have the meaning assigned to such term in Section
3.05.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"Borrower" shall mean FATS, Inc.
"Borrower's Consent" shall mean the Borrower's Consent and Agreement
dated as of the Restructure Effective Date among the Borrower, the Lenders, the
Centre Entities and the Agent in the form attached hereto as Exhibit B-2.
10
6
"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of North Carolina or New York) on
which banks are open for business in Charlotte, North Carolina and New York
City.
"Capital Expenditures" shall mean, for any period, the sum of (a) all
expenditures (whether paid in cash or other consideration or accrued as a
liability) which would, in accordance with GAAP, be included on a consolidated
statement of cash flows of the Parent and its Consolidated Subsidiaries for such
period as additions to property, plant and equipment, Capital Lease Obligations
or similar items and (b) to the extent not covered by clause (a) hereof, all
expenditures (whether paid in cash or other consideration or accrued as a
liability) of the Parent and its Consolidated Subsidiaries for such period to
acquire by purchase or otherwise the business, property or fixed assets of, or
stock or other evidences of beneficial ownership of, any other person (other
than the portion of such expenditures allocable in accordance with GAAP to net
current assets); provided that the foregoing shall exclude (i) all such
expenditures to the extent made with Insurance Proceeds or Condemnation Awards,
and (ii) de minimis expenditures which individually are less than $2,500 (so
long as the exclusion of such de minimis items is in accordance with GAAP).
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for the purposes of this Amended Agreement, the amount of such obligations
at any time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock" of any person shall mean any and all shares,
partnership and other interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) the
equity of such person.
"Cash Capital Expenditures" shall mean, for any period, all Capital
Expenditures paid in cash during such period.
"Cash Dividends" shall mean, for any period, the aggregate amount of
dividends paid in cash during such period.
"Cash Equivalents" shall mean:
(a) direct obligations of, or obligations the principal
of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United
States of America), in each case maturing within 180 days from the date
of acquisition thereof;
(b) investments in commercial paper maturing within 180
days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from Standard &
Poor's Corporation or from Xxxxx'x Investors Service, Inc.,
respectively;
11
7
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any Lender or any commercial bank organized under the laws of the
United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than
$500,000,000;
(d) money market funds substantially all of whose assets
are comprised of securities of the types described in (a) through (c)
above;
(e) cash deposits in any Deposit Account covered by an
Agency Account Agreement or in any cash collateral account with the
Agent required by, and maintained in accordance with, this Amended
Agreement or any Collateral Document; and
(f) other investment instruments approved in writing by
the Agent and offered by financial institutions which have a combined
capital and surplus and undivided profits of not less than
$500,000,000.
"Cash Interest Expense" shall mean, for any period, the gross amount of
interest expense of the Parent and its Consolidated Subsidiaries, determined on
a consolidated basis in accordance with GAAP, during such period, including (a)
the portion of any payments or accruals with respect to Capital Lease
Obligations that are allocable to interest expense in accordance with GAAP, and
(b) all fees, charges, discounts and other costs paid in respect of Indebtedness
during such period, but, in each case, excluding any non-cash interest expense.
"Cash Tax Expense" shall mean, for any period, the amount of expense
for Federal, state, local and other income taxes of the Parent and its
Consolidated Subsidiaries, determined on a consolidated basis in accordance with
GAAP (assuming the Parent was deemed to be the common parent of an affiliated
group (within the meaning of Section 1504 of the Code) of which only the Parent,
the Borrower and the Subsidiaries were members), for such period, but excluding
deferred income tax expense.
"Casualty" shall mean any casualty or other loss, damage or
destruction.
"Centre Class B Stock" shall mean the 1,694,569 shares of Class B
non-voting common stock of the Parent owned by the Centre Entities as of the
Restructure Effective Date.
"Centre Converted Class A Common" shall mean the 6,695,213 shares of
Class A Common of the Parent issued to the Centre Entities valued at the Class A
Common Value in exchange for the Centre Existing Preferred valued at its
liquidation preference amount effective as of the Restructure Effective Date.
"Centre Entities" shall mean Centre Capital Investors II, L.P., a
Delaware limited partnership, Centre Partners Coinvestment, L.P., a Delaware
limited partnership, Centre Capital Offshore Investors II, L.P., a Bermuda
limited partnership, and Centre Capital Tax-exempt Investors II, L.P., a
Delaware limited partnership.
12
8
"Centre Existing Preferred" shall mean the Series A Preferred Stock of
the Parent issued to certain of the Centre Entities pursuant to that certain
Securities Purchase Agreement dated November 13, 1998.
"Centre Intercreditor Agreement" shall mean that certain Intercreditor
Agreement dated as of the Restructure Effective Date among certain of the Centre
Entities and the Lenders.
"Centre Junior Secured Loans" shall mean the obligations of the Parent,
the Borrower and the other Loan Parties to the Centre Entities for reimbursement
of $964,939 of the amounts owed to the Centre Entities for their payment of
their guaranty of the Deutsche Financial Loan and evidenced by the Centre Junior
Secured Notes.
"Centre Junior Secured Notes" shall mean those certain promissory notes
made by the Borrower, dated as of April 1, 2000, payment of which is guaranteed
by the Parent and the other Loan Parties, in the principal amount of $964,939
payable to the Centre Entities and evidencing the Centre Junior Secured Loans
and having terms identical to the Junior Secured Notes and any promissory notes
made by the Borrower to pay interest on the Centre Junior Secured Loans.
"Centre Loan Agreement" means the loan agreement dated as of April 1,
2000, among certain of the Centre Entities as lenders, the Borrower and the
Parent.
"Centre New Preferred" shall mean the 897.397 shares of Series B
Preferred Stock of the Parent having terms identical to the Lender Preferred
Stock which is to be issued to the Centre Entities, pursuant to the Certificate
of Designations of Series B Preferred Stock dated August 24, 2000 and filed with
the Secretary of State of Delaware, in partial satisfaction of obligations owed
to the Centre Entities for their payment of the Deutsche Financial Loan under
their guaranty, and all Series B Preferred Stock of the Parent issued as
dividends thereon.
"Centre New Class A Common" shall mean the 1,764,452 shares of Class A
Common Stock of the Parent issued to the Centre Entities in partial satisfaction
of the obligations owed to the Centre Entities for their payment of the Deutsche
Financial Loan under their guaranty.
"Centre Senior Secured Loans" shall mean the obligations of the Parent,
the Borrower and the other Loan Parties to the Centre Entities for reimbursement
of $503,466 of the amounts owed to the Centre Entities for their payment of
their guaranty of the Deutsche Financial Loan and evidenced by the Centre Senior
Secured Notes.
"Centre Senior Secured Notes" shall mean that certain promissory notes
made by the Borrower, dated as of April 1, 2000, payment of which is guaranteed
by the Parent and the other Loan Parties, in the principal amount of $503,466
payable to Centre Entities and evidencing the Centre Senior Secured Loans and
having terms identical to the Senior Secured Notes.
"Change in Control" shall mean the occurrence of any of the following
events: (a) the Parent shall fail to own 100% of the Capital Stock of the
Borrower (on a fully diluted basis), (b) any person or "group" (within the
meaning of Rule 13d-5 under the Exchange Act), together with its Affiliates,
other than the Permitted Investors, shall beneficially own, directly or
indirectly, an amount of the outstanding Capital Stock of the Parent entitled to
25% or more of the Total Voting Power of the Parent, (c) the Permitted Investors
shall beneficially own, directly
13
9
or indirectly, an amount of the outstanding capital stock of the Parent entitled
to less than 60% of the Total Voting Power of the Parent, or (d) the failure at
any time of a majority of the seats (excluding vacant seats) on the board of
directors of the Parent to be occupied by persons who were nominated by the
affirmative vote of members of such board of directors who are officers or
Affiliates of the Permitted Investors.
"Charges" shall have the meaning assigned to such term in Section 9.09.
"Class A Common Value" shall mean the average of the trading closing
prices for the Parent's Class A Common Stock for the 20 trading days preceding
and including April 27, 2000.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Collateral" shall mean all the collateral pledged or purported to be
pledged pursuant to any of the Collateral Documents.
"Collateral Documents" shall mean the Security Agreement, the Pledge
Agreement, the Perfection Certificate, the Agency Account Agreements, the
Mortgages, the Parent's Consent, the Borrower's Consent and the Subsidiaries'
Consent and all other security agreements, financing statements and other
documents and instruments executed and delivered pursuant to the terms hereof or
thereof in order to secure any Obligations, perfect any Lien granted to the
Agent for the benefit of the Secured Parties and the Centre Entities pursuant
thereto or otherwise protect the interests of the Secured Parties and the Centre
Entities, including each agreement executed in connection with (i) the pledge of
Capital Stock of F.A.T.S. Singapore PTE LTD. and Firearms Training Systems
Netherlands B.V. and (ii) the granting of a security interest in or assignment
of (or any equivalent thereof) (A) any foreign collection account, operating
account or investment account and (B) any rights to receive payments with
respect to any Government Contract.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"Condemnation" shall mean any taking of property, or any part thereof
or interest therein, for public or quasi-public use under the power of eminent
domain, by reason of any public improvement or condemnation proceeding, or in
any other manner.
"Condemnation Award" shall mean all proceeds of any Condemnation or
transfer in lieu thereof.
"Consolidated Subsidiaries" shall mean, for any person, all
subsidiaries of such person that should be consolidated with such person for
financial reporting purposes in accordance with GAAP.
"Control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting
14
10
securities, by contract or otherwise, and "Controlling" and "Controlled" shall
have meanings correlative thereto.
"Current Assets" shall mean, as of any date, all assets which would, in
accordance with GAAP, be included on a consolidated balance sheet of the
Borrower and its Consolidated Subsidiaries as of such date as current assets.
"Current Liabilities" shall mean, as of any date, all liabilities which
would, in accordance with GAAP, be included on a consolidated balance sheet of
the Borrower and its Consolidated Subsidiaries as of such date as current
liabilities.
"Debt Issuance" shall mean the issuance after the Restructure Effective
Date of any Indebtedness by the Parent, the Borrower or any of the Subsidiaries
(other than any Indebtedness permitted by Section 6.01), provided that the
foregoing definition shall not be deemed to imply that any such issuance of
Indebtedness is permitted under this Amended Agreement.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Deposit Account" shall mean any demand, time, savings, passbook,
collection, operating, investment or other like type of account relating in any
way to the assets or business of the Borrower or any Subsidiary.
"Deutsche Financial Loan" shall mean the revolving promissory note
dated June 1, 1999 executed and delivered by Firearms Training Systems Limited,
a U.K. limited company, and Firearms Training Systems Netherlands, B.V., a
corporation organized under the laws of the Netherlands to Deutsche Financial
Services Corporation in the original principal amount of $3,000,000.
"Disqualified Stock" of any person shall mean (a) any Capital Stock of
such person which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the happening
of any event or otherwise (i) matures or is mandatorily redeemable or subject to
any mandatory repurchase requirement, pursuant to a sinking fund obligation or
otherwise, (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or (iii) is redeemable or subject to any
mandatory repurchase requirement at the option of the holder thereof, in whole
or in part, in each case on or prior to the first anniversary date of the Junior
Secured Loans Maturity Date and (b) if such person is a Subsidiary, any
Preferred Stock of such person.
"Dollar Amount" shall mean (a) with respect to dollars or an amount
denominated in dollars, such amount and (b) with respect to an amount of any
Foreign Currency or an amount denominated in such Foreign Currency, the Dollar
Equivalent of such amount on the applicable date contemplated in this Amended
Agreement.
"Dollar Equivalent" shall mean, on any date, with respect to an amount
denominated in a Foreign Currency, the amount of dollars into which the Agent
could, in accordance with its practice from time to time in the interbank
foreign exchange market, convert such amount of such Foreign Currency at its
spot selling rate of exchange effective for that date for the
15
11
immediate exchange of such currencies (inclusive of all reasonable related costs
of conversion, if any are actually incurred and based on the market rates
available to the Agent) applicable to the relevant transaction at or about 11:00
a.m., Charlotte, North Carolina time, on such date.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"EBITDA" shall mean, for any period, (a) Net Income for such period,
plus, (b) the following to the extent deducted in computing such Net Income: (i)
interest expense, (ii) tax expense, (iii) depreciation and amortization of
tangible and intangible assets and (iv) other non-cash charges or non-cash
losses, in each case for the Parent and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, minus (c) the
following to the extent added in computing such Net Income: (i) interest income
and (ii) any non-cash income or non-cash gains, in each case for the Parent and
its Consolidated Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
"Environmental Laws" shall mean any and all applicable present and
future (when implemented) treaties, laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, Release or threatened Release of any Hazardous Material or to health
and safety matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. xx.xx. 9601 et seq. (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. xx.xx. 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. xx.xx. 1251 et seq., the Clean Air Act
of 1970, as amended 42 U.S.C. xx.xx. 7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C. xx.xx. 2601 et seq., the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. xx.xx. 651 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. xx.xx. 11001 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. xx.xx. 300(f) et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. xx.xx. 5101 et seq., and
any similar or implementing state or local law, and all amendments or
regulations promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Issuance" shall mean the issuance after the Restructure
Effective Date of any Capital Stock or receipt of any capital contribution by
the Parent, the Borrower or any of the Subsidiaries not expressly permitted or
contemplated by this Amended Agreement, provided that the foregoing definition
shall not be deemed to imply that any such Equity Issuance is permitted under
this Amended Agreement.
16
12
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may be amended from time to time.
"Event of Default" shall have the meaning assigned to such term in
Article VII.
"Excess Cash Flow" shall mean, for any period, the excess of (a) the
sum, without duplication, of (i) EBITDA for such period, (ii) extraordinary cash
income, if any, business interruption insurance proceeds, if any, and cash gains
attributable to sales of assets out of the ordinary course of business, if any,
during such period to the extent that any such extraordinary cash income, such
insurance proceeds or such cash gain (A) is not included in EBITDA for such
period and (B) is not required to be utilized in connection with a payment made
(or to be made) by the Borrower pursuant to Section 2.12(e) and (iii) the
amount, if any, by which Working Capital decreased during such period over (b)
the sum, without duplication, of (i) Cash Tax Expense for such period, (ii) Cash
Interest Expense for such period, (iii) Cash Capital Expenditures for such
period, (iv) prepayments of the principal of Loans made during such period
(except pursuant to Section 2.12(f)), but only to the extent that such
prepayments by their terms cannot be reborrowed or redrawn and, in the case of
any mandatory prepayment made during such period, only to the extent that the
Net Cash Proceeds of the Prepayment Event giving rise to such prepayment are
included in EBITDA for such period, and (v) the amount, if any, by which Working
Capital increased during such period.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Taxes" shall have the meaning assigned in such term in
Section 2.20(a).
"Existing Letter of Credit Disbursement" shall mean a payment or
disbursement made by the Issuing Bank pursuant to an Existing Letter of Credit.
"Existing Letter of Credit Exposure" shall mean at any time the sum of
(a) the aggregate undrawn amount of all outstanding Existing Letters of Credit
plus (b) the aggregate amount of all Existing Letter of Credit Disbursements not
yet reimbursed by the Borrower as provided in Section 2.22 if the Borrower has
not delivered to the Agent additional Junior Secured Notes for the amount so
drawn as provided in Sections 2.03(b) and 2.22(h). The Existing Letter of Credit
Exposure of any Lender at any time shall mean its Applicable Percentage of the
aggregate Existing Letter of Credit Exposure at such time.
"Existing Letters of Credit" shall mean those certain Letters of Credit
issued under the Amended and Restated Agreement, outstanding on the Restructure
Effective Date and numbered 1704854 (in the amount of $53,845 issued for the
benefit of Banca Di Roma), 919764 (in the amount of $245,233 issued for the
benefit of xxx Xxxxxxxx xx Xxxxxxxxx), 000000 (in the amount of $410,269 and
issued for the benefit of the Republic of Singapore) and 1323 (in the amount of
$172,399 and issued for the benefit of the Arab Republic of Egypt).
"Existing Loans" shall mean the Revolving Loans, the Tranche A Term
Loans and the Tranche B Term Loans.
17
13
"Facilities" shall mean the Senior Secured Loans, the Junior Secured
Loans, the New Revolving Loans and the New Letters of Credit provided or
participated in by the Lenders to the Borrower pursuant to this Amended
Agreement and the other Loan Documents.
"FATS UK" shall mean Firearms Training Systems Limited, a United
Kingdom corporation.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by it. Each change
in the Federal Funds Effective Rate shall be effective on the date thereof,
without notice to the Borrower.
"Financial Officer" of any corporation shall mean the chief financial
officer, principal accounting officer or similar officer of such corporation.
"Financial Statements" shall have the meaning assigned to such term in
Section 3.05(a).
"Foreign Currency" shall mean any currency other than dollars that is
acceptable to the Agent in its reasonable discretion.
"Foreign Currency New Letter of Credit" shall mean any New Letter of
Credit denominated in a Foreign Currency.
"Foreign Currency New Letter of Credit Exposure" shall mean all New
Letter of Credit Exposure attributable to Foreign Currency New Letters of
Credit.
"Foreign Subsidiary" shall mean any Subsidiary which is not a Domestic
Subsidiary.
"GAAP" shall mean United States generally accepted accounting
principles, applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local or
foreign governmental department, commission, board, bureau, authority, agency,
court, instrumentality or judicial or regulatory body or entity.
"Government Contract" shall have the meaning assigned to such term in
Section 3.17(a).
"Guarantee" of or by any person shall mean any obligation, contingent
or otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase property, securities or services for the purpose
of assuring the owner of such Indebtedness of the payment of such Indebtedness
or (c) to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay
18
14
such Indebtedness; provided, however, that the term Guarantee shall not include
endorsements for collection or deposit, in either case in the ordinary course of
business.
"Guarantee Agreements" shall mean the Parent Guarantee Agreement and
the Subsidiaries Guarantee Agreement.
"Guarantor" shall mean any party to either Guarantee Agreement.
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes, hazardous or toxic substances or wastes, pollutants,
solid, liquid or gaseous wastes, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind made with or to such person, (b) all obligations of such
person evidenced by bonds, debentures, notes or similar instruments, including
certificates issued in connection with an asset securitization, (c) all
obligations of such person upon which interest charges are customarily paid, (d)
all obligations of such person under conditional sale or other title retention
agreements relating to property or assets purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services, (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such person, whether
or not the obligations secured thereby have been assumed, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease Obligations of such
person, (i) all obligations of such person in respect of interest rate
protection agreements, (j) all obligations of such person, contingent or
otherwise, as an account party in respect of letters of credit and bankers'
acceptances and (k) all obligations of such person to contribute money or other
property to any other person. The Indebtedness of any person shall include,
without duplication, the Indebtedness of any partnership in which such person is
a general partner and of any trust or other entity formed or utilized in
connection with a securitization of assets of such person. Notwithstanding the
foregoing, (i) the Indebtedness of any person shall exclude all trade accounts
payable arising in the ordinary course of business and (ii) the Indebtedness of
the Borrower shall exclude accrued expenses in accordance with GAAP.
"Indemnified Party" shall have the meaning assigned to such term in
Section 9.05(b).
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, dated as of October 1, 1997,
among the Borrower, each Subsidiary and the Agent for the Lenders.
"Insurance Proceeds" shall mean all insurance proceeds (other than
business interruption insurance proceeds), damages, awards, claims and rights of
action with respect to any Casualty.
19
15
"Intellectual Property" shall mean all patents, patent rights, patent
applications, licenses, inventions, trade secrets, know how, proprietary
techniques (including processes and substances), trademarks, servicemarks,
tradenames and copyrights.
"Intercompany Notes" shall mean the promissory notes issued as
contemplated by Section 6.04(a)(ii), in the form attached hereto as Exhibit G.
"Interest Period" shall mean (unless otherwise provided in this Amended
Agreement) (i) with respect to the New Revolving Loan, the period commencing on
the date of a borrowing or on the last day of the immediately preceding Interest
Period, as the case may be, and ending on the earlier of the next succeeding
March 31, June 30, September 30 or December 31 or the New Revolving Credit
Maturity Date and (ii) with respect to any Senior Secured Loan or Junior Secured
Loan, the period commencing on the Restructure Effective Date or on the last day
of the immediately preceding Interest Period, as the case may be, and ending on
the earlier of the next succeeding March 31, June 30, September 30 or December
31 or the Junior Secured Loans Maturity Date or the Senior Secured Loans
Maturity Date, as the case may be. Interest shall accrue from and including the
first day of an Interest Period to, but excluding, the last day of such Interest
Period.
"Issuing Bank" shall mean Bank of America, N. A., in its capacity as
issuer of the Letters of Credit, and its successors in such capacity.
"Junior Secured Loans" shall mean the term loans made by the Lenders to
the Borrower pursuant to Section 2.01(b) in an aggregate amount equal to the
Junior Secured Loans Amount.
"Junior Secured Loans Amount" shall mean $22,033,752 which is the sum
of the Remaining Balance of the Tranche A Loans and the Remaining Balance of the
Tranche B Loans.
"Junior Secured Loans Extension Fee" shall mean an amount equal to one
percent (1%) of the outstanding principal balance of the Junior Secured Loans at
the time of extension.
"Junior Secured Loans Extension Option" shall have the meaning set
forth in Section 2.12(l).
"Junior Secured Loans Maturity Date" shall mean March 31, 2003, or if
the Borrower has exercised the Junior Secured Loans Extension Option, March 31,
2004.
"Junior Secured Note" shall mean a promissory note of the Borrower,
substantially in the form of Exhibit A-2, evidencing Junior Secured Loans and
any interest paid to the Lenders on the Junior Secured Loans as provided in
Section 2.07(b).
"Landlord Waiver" shall mean each of the Landlord Waiver and Consents,
in form and substance satisfactory to the Agent made by the Landlords of the
Borrower's Georgia offices for the benefit of the Agent and the Secured Parties.
"Lender" shall mean each financial institution listed on the signature
pages of this Amended Agreement, each assignee which hereafter becomes a Lender
pursuant to Section 9.04(b), and their respective successors.
20
16
"Lender Common Stock" shall mean the 40,235,548 shares of Class A
Common Stock of the Parent issued to the Lenders pursuant to the terms hereof.
"Lender Preferred Stock" shall mean the 20,463.717 shares of Series B
Preferred Stock of the Parent issued to the Lenders pursuant to the terms hereof
and pursuant to the Certificate of Designations of Series B Preferred Stock
dated August 24, 2000 and filed with the Secretary of State of Delaware, and the
shares of Series B Preferred Stock issued as dividends thereon.
"Letter of Credit Disbursement" shall mean a payment or disbursement
made by the Issuing Bank pursuant to an Existing Letter of Credit or a New
Letter of Credit.
"Letter of Credit Fees" shall mean the fees payable to the Issuing Bank
and the Lenders pursuant to Section 2.22(g).
"Letters of Credit" shall mean any New Letters of Credit and the
Existing Letters of Credit, individually a "Letter of Credit".
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, easement, restriction, restrictive covenant, lease,
sublease, option, charge, security interest, financing statement or encumbrance
of any kind in respect of such asset and (b) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities. For purposes hereof, the Borrower or any Subsidiary shall be deemed
to own subject to a lien any asset which it has acquired or holds subject to the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement relating to such asset.
"Liquidation Value" shall mean the liquidation preference amount of the
Lender Preferred Stock.
"Loan Documents" shall mean (a) this Amended Agreement, (b) the Senior
Secured Notes, the Junior Secured Notes and the New Revolving Notes, (c) the
Letters of Credit, (d) the Guarantee Agreements, (e) the Indemnity, Subrogation
and Contribution Agreement, (f) the Intercompany Notes, (g) the Collateral
Documents, (h) any Supplemental Agreements, and (i) the Assignment and
Assumption Agreement.
"Loan Parties" shall mean the Borrower, the Subsidiaries, the Parent
and any other person which becomes a pledgor or grantor under any pledge
agreement or security agreement.
"Loans" shall mean any or all of the Senior Secured Loans, the Junior
Secured Loans, and the New Revolving Credit Loans, individually, a "Loan".
"Margin Stock" shall have the meaning assigned to such term under
Regulation U.
"Material Adverse Change" shall mean either (i) any material adverse
change in the material existing agreements and relationships, business,
financial condition or results of operations of the Borrower and the
Subsidiaries, taken as a whole, other than changes relating to the economy in
general or the defense, law enforcement or simulations industries in general and
not specifically relating to the Borrower or a Subsidiary, or (ii) any damage,
destruction, loss or
21
17
claim, whether or not covered by insurance, or condemnation or other taking that
has a Material Adverse Effect on the Borrower or the Subsidiaries.
"Material Adverse Effect" shall mean (a) a materially adverse effect on
the material existing agreements and relationships, business, financial
condition or results of operations of the Borrower and the Subsidiaries, taken
as a whole, (b) a material impairment of the ability of the Borrower and the
Subsidiaries to perform their material obligations under the Loan Documents,
taken as a whole, or (c) a material impairment of the rights of or benefits
available to the Lenders under the Loan Documents, taken as a whole. In
determining whether any individual event would result in a Material Adverse
Effect, notwithstanding that such event does not itself have such effect, a
Material Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other then existing events would result in a
Material Adverse Effect.
"Material Contracts" shall have the meaning assigned to such term in
Section 3.10(a).
"Material Intellectual Property" shall have the meaning assigned to
such term in Section 3.07(c).
"Maximum Rate" shall have the meaning assigned to such term in Section
9.09.
"Mortgage" shall mean each mortgage, assignment of rents, security
agreement and fixture filing, or deed of trust, assignment of rents and fixture
filing, or similar instrument creating and evidencing a lien on real property
and other property and rights incidental thereto, which shall be substantially
in the form of Exhibit K hereto (with such conforming changes appropriate for a
fee mortgage or a leasehold mortgage as shall be satisfactory to the Agent),
containing such schedules and including such exhibits as shall not be
inconsistent with the provisions of Section 4.01(d) of the Original Credit
Agreement or shall be necessary to conform such instrument to applicable local
law and which shall be dated the date of delivery thereof and made by the owner
of the real property described therein for the benefit of the Agent, as
mortgagee (or beneficiary), assignee and secured party for the benefit of the
Secured Parties, as the same may at any time be amended, modified or
supplemented in accordance with the terms thereof and hereof and, in each case,
for such changes therein (whether before or after the execution and delivery
thereof) as are otherwise permitted by Section 9.08.
"Mortgaged Properties" shall mean the owned real properties and
leasehold interests identified as "Mortgaged Properties" on Schedule 3.07(b) and
each other owned real property or leasehold interest required to be subjected to
a Mortgage under Section 5.12.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean: (a) with respect to any Asset Sale, (i)
the gross amount of cash proceeds (including Insurance Proceeds and Condemnation
Awards in the case of any Casualty or Condemnation unless such Insurance
Proceeds or Condemnation Awards (A) are Reinvestment Funds or (B) are to be used
for repair, restoration or replacement pursuant to plans approved by the
Required Lenders) actually paid to or actually received by the Parent, the
Borrower or any Subsidiary in respect of such Asset Sale (including cash
proceeds subsequently received at any time in respect of such Asset Sale in
respect of non-cash consideration initially
22
18
received or otherwise), less (ii) the sum of (A) the amount, if any, of all
taxes (other than income taxes) and the Borrower's good-faith best estimate of
all income taxes (to the extent that such amount shall have been set aside for
the purpose of paying such taxes when due), and customary fees, brokerage fees,
commissions, costs and other expenses (other than those payable to the Borrower,
any Subsidiary or any Affiliate of the Borrower) that are incurred in connection
with such Asset Sale and are payable by the seller or the transferor of the
assets or property to which such Asset Sale relates, but only to the extent not
already deducted in arriving at the amount referred to in clause (a)(i) above,
(B) appropriate amounts that must be set aside as a reserve in accordance with
GAAP against any liabilities associated with such Asset Sale and (C) if
applicable, the amount of Indebtedness secured by a Lien permitted under Section
6.02 that has been repaid or refinanced as required in accordance with its terms
with the proceeds of such Asset Sale; and (b) with respect to any Equity
Issuance or Debt Issuance, the gross amount of cash proceeds paid to or received
by the Parent, the Borrower or any Subsidiary in respect of such Equity Issuance
or Debt Issuance, as the case may be, net of underwriting discounts and
commissions or placement fees, investment banking fees, legal fees, consulting
fees, accounting fees and other customary fees and expenses directly incurred by
the Parent, the Borrower or any Subsidiary in connection therewith.
"Net Income" shall mean, for any period, net income (or loss) of the
Parent and its Consolidated Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from such calculation of net income (or loss) (a) the income of any
person in which any other person (other than the Parent, the Borrower or any of
the Subsidiaries) has any interest, except to the extent of the amount of
dividends or other distributions actually paid to the Parent, the Borrower or
any Wholly Owned Subsidiary by such person during such period, (b) the income
(or loss) of any person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with the Parent, the Borrower or any of the
Subsidiaries or the date such person's assets are acquired by the Parent, the
Borrower or any of the Subsidiaries, (c) the income of any Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
such 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 such Subsidiary, (d) any
after-tax gains or losses attributable to sales of assets out of the ordinary
course of business and (e) (to the extent not included in clauses (a) through
(d) above) any non-cash extraordinary gains or non-cash extraordinary losses.
"Net Worth" shall mean, as of any date, the total of all amounts which
would in accordance with GAAP be included on a consolidated balance sheet of the
Parent and its Consolidated Subsidiaries as of such date as (a) the par or
stated value of all outstanding Capital Stock of the Parent, (b) paid in capital
or capital surplus relating to such Capital Stock and (c) any retained earnings
or earned surplus less (i) any accumulated deficit and (ii) any amounts
attributable to Disqualified Stock.
"New Lending Office" shall have the meaning assigned to such term in
Section 2.20(e).
"New Letters of Credit" shall mean those certain Letters of Credit
issued after the Restructure Effective Date pursuant to Section 2.22.
23
19
"New Letter of Credit Availability Period" shall mean the period from
and including the first day of the New Revolving Credit Availability Period to
but excluding the earlier of (a) the date five Business Days prior to the New
Revolving Credit Maturity Date and (b) the termination of the New Revolving
Credit Commitments of the Lenders in accordance with the terms hereof.
"New Letter of Credit Disbursement" shall mean a payment or
disbursement made by the Issuing Bank pursuant to a New Letter of Credit.
"New Letter of Credit Exposure" shall mean at any time the sum of (a)
the aggregate undrawn amount of all outstanding New Letters of Credit plus (b)
the aggregate amount of all New Letter of Credit Disbursements not yet
reimbursed by the Borrower as provided in Section 2.22. The New Letter of Credit
Exposure of any Lender at any time shall mean its Applicable Percentage of the
aggregate New Letter of Credit Exposure at such time.
"New Revolving Credit Availability Period" shall mean that period
commencing upon the day of the expiration of one of the Existing Letters of
Credit and continuing until the New Revolving Credit Maturity Date.
"New Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make New Revolving Loans hereunder as
provided in Section 2.02 (a) hereof or in the Assignment and Acceptance pursuant
to which such Lender assumed its New Revolving Credit Commitment, as applicable,
as the same may be reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04; "New Revolving Credit
Commitments" shall mean the aggregate amount of the Lenders' New Revolving
Credit Commitments.
"New Revolving Credit Exposure" shall mean, with respect to any Lender
at any time, the aggregate principal amount at such time of all outstanding New
Revolving Loans of such Lender, plus the aggregate amount at such time of such
Lender's New Letter of Credit Exposure.
"New Revolving Credit Maturity Date" shall mean March 31, 2003.
"New Revolving Credit Notes" shall mean the promissory notes of the
Borrower dated April 1, 2000, substantially in the form of Exhibit A-3 hereto
and delivered to the Lenders pursuant to this Amended Agreement evidencing the
New Revolving Loans.
"New Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.02(a) of this Amended Agreement.
"Non-U.S. Lender" shall have the meaning assigned to such term in
Section 2.20(e).
"Notes" shall mean the Senior Secured Notes, the Junior Secured Notes
and the New Revolving Credit Notes.
"Obligations" shall mean (a) the Borrower's obligations in respect of
the due and punctual payment of principal of and interest (including interest
accruing after the filing of a petition initiating any proceeding referred to in
paragraph (g) or (h) of Article VII of this Amended Agreement) on the Loans and
all amounts drawn under the Letters of Credit when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
24
20
otherwise, (b) all fees, expenses, indemnities and expense reimbursement
obligations of the Borrower under the Original Credit Agreement, the Amended and
Restated Credit Agreement, this Amended Agreement or any other Loan Document,
(c) all other obligations, monetary or otherwise, of the Borrower or any of the
other Loan Parties under any Loan Document to which it is a party, in each case,
whether now owing or hereafter existing, and (d) for purposes of the Pledge
Agreement and the Security Agreement, any obligations in respect of the Centre
Senior Secured Loans and the Centre Junior Secured Loans and the Centre Loan
Agreement.
"Original Credit Agreement" shall mean the Credit Agreement dated as of
July 31, 1996 among the Parent, the lenders named therein and NationsBank, N.A.
(South) (now Bank of America, N.A., as Agent and Issuing Bank, as amended,
modified or supplemented from time to time.
"Other Taxes" shall have the meaning assigned to such term in Section
2.20(b).
"Parent" shall mean Firearms Training Systems, Inc.
"Parent's Consent" shall mean the Parent's Consent and Agreement dated
as of the Restructure Effective Date among the Parent, the Lenders, the Centre
Entities and the Agent in the form attached hereto as Exhibit B-1.
"Parent Guarantee Agreement" shall mean the Guarantee Agreement dated
as of January 1, 1997 between the Parent and the Agent, as amended by the
Parent's Consent and Agreement dated as of October 15, 1997 and as amended by
the Parent's Consent and as such Parent Guarantee Agreement may be further
amended from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"Perfection Certificate" shall mean a certificate from the Borrower and
the Subsidiaries dated as of the Restructure Effective Date.
"Permitted Investors" shall mean (a) the Sponsor, (b) any Affiliate of
the Sponsor, so long as such Affiliate is reasonably acceptable to the Agent;
provided, that each of the Centre Entities shall be deemed reasonably acceptable
to the Agent, (c) the Lenders or Affiliates of the Lenders, (d) Affiliates of
Bank of America, N.A. and (e) stockholders of the Parent that become
stockholders of the Parent in connection with acquisitions by the Borrower, so
long as the aggregate Total Voting Power of the Parent held by such person/or
persons, at any time, does not exceed 5% of the Total Voting Power of the
Parent.
A "person" shall mean any natural person, corporation, business trust,
joint venture, association, company, limited liability company, partnership,
government (or any agency or political subdivision thereof) or other entity.
"Personnel" shall have the meaning assigned to such term in Section
3.07(c).
"Plan" shall mean at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such
25
21
plan were terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement between the Parent
and the Agent dated as of January 1, 1997, as amended by the Parent's Consent
and Agreement dated as of October 15, 1997 and as amended by the Parent's
Consent and as such Pledge Agreement may be further amended from time to time.
"Preferred Stock", as applied to the Capital Stock of any corporation,
shall mean Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Prepayment Event" shall mean any Asset Sale, Equity Issuance or Debt
Issuance.
"Prime Rate" shall mean the rate of interest per annum adopted from
time to time by the Agent as its prime rate, as announced and in effect at its
principal office in Charlotte, North Carolina. Each change in the Prime Rate
shall be effective on the date such change is adopted, without notice to the
Borrower. The Prime Rate is a reference rate used by the Agent in determining
interest rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit to any debtor.
"Properties" shall have the meaning assigned to such term in Section
5.11(a).
"Reference Period" with respect to any date shall mean the period of
four consecutive fiscal quarters of the Borrower immediately preceding such date
or, if such date is the last day of a fiscal quarter, ending on such date.
"Register" shall have the meaning assigned to such term in Section
9.04(d).
"Registration Rights Agreement" shall mean that certain agreement among
the Parent and the Lenders dated as of April 1, 2000 providing the Lenders with
certain registration rights respecting the Lender Common Stock.
"Regulation U" shall mean Regulation U of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Regulation X" shall mean Regulation X of the Board as from time to
time in effect and all official rulings and interpretations thereunder or
thereof.
"Reinvestment Funds" shall mean, with respect to any Insurance Proceeds
from a Casualty or Condemnation Award from a Condemnation, that portion of such
proceeds as shall, according to a certificate of a Financial Officer of the
Borrower delivered to the Agent within 90 days after the occurrence of such
Casualty or Condemnation, be reinvested in the repair, restoration or
replacement of the properties and assets that were the subject of such Casualty
or Condemnation; provided that (a) the aggregate amount of such proceeds with
respect to any such event or series of related events shall not exceed
$1,000,000, (b) pending such reinvestment, the entire amount of such proceeds
shall be deposited in an account with the Agent for the benefit of
26
22
the Lenders and the Centre Entities, over which the Agent shall have sole
control and exclusive right of withdrawal (subject to the right of the Borrower
to withdraw funds for the purpose of the reinvestment described in such
certificate so long as no Default or Event of Default has occurred and is
continuing and subject to the provisions of the Intercreditor Agreement), (c)
from and after the date of delivery of such certificate, the Borrower shall
diligently proceed, in a commercially reasonable manner, to complete the repair,
restoration or replacement of the properties and assets that were the subject of
such Casualty or Condemnation as described in such certificate and (d) no Event
of Default shall have occurred and be continuing.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remaining Balance of the Tranche A Term Loans" shall mean an amount
equal to the principal and accrued unpaid interest outstanding under the Tranche
A Term Loans as of March 31, 2000, less the Senior Secured Loans Amount.
"Remaining Balance of the Tranche B Term Loans" shall mean an amount
equal to the principal balance and accrued unpaid interest outstanding on the
Tranche B Term Loans as of March 31, 2000, less the amount credited against the
Tranche B Term Loans for the issuance of the Lender Common Stock and the Lender
Preferred Stock in accordance with Section 2.01 hereof.
"Remedial Action" shall mean (a) "remedial action" as such term is
defined in CERCLA, 42 U.S.C. ss.9601(24), and (b) all other actions required by
any Governmental Authority or voluntarily undertaken to (i) cleanup, remove,
treat, xxxxx or in any other way address any Hazardous Material in the
environment; (ii) prevent the Release or threat of Release, or minimize the
further Release of any Hazardous Material so it does not migrate or endanger or
threaten to endanger public health, welfare or the environment; or (iii) perform
studies and investigations in connection with, or as a precondition to, the
actions described in clause (i) or (ii) above.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the PBGC has waived either
the 30-day notice period or the penalty for failure to give notice.
"Required Financial Statements" shall mean, with respect to any period,
the financial statements of the Borrower for such period required under Section
5.04(a) or (b) hereunder, as applicable.
"Required Lenders" shall mean, at any time, Lenders having Applicable
Percentages exceeding 50%.
"Responsible Officer" of any person shall mean and include the
president, chief executive officer, chief operating officer, any financial
officer, any vice president, the general counsel or any other senior officer of
such person (or, in the case of a partnership, of a general partner thereof).
27
23
"Restructure Effective Date" shall mean April 1, 2000.
"Revolving Credit Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make Revolving Loans pursuant to the Amended
and Restated Agreement .
"Revolving Credit Notes" shall mean the promissory notes of the
Borrower dated October 15, 1997 and delivered to the Lenders pursuant to the
Amended and Restated Agreement evidencing the Revolving Loans.
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to Section 2.02(c) of the Amended and Restated Agreement.
"SEC" shall mean the Securities and Exchange Commission or any
successor agency.
"Secured Parties" shall mean (a) the Lenders, (b) the Agent, in its
capacity as such under each Loan Document, (c) the beneficiaries of each
indemnification obligation undertaken by any of the Loan Parties under any Loan
Document, (c) for purposes of the Pledge Agreement and the Security Agreement
and any financing statements filed in connection therewith, the Centre Entities,
and (d) the successors and assigns of the foregoing.
"Security Agreement" shall mean the Pledge and Security Agreement dated
as of July 31, 1996 among the Parent, the Domestic Subsidiaries and the Agent,
and assigned to and assumed by the Borrower pursuant to the Assignment and
Assumption Agreement, as amended by the Borrower's Consent and Agreement dated
as of October 15, 1997 and the Subsidiaries' Consent and Agreement dated as of
October 15, 1997, and as amended by the Borrower's Consent and the Subsidiaries'
Consent, and as such Security Agreement may be further amended from time to
time.
"Senior Secured Loans" shall mean the term loans made by the Lenders to
the Borrower pursuant to Section 2.01(b) in an aggregate amount equal to the
Senior Secured Loans Amount.
"Senior Secured Loans Amount" shall mean $11,495,871.
"Senior Secured Loans Extension Fee" shall mean an amount equal to one
percent (1%) of the outstanding principal balance of the Senior Secured Loans at
the time of extension.
"Senior Secured Loans Extension Option" shall have the meaning set
forth in Section 2.12(l).
"Senior Secured Loans Maturity Date" shall mean March 31, 2003, or if
the Borrower has exercised the Senior Secured Loans Extension Option, March 31,
2004.
"Senior Secured Note" shall mean a promissory note of the Borrower,
substantially in the form of Exhibit A-1, evidencing Senior Secured Loans.
"Single Employer Plan" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
28
24
"Solvent" shall have the meaning assigned to such term in Section
3.19(a).
"Sponsor" shall mean Centre Partners II, LLC, a Delaware limited
liability company.
"Standby Letter of Credit" shall mean an irrevocable standby letter of
credit, whether denominated in dollars or a Foreign Currency, for the account of
the Borrower and for the benefit of any holder of obligations of the Borrower or
the Subsidiaries incurred in the ordinary course of business.
"subsidiary" shall mean, with respect to any person (referred to in
this definition as the "parent"), any corporation, partnership, association or
other business entity (a) of which Capital Stock representing more than 50% of
the aggregate ordinary voting power or more than 50% of the ownership interests
or more than 50% of the general partnership interests is, at the time any
determination is being made, owned, Controlled or held or (b) which is, at the
time any determination is made, otherwise Controlled, by (i) the parent, (ii)
one or more subsidiaries of the parent or (iii) the parent and one or more
subsidiaries of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower, including FATS
UK.
"Subsidiaries' Consent" shall mean the Subsidiaries' Consent and
Agreement dated as of the Restructure Effective Date among the Domestic
Subsidiaries, the Lenders, the Centre Entities and the Agent in the form
attached hereto as Exhibit B-3.
"Subsidiaries' Guarantee Agreement" shall mean the Guarantee Agreement
dated as of October 15, 1997 between the Subsidiaries named therein and the
Agent, as amended by the Subsidiaries' Consent and Agreement dated as of October
15, 1997, and as amended by the Subsidiaries' Consent and as such Subsidiaries'
Guarantee Agreement may be further amended from time to time.
"Supplemental Agreement" shall mean the Supplemental Agreement dated as
of October 1, 1997 among the Borrower, the Agent and FSS, Inc., the Supplemental
Agreement dated as of April 1, 1998 among the Borrower, the Agent and Dart
International, Inc., and/or (as the context may require) an agreement between a
Subsidiary and the Agent in the form attached hereto as Exhibit C, as amended
from time to time.
"Taxes" shall have the meaning assigned to such term in Section
2.20(a).
"Total Debt" shall mean, as of any date, the aggregate principal amount
of (a) all Senior Secured Loans and Junior Secured Loans as of such date, (b)
all New Revolving Loans as of such date and (c) all other Indebtedness of the
Borrower and its Consolidated Subsidiaries as of such date, determined on a
consolidated basis in accordance with GAAP.
"Total Voting Power" with respect to any person on any date shall mean
the total number of votes which may be cast in the election of directors of such
person at any meeting of stockholders of such person if all securities entitled
to vote in the election of directors of such person (on a fully diluted basis,
assuming the exercise, conversion or exchange of all rights, warrants, options
and securities exercisable for, exchangeable for or convertible into, such
voting
29
25
securities on such date or within 60 days thereafter) were present and voted at
such meeting (other than votes that may be cast only upon the happening of a
contingency).
"Trade Letter of Credit" shall mean a trade or commercial letter of
credit, whether denominated in dollars or a Foreign Currency, issued for the
account of the Borrower and for the benefit of any holder of obligations of the
Borrower or the Subsidiaries incurred in the ordinary course of business.
"Tranche A Term Loans" shall mean the term loans made by the Lenders to
the Borrower pursuant to Section 2.02(a) of the Amended and Restated Credit
Agreement.
"Tranche B Term Loans" shall mean the term loans made by the Lenders to
the Borrower pursuant to Section 2.02(b) of the Amended and Restated Credit
Agreement.
"Tranche A Term Notes" shall mean the promissory notes of the Borrower
dated October 15, 1997 evidencing the Tranche A Term Loans.
"Tranche B Term Notes" shall mean the promissory notes of the Borrower
dated October 15, 1997 evidencing the Tranche B Term Loans.
"Transferee" shall have the meaning assigned to such term in Section
2.20(a).
"Voting Agreement" shall mean the Voting and Stock Restriction
Agreement dated as of the Restructure Effective Date among the Lenders and the
Agent, substantially in the form of Exhibit N hereto, as it may be amended from
time to time.
"Wholly Owned Subsidiary" shall mean, at any time, any Subsidiary all
the Capital Stock of which is at such time directly or indirectly owned by the
Borrower.
"Working Capital" shall mean, as of any date of determination, an
amount equal to (a) Current Assets as of such date, but excluding cash and Cash
Equivalents described under clauses (a) through (f) of the definition thereof,
minus (b) Current Liabilities as of such date, but excluding (i) the current
portion of long-term Indebtedness and (ii) New Revolving Loans. Working Capital
as of any date may be a positive or negative number. Working Capital increases
when it becomes more positive or less negative and decreases when it becomes
less positive or more negative, and all such increases and decreases for any
period shall be determined in a manner consistent with that used in preparing
the Borrower's consolidated statements of cash flows for the same period in
accordance with GAAP.
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Amended Agreement unless the context shall otherwise require. Unless
otherwise expressly provided herein, all terms of an accounting or financial
nature used herein shall be interpreted in accordance with GAAP, as in effect
from time to time; provided, however, that, for purposes of
30
26
(a) making any calculation contemplated by the provisions of Article II and (b)
determining compliance with any covenant set forth in Article VI, such terms
shall be construed in accordance with GAAP as in effect on the date of this
Amended Agreement applied on a basis consistent with the application used in
preparing the Required Financial Statements.
ARTICLE II
THE EXCHANGE AND THE REMAINING DEBT
SECTION 2.01. Exchange of Debt for Equity; Restructure of Remaining
Loans. (a) The Parent agrees (i) to issue to the Lenders the Lender Common Stock
(to be issued to each of the Lenders in accordance with the allocation set forth
on Schedule 2.01(a) hereto) in exchange for a credit equal to the Class A Common
Value multiplied by the number of shares of Class A Common Stock issued and (ii)
to issue to the Lenders the Lender Preferred Stock (to be issued to each of the
Lenders in accordance with the allocation set forth on Schedule 2.01(a) hereto)
for a credit equal to the Liquidation Value, in each case to be applied against
the Existing Loans as follows: first, against the principal and interest through
March 31, 2000 outstanding on the Revolving Credit Loans and, second, against
the accrued unpaid interest outstanding on the Tranche B Term Loans, and, the
balance applied against the balance of the Tranche B Term Loans. The Lenders
agree that the Lender Common Stock and the Lender Preferred Stock shall be held
by them subject to the terms of the Voting Agreement.
(b) A portion of the Tranche A Term Loans shall be restructured
and refinanced as the Senior Secured Loans in the amount of the Senior Secured
Loans Amount. The Borrower shall issue to each of the Lenders a replacement
Senior Secured Note payable to each such Lender in the amount set forth for each
such Lender in Schedule 2.01(b) hereto. The Remaining Balance of the Tranche A
Term Loans and the Remaining Balance of the Tranche B Term Loans shall be
consolidated, restructured and refinanced by the Junior Secured Loans in the
amount of the Junior Secured Loans Amount. The Borrower shall issue to each of
the Lenders a replacement Junior Secured Note payable to each such Lender in the
amount set forth for each such Lender on Schedule 2.01 (b) hereto.
(c) The Senior Secured Loans and the Junior Secured Loans are
restructured loans and replacements of Tranche A Term Loans and the Tranche B
Term Loans, but such restructure and replacement will not constitute a novation
of the Existing Debt. The Collateral will continue to secure the Obligations
without interruption. The Borrower and the Parent agree that, effective as of
the Restructure Effective Date the Lien of the Lenders on the Collateral shall
as of and after the Restructure Effective Date secure first the New Revolving
Notes and the Senior Secured Notes of each of the Lenders on a pari passu basis
and that the Lenders' Lien on the Collateral securing the Junior Secured Notes
shall be subordinate thereto. The Lenders agree that Liens on the Collateral may
be given to the Centre Entities to secure the Centre Senior Secured Notes on a
pari passu basis with the Lenders' New Revolving Notes and Senior Secured Notes
and to secure the Centre Junior Secured Notes on a pari passu basis with the
Lenders' Junior Secured Notes and subordinate to the Liens securing the Lenders'
New Revolving Notes, the Lenders' Senior Secured Notes and the Centre Senior
Secured Notes.
31
27
(d) Amounts paid or prepaid in respect of the Senior Secured Loans
or the Junior Secured Loans may not be reborrowed.
(e) All commitments and obligations of the Lenders to make the
Revolving Loans and any obligation to issue Letters of Credit under the Amended
and Restated Credit Agreement are terminated hereby, when this Amended Agreement
becomes effective.
(f) In connection with the issuance of the Lender Common Stock,
each of the Lenders hereby represents to the Parent as follows:
Each of the Lenders is acquiring the Lender Common Stock and
the Lender Preferred Stock for investment for its own account, and not with a
view to any distribution thereof in contravention of applicable securities laws.
Each of the Lenders understands that the Lender Common Stock and the Lender
Preferred Stock have not been registered under the Securities Act of 1933 as
amended (the "Securities Act") by reason of specific exemptions therefrom which
depend upon, among other things, the bona fide nature of the investment intent
and the accuracy of each of the Lenders' representations as expressed herein.
Each of the Lenders' financial condition and investments are such that it is in
a position to hold the Lender Common Stock and the Lender Preferred Stock for an
indefinite period, bear the economic risks of the investment and to withstand
the complete loss of the investment. Each of the Lenders has extensive knowledge
and experience in financial and business matters and has the capability to
evaluate the merits and risks of the Lender Common Stock and the Lender
Preferred Stock. Each of the Lenders qualifies as an "accredited investor" as
such term is defined in Regulation D promulgated under the Securities Act. Each
of the Lenders acknowledges that the Lender Common Stock and the Lender
Preferred Stock must be held indefinitely unless subsequently registered under
the Securities Act or any applicable state securities laws or unless exemptions
from such registrations are available. Each of the Lenders is aware of the
provisions of Rule 144 promulgated under the Securities Act which permit limited
resale of securities purchased in a private placement subject to the
satisfaction of certain conditions.
SECTION 2.02. New Revolving Loans. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, to make New Revolving Loans in
dollars to the Borrower, at any time and from time to time during the New
Revolving Credit Availability Period, in an aggregate principal amount at any
one time outstanding not to exceed the excess, if any, of (i) the applicable
Dollar Amount of such Lender's New Revolving Credit Commitment set forth in
Schedule 2.02(a), at such time over (ii) the Dollar Amount of such Lender's New
Revolving Credit Exposure and Existing Letter of Credit Exposure at such time.
(b) At no time shall the aggregate amount outstanding on the New
Revolving Credit Loans exceed the aggregate Dollar Amount of the Existing
Letters of Credit that have expired without being drawn minus the aggregate
Dollar Amount of the New Letters of Credit then outstanding.
32
28
(c) The Borrower may borrow, pay or prepay and reborrow New
Revolving Loans during the New Revolving Credit Availability Period, within the
limits set forth in Section 2.02(b) and upon the other terms and subject to the
other conditions and limitations set forth herein.
SECTION 2.03. Loan Administration. (a) The failure of any Lender to
make any Loan shall not in itself relieve any other Lender of its obligation to
lend hereunder (it being understood, however, that no Lender shall be
responsible for the failure of any other Lender to make any Loan required to be
made by such other Lender).
(b) In the event of an Existing Letter of Credit Disbursement, the
Borrower shall execute and deliver to the Agent, within 3 Business Days of such
draw, for the benefit of the Lenders, a Junior Secured Note for each of the
Lenders in an amount equal to each Lenders' Applicable Percentage of the amount
drawn and dated the date of such draws. The Agent shall accept such notes in
satisfaction of the Borrower's reimbursement obligation.
(c) Subject to Section 2.03(g), each Lender shall make an advance
in the amount of its Applicable Percentage of each borrowing hereunder on the
proposed date thereof by wire transfer of immediately available funds to the
Agent in Charlotte, North Carolina, not later than 1:00 p.m., Charlotte time,
and the Agent shall by 3:00 p.m., Charlotte time, credit or wire transfer the
amounts so received to an account in the name of the Borrower, maintained with
the Agent or, if a borrowing shall not occur on such date because any condition
precedent herein specified shall not have been met, return the amounts so
received to the respective Lenders.
(d) If the Agent has not received from the Borrower the payment
required by Section 2.22(h) by 12:30 p.m., Charlotte time, one Business Day
after receipt by the Borrower of notice from the Issuing Bank that payment of a
draft presented under any Existing Letter of Credit or any New Letter of Credit
has been or will be made, as provided in Section 2.22(h), the Agent will
promptly notify the Issuing Bank and each Lender of the Letter of Credit
Disbursement and in the case of each Lender, its Applicable Percentage of the
Dollar Amount of such Letter of Credit Disbursement. Not later than 10:00 a.m.,
Charlotte time, on the next Business Day, each Lender shall make available its
Applicable Percentage of such Letter of Credit Disbursement, in Federal or other
funds immediately available in Charlotte, to the Agent at its address set forth
in Section 9.01, and the Agent will promptly make such funds available to the
Issuing Bank..
(e) Unless the Agent shall have received notice from a Lender
prior to the date of borrowing under the New Revolving Loan, or prior to the
time of any required payment by any Lender in respect of a Letter of Credit
Disbursement, that such Lender will not make available to the Agent such
Lender's portion of such borrowing or payment, the Agent may assume that such
Lender has made such portion available to the Agent on the date of such
borrowing or payment in accordance with Section 2.03 (c) or (d), as applicable,
and the Agent may, in reliance upon such assumption, make available to the
Borrower or the Issuing Bank, as the case may be, on such date a corresponding
amount. If and to the extent that such Lender shall not have made such portion
available to the Agent, such Lender and the Borrower severally agree to repay to
the Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrower or the Issuing Bank (or, if the Agent and the Issuing Bank are the same
person, from the date of such payment in respect of a Letter of Credit
Disbursement), as applicable, until the date such amount is repaid to the Agent
at
33
29
(i) in the case of the Borrower, the interest rate applicable thereto pursuant
to Section 2.07 or 2.22(h), as applicable, and (ii) in the case of such Lender,
the Federal Funds Effective Rate. If such Lender shall repay to the Agent such
corresponding amount in respect of a borrowing, such amount shall constitute
such Lender's Loan as part of such borrowing for purposes of this Amended
Agreement.
SECTION 2.04. Notice of Borrowings. The Borrower shall give the
Agent written or telecopy notice (or telephone notice promptly confirmed in
writing or by telecopy), not later than 11:00 a.m., Charlotte time on the
Business Day of a proposed borrowing. Any such notice of borrowing shall be
irrevocable, shall be substantially in the form of Exhibit D hereto, and shall
in each case refer to this Amended Agreement and specify the date of such
borrowing (which shall be a Business Day) and the amount thereof. The Agent
shall promptly advise the Lenders of any notice given pursuant to this Section
2.04 and of each Lender's portion of the requested borrowing.
SECTION 2.05. Notes; Repayment of Loans. The Senior Secured Loans
and the Junior Secured Loans of each Lender are evidenced by the Senior Secured
Notes in substantially the form of Exhibit A-1 hereto and the Junior Secured
Notes substantially in the form of Exhibit A-2 hereto, respectively, duly
executed and delivered on behalf of the Borrower, and dated as of the
Restructure Effective Date. The New Revolving Loans made by each Lender shall be
evidenced by New Revolving Credit Notes, duly executed and delivered on behalf
of the Borrower, dated as of the Restructure Effective Date, in substantially
the form attached hereto as Exhibit A-3, with the blanks appropriately filled,
payable to the order of such Lender in a principal amount equal to such Lender's
New Revolving Credit Commitment. The outstanding principal balance of each Loan,
as evidenced by the applicable Note, shall be payable on the Senior Secured
Loans Maturity Date, the Junior Secured Loans Maturity Date or the New Revolving
Credit Maturity Date, as the case may be. Each Lender shall, and is hereby
authorized by the Borrower to, endorse on the schedule attached to each Note
delivered to such Lender (or on a continuation of such schedule attached to such
Note and made a part thereof), or otherwise to record in such Lender's internal
records, an appropriate notation evidencing the date and amount of each
applicable Loan from such Lender, each payment and prepayment of principal of
any such Loan, each payment of interest on any such Loan and the other
information provided for on such schedule; provided, however, that the failure
of any Lender to make such a notation or any error therein shall not affect the
obligation of the Borrower to repay the Loans made by such Lender in accordance
with the terms of this Amended Agreement and the applicable Notes.
SECTION 2.06. The Borrower agrees to pay to the Agent for its own
account an administrative fee in an amount equal to $50,000 per year, payable
quarterly on the last day of each Interest Period. Such fee shall be in addition
to the reimbursement of the Agent's reasonable out-of-pocket expenses.
SECTION 2.07. Interest on Loans. (a) Subject to the provisions of
Section 2.08, (i)each Senior Secured Note shall bear interest for each day from
the Restructure Effective Date (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be) at a rate per
annum equal to the Prime Rate, plus one percent (1%), and (ii) each New
Revolving Note shall bear interest for each day from the date of each advance
thereunder (computed on the basis of the actual number of days elapsed over a
year of 365 or 366 days, as the case may be) at a rate per annum equal to the
Prime Rate, plus one percent (1%).
34
30
Except for the first payment of interest, which shall be due and payable in cash
on October 1, 2000, interest on the Senior Secured Loans and the New Revolving
Credit Loans for each Interest Period shall be due and payable on the fifth
Business Day after the end of such Interest Period.
(b) Subject to the provisions of Section 2.08, (i) each Junior
Secured Note delivered pursuant to Section 2.01(b) shall bear interest for each
day from the Restructure Effective Date (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be) at a
fixed rate per annum equal to ten percent (10%) and each Junior Secured Note
delivered pursuant to Section 2.01(b) or this Section 2.07(b) shall bear
interest for each day from its date (computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be) at a fixed
rate per annum equal to ten percent (10%). Interest on the Junior Secured Notes
for each Interest Period payable in kind as hereinafter provided shall be due
and payable on the fifth Business Day after the end of such Interest Period and
the Junior Secured Notes evidencing such interest shall be delivered to the
Agent for the benefit of the Lenders. Interest on the Junior Secured Notes for
each Interest Period payable in cash as hereinafter provided shall be due and
payable on the first day of the next succeeding Interest Period and shall be
paid to the Agent for the benefit of the Lenders. For any Interest Period in
which the EBITDA of the Parent, on a consolidated basis, is less than 120% of
the interest payments on the Senior Secured Notes, the Centre Senior Secured
Notes and the New Revolving Credit Notes for such Interest Period, interest on
the Junior Secured Notes shall be payable in kind by the delivery to each of the
Lenders of an additional Junior Secured Note, substantially in the form of
Exhibit A-2 hereto, dated the last day of such Interest Period and in the amount
of the interest owed to each such Lender for such Interest Period. For any
Interest Period in which the EBITDA of the Parent, on a consolidated basis, is
more than 120% of the interest payments on the Senior Secured Notes and the
Centre Senior Secured Notes and the New Revolving Credit Notes for such Interest
Period, such interest shall be payable in cash, to the extent of the Lenders'
Applicable Percentage of such excess, and the remainder, if any, shall be
payable in kind by the delivery to each of the Lenders of an additional Junior
Secured Note, substantially in the form of Exhibit A-2 hereto dated the last day
of such Interest Period and in the amount of the balance of the interest owed to
each such Lender for such Interest Period. Any interest payable on the Junior
Secured Loans in cash shall, when paid to the Agent as hereinafter provided, be
held as cash collateral by the Agent in an interest bearing account for an
additional 120 day period before being distributed to the Lenders and applied to
the Junior Secured Notes. During such 120 day period, if the EBITDA of the
Parent, on a consolidated basis, during the next succeeding Interest Period is
less than 120 % of the interest due on the Senior Secured Notes, the Centre
Senior Secured Notes and the New Revolving Notes for the next succeeding
Interest Period, the funds so held shall not, upon the written request of the
Borrower, be applied as interest on the Junior Secured Notes as provided above
but shall be used to pay interest on the Senior Secured Notes, the Centre Senior
Secured Notes and the New Revolving Notes and for Capital Expenditures permitted
hereunder, for the next succeeding Interest Period to the extent of difference
between the 120% of the EBITDA for such period and the interest due on the
Senior Secured Notes and the Centre Senior Secured Notes for such period. In the
event any funds so held are not applied to interest on the Junior Secured Notes,
the Borrower shall promptly execute additional Junior Secured Notes to the
Lenders and deliver the same to the Agent for the benefit of the Lenders in the
amount of any remaining unpaid interest on the Junior Secured Notes dated and
effective as of the original due date of such interest.
35
31
SECTION 2.08. Default Interest. If and for so long as any Event of
Default shall have occurred and be continuing, interest shall, at the option of
the Required Lenders, accrue, to the extent permitted by applicable law, on the
outstanding amount of all Obligations during the period from (and including) the
date of such Event of Default or the date such option is elected, to (but not
including) the date of actual payment (after as well as before judgment) at, (a)
in the case of principal of or interest on any Loan, the rate per annum
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be) applicable to such Loan during such period
pursuant to Section 2.07, plus two percent (2.00%) and (b) in the case of any
other amount, a rate per annum (computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be) equal to the
Prime Rate plus three percent (3.00%). The Borrower shall pay all such accrued
but unpaid interest from time to time upon demand.
SECTION 2.09. Intentionally deleted.
SECTION 2.10. Intentionally deleted.
SECTION 2.11. Intentionally deleted.
SECTION 2.12. Prepayments.
(a) Intentionally deleted.
(b) Intentionally deleted.
(c) In the event and on each occasion that the Dollar Amount of
Aggregate New Revolving Credit Exposure exceeds the aggregate Dollar Amount of
the New Revolving Credit Commitments (for any reason other than a change in the
exchange rates for Foreign Currency), the Borrower shall immediately prepay the
New Revolving Credit Loans, or, if no New Revolving Credit Loans are or would be
outstanding, provide cash collateral in respect of the New Letter of Credit
Exposure pursuant to Section 2.22(l) and thereupon such cash shall be deemed to
reduce the New Letter of Credit Exposure by an equivalent amount for purposes of
this Section 2.12(c)) in an amount equal to such excess. On the second Business
Day after the first and the fifteenth day of each calendar month and on the date
of issuance of, or participation in, any Foreign Currency New Letter of Credit,
the Borrower shall cash collateralize Foreign Currency New Letter of Credit
Exposure (in each instance, in dollars) to the extent, if necessary, so that the
Dollar Amount (determined as of the first and fifteenth day of each calendar
month) of all Aggregate New Revolving Credit Exposure is equal to or less than
the aggregate Dollar Amount of the New Revolving Credit Commitments.
(d) To the extent not previously paid, (i) all Senior Secured
Loans shall be due and payable on the Senior Secured Loans Maturity Date, (ii)
all Junior Secured Loans shall be due and payable on the Junior Secured Loans
Maturity Date, and (iii) all New Revolving Credit Loans shall be due and payable
on the New Revolving Credit Maturity Date.
(e) The Borrower shall give to the Agent and the Lenders at least
three Business Days' prior written or telecopy notice of each and every
Prepayment Event, the amount of Net Cash Proceeds expected to be received
therefrom and the expected schedule for receiving such
36
32
proceeds. On the date of receipt by the Borrower, any Subsidiary or the Parent
of Net Cash Proceeds from any Prepayment Event, the Borrower shall prepay
outstanding Loans and the Centre Senior Secured Loans and Centre Junior Secured
Loans pro-rata, if loans are paid, prepay the New Revolving Loans and/or provide
cash collateral in respect of the Letters of Credit pursuant to Section 2.22(l)
in accordance with paragraph (g) below in an aggregate principal amount equal to
100% of such Net Cash Proceeds received by the Borrower, any Subsidiary or the
Parent (subject to the final sentence of paragraph (g) below). Upon receipt of
any such Net Cash Proceeds by the Parent, the Parent shall immediately
contribute all such funds to the capital of the Borrower in order to enable the
Borrower to comply with the foregoing requirements (subject to the final
sentence of paragraph (g) below).
(f) As promptly as practicable, but in any event within 90 days
after the end of each fiscal year of the Borrower, commencing with the fiscal
year ending March 31, 2001, the Borrower shall deliver to the Agent a
certificate, in form and substance satisfactory to the Agent, executed by a
Financial Officer of the Borrower setting forth a reasonably detailed
calculation of the amount of the Excess Cash Flow of the Parent, on a
consolidated basis, for such fiscal year. Upon review and acceptance of such
certificate by the Agent, the Agent shall notify the Lenders and the Borrower of
such acceptance and the Borrower shall, within three Business Days thereafter,
prepay outstanding Loans in the amount of such Excess Class Flow in accordance
with paragraph (g) below.
(g) Mandatory prepayments under paragraphs (e) and (f) above shall
be applied, unless the Required Lenders otherwise elect, first to reduce the
then outstanding Senior Secured Notes and the Centre Senior Secured Notes,
pro-rata, and second, when the Senior Secured Notes and Centre Senior Secured
Notes are paid in full, to reduce the Junior Secured Notes and the Centre Junior
Secured Notes, pro-rata, in such order as the Agent may select (provided,
however, that such payments shall be applied pro-rata among the Lenders and the
holders of the Centre Senior Secured Notes and Centre Junior Secured Notes, as
applicable). Subject to the foregoing, in the case of the mandatory prepayments
referred to in the immediately preceding sentence, after all outstanding Senior
Secured Loans and Junior Secured Loans have been paid in full, 100% of any
remaining amount and all subsequent amounts determined under paragraph (e) or
(f) above, as applicable, shall be applied to prepay outstanding New Revolving
Credit Loans or, if no New Credit Revolving Loans are or would be outstanding,
to provide cash collateral in respect of the Letters of Credit then outstanding
pursuant to Section 2.22(l).
(h) Intentionally deleted.
(i) Intentionally deleted.
(j) Intentionally deleted.
(k) Each prepayment pursuant to this Section 2.12 shall be
accompanied by accrued interest on the principal amount paid to but excluding
the date of payment. All payments and prepayments on the Loans pursuant to this
Section 2.12 shall be without premium or penalty.
(l) The Borrower may extend the maturity of the Senior Secured
Loans (the "Senior Secured Loans Extension Option") and the Junior Secured Loans
(the "Junior Secured Loans Extension Option") pursuant to the terms of this
paragraph. The Borrower may elect such
37
33
extension so long as no Default then exists and is continuing by (i) notifying
the Agent in writing of its election to extend between 60 and 90 days prior to
the original maturity date and (ii) paying the Agent the Senior Secured Loans
Extension Fee and the Junior Secured Loans Extension Fee, to be shared with the
Lenders pro-rata based on their Applicable Percentages. To the extent unpaid,
the Borrower must elect to extend both the Senior Secured Loans and the Junior
Secured Loans at the same time.
SECTION 2.13. Optional Prepayment. The Borrower shall have the
right at any time and from time to time to prepay any Loan, in whole or in part,
upon giving prior written or telecopy notice (or telephone notice promptly
confirmed by written or telecopy notice) to the Agent, by 11:00 a.m., Charlotte
time, on the date of prepayment, provided, however, that no Senior Secured Loans
or Centre Senior Secured Loans shall be prepaid until the Junior Secured Loans
and the Centre Junior Secured Loans have been paid in full, except as otherwise
provided in Section 2.12(g). Each notice of prepayment shall specify the
prepayment date, the Loan to be prepaid and the principal amount thereof to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such Loan
by the amount stated therein on the date stated therein. All prepayments under
this Section 2.13 shall be without premium or penalty. All prepayments under
this Section 2.13 shall be accompanied by accrued interest on the principal
amount being prepaid to but excluding the date of payment.
SECTION 2.14. Reserve Requirements: Change in Circumstances. (a)
Notwithstanding any other provision of this Amended Agreement, if after the date
of this Amended Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender or
the Issuing Bank of the principal of or interest on any Loan made by such Lender
or any fees or other amounts payable hereunder (other than changes in respect of
taxes imposed on the overall net income of such Lender or the Issuing Bank by
the jurisdiction in which such Lender or the Issuing Bank has its principal
office or by any political subdivision or taxing authority therein), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank or shall impose on such Lender or the
Issuing Bank any other condition affecting this Amended Agreement or the Loans
made by such Lender or any Letter of Credit or participation therein, and the
result of any of the foregoing shall be to increase the cost to such Lender or
the Issuing Bank of making or maintaining any Loan or increase the cost to any
Lender of issuing or maintaining any Letter of Credit or purchasing or
maintaining a participation therein or to reduce the amount of any sum received
or receivable by such Lender or the Issuing Bank hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender or the
Issuing Bank to be material, then the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, upon demand such additional amount or amounts
as will compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that
the adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change after the date hereof in any
such law, rule, regulation, agreement or guideline or in the interpretation or
administration thereof by any Governmental Authority (including the
38
34
National Association of Insurance Commissioners) charged with the interpretation
or administration thereof, or compliance by any Lender (or any lending office of
such Lender) or the Issuing Bank or any Lender's or the Issuing Bank's holding
company with any request or directive regarding capital adequacy (whether or not
having the force of law) of any Governmental Authority has or would have the
effect of reducing the rate of return on such Lender's or the Issuing Bank's
capital or on the capital of such Lender's or the Issuing Bank's holding
company, if any, as a consequence of this Amended Agreement or the Loans made or
participations in Letters of Credit purchased by such Lender pursuant hereto or
the Letters of Credit issued by the Issuing Bank pursuant hereto to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such applicability, adoption,
change or compliance (taking into consideration such Lender's or the Issuing
Bank's policies and the policies of such Lender's or the Issuing Bank's holding
company with respect to capital adequacy) by an amount deemed by such Lender or
the Issuing Bank to be material, then, from time to time the Borrower shall pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth
the circumstances requiring the payment of compensation, the calculations with
respect thereto, and the amount or amounts necessary to compensate such Lender
or the Issuing Bank or its holding company, as applicable, as specified in
paragraph (a) or (b) above shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank the amount shown as due on any such certificate delivered by it
within 10 days after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation for any increased costs or reduction in amounts received
or receivable or reduction in return on capital with respect to any period
within 120 days after the end of such period shall constitute a waiver of such
Lender's or the Issuing Bank's right to demand such compensation with respect to
such period, but not with respect to any other period. The protection of this
Section 2.14 shall be available to each Lender and the Issuing Bank regardless
of any possible contention of the invalidity or inapplicability of the law,
rule, regulation, agreement, guideline or other change or condition that shall
have occurred or been imposed.
SECTION 2.15. Intentionally deleted.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender
against any loss or expense that such Lender may sustain or incur as a
consequence of any default by the Borrower in the making of any payment or
prepayment required to be made hereunder. A certificate of any Lender setting
forth any amount or amounts which such Lender is entitled to receive pursuant to
this Section 2.16 shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay each Lender the amount shown as
due on any such certificate delivered by it within 10 days after its receipt of
the same.
SECTION 2.17. Pro Rata Treatment. Each Loan, each payment or
prepayment of principal of any Loan, and each payment of interest on the Loans,
shall be allocated pro rata among the Lenders in accordance with their
Applicable Percentages. Each Lender agrees that in
39
35
computing such Lender's portion of any Loan to be made hereunder, the Agent may,
in its discretion, round each Lender's percentage allocation of such Loan to the
next higher or lower whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower, or pursuant to a secured claim under Section 506 of Title
11 of the United States Code or other security or interest arising from, or in
lieu of, such secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any other means,
obtain payment (voluntary or involuntary) in respect of any Loan or Loans as a
result of which the unpaid principal portion of its Loans shall be
proportionately less than the unpaid principal portion of the Loans of any other
Lender, it shall be deemed simultaneously to have purchased from such other
Lender at face value, and shall promptly pay to such other Lender the purchase
price for, participation in such Loans of such other Lender, so that the
aggregate unpaid principal amount of the Loans and participation in Loans held
by each Lender shall be in the same proportion to the aggregate unpaid principal
amount of all Loans then outstanding as the principal amount of its Loans prior
to such exercise of banker's lien, setoff or counterclaim or other event was to
the principal amount of all Loans outstanding prior to such exercise of banker's
lien, setoff or counterclaim or other event; provided, however, that, if any
such purchase or purchases or adjustments shall be made pursuant to this Section
2.18 and the payment giving rise thereto shall thereafter be recovered, such
purchase or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustment restored without
interest. For purposes of this Section 2.18, the New Revolving Credit Loans of
any Lender shall include such Lender's New Letter of Credit Exposure. To the
extent permitted by law, the Borrower expressly consents to the foregoing
arrangements and agrees that any Lender holding a participation in a Loan deemed
to have been so purchased may exercise any and all rights of banker's lien,
setoff or counterclaim with respect to any and all moneys owing by the Borrower
to such Lender by reason thereof as fully as if such Lender had made a Loan
directly to the Borrower in the amount of such interest.
SECTION 2.19. Payments. (a) Unless expressly provided otherwise
herein, the Borrower shall make each payment (including principal of or interest
on any Loan or any fees or other amounts, except with respect to interest on the
Junior Secured Loans as provided in this Amended Agreement) hereunder or under
any other Loan Document without setoff, defense or counterclaim and not later
than 12:00 (noon), Charlotte time, on the date when due in dollars to the Agent
at its offices at Bank of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, in immediately available funds. Any such
payment received after such time on any date shall be deemed made on the next
Business Day.
(b) Whenever any payment (including principal of or interest on
any Loan or any fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on behalf of
the Borrower or any other Loan Party hereunder and under any other Loan Document
shall be made, in accordance with Section 2.19, free and clear of and without
deduction for any and all current or
40
36
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) income taxes or branch profit
taxes imposed on the net income of the Agent, any Lender or the Issuing Bank (or
any transferee or assignee thereof, including a participation holder (any such
entity a "Transferee")) and (ii) franchise taxes imposed on the net income of
the Agent, any Lender or the Issuing Bank (or Transferee), in each case by the
jurisdiction under the laws of which the Agent, such Lender or the Issuing Bank
(or Transferee) is organized or any political subdivision thereof or the
jurisdiction in which such Lender or Transferee has its applicable lending
office (all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities, collectively or individually, being called
"Taxes", and all such excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being called "Excluded Taxes"). Subject to the
provisions of Section 2.20(f), if the Borrower or any other Loan Party shall be
required to deduct any Taxes from or in respect of any sum payable hereunder or
under any other Loan Document to the Agent, any Lender or the Issuing Bank (or
any Transferee), (A) the sum payable shall be increased by the amount (an
"additional amount") necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.20 but excluding Excluded Taxes) the Agent, such Lender or the Issuing Bank
(or Transferee), as the case may be, shall receive an amount equal to the sum it
would have received had no such deductions been made, (B) the Borrower or such
Loan Party shall make such deductions and (C) the Borrower or such Loan Party
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
(b) In addition, the Borrower agrees to pay to the relevant
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies (including mortgage recording taxes and similar fees) that arise
from any payment made hereunder or under any other Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, this
Amended Agreement or any other Loan Document ("Other Taxes").
(c) The Borrower will indemnify the Agent, each Lender and the
Issuing Bank (or Transferee) for the full amount of Taxes and Other Taxes paid
by the Agent, such Lender or the Issuing Bank (or Transferee), as the case may
be, and any liability (excluding Excluded Taxes, but including penalties,
interest and expenses (including reasonable attorney's fees and expenses))
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability and the method of
computation thereof prepared by the Agent, a Lender or the Issuing Bank (or
Transferee), or the Agent on its behalf, absent manifest error, shall be final,
conclusive and binding for all purposes. Such indemnification shall be made
within 30 days after the date the Agent, any Lender or the Issuing Bank (or
Transferee), as the case may be, makes written demand therefor and provides the
Borrower with the certificate described above.
(d) As soon as practicable after the date of any payment of Taxes
or Other Taxes by the Borrower or any other Loan Party to the relevant
Governmental Authority, the Borrower or such other Loan Party will deliver to
the Agent, at its address referred to in Section 9.01, the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
payment thereof.
41
37
(e) Each Lender (or Transferee) that is organized under the laws
of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender") shall deliver to the Borrower and the
Agent two copies of (i) either United States Internal Revenue Service Form 1001
or Form 4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S.
Federal withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", a Form W-8, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8,
a certificate representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder (within the
meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the Borrower under this Amended Agreement
and the other Loan Documents and (ii) an Internal Revenue Service Form W-8 or
W-9 entitling such Non-U.S. Lender to receive a complete exemption from United
States backup withholding tax. Such forms shall be delivered by each Non-U.S.
Lender on or before the date it becomes a party to this Amended Agreement (or,
in the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or before
the date, if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender. If a
Non-U.S. Lender who has delivered the forms referred to above on the date it
becomes a party to this Amended Agreement (or, in the case of a Transferee, on
the date that it becomes a Transferee hereunder) determines that it is unable
subsequently to submit to the Borrower any such form, or that it is required to
withdraw or cancel any such form, such Non-U.S. Lender shall promptly notify the
Borrower of such fact. Notwithstanding any other provision of this Section
2.20(e), a Non-U.S. Lender shall not be required to deliver any form pursuant to
this Section 2.20(e) that such Non-U.S. Lender is not legally able to deliver.
(f) The Borrower shall not be required to indemnify any Non-U.S.
Lender or to pay any additional amounts to any Non-U.S. Lender, in respect of
United States Federal withholding tax pursuant to paragraph (a) or (c) above to
the extent that (i) the obligation to withhold amounts with respect to United
States Federal withholding tax existed on the date such Non-U.S. Lender became a
party to this Amended Agreement (or, in the case of a Transferee that is a
participation holder, on the date such participation holder became a Transferee
hereunder) or, with respect to payments to a New Lending Office, the date such
Non-U.S. Lender designated such New Lending Office with respect to a Loan;
provided, however, that this paragraph (f) shall not apply (x) to any Transferee
or New Lending Office that becomes a Transferee or New Lending Office as a
result of an assignment, participation, transfer or designation made at the
request of the Borrower and (y) to the extent the indemnity payment or
additional amounts any Transferee, or any Lender (or Transferee), acting through
a New Lending Office, would be entitled to receive (without regard to this
paragraph (f)) do not exceed the indemnity payment or additional amounts that
the person making the assignment, participation or transfer to such Transferee,
or Lender (or Transferee) making the designation of such New Lending Office,
would have been entitled to receive in the absence of such assignment,
participation, transfer or designation or (ii) the obligation to pay such
additional amounts would not have arisen but for a failure by such Non-U.S.
Lender to comply with the provisions of paragraph (e) above.
42
38
(g) Nothing contained in this Section 2.20 shall require any
Lender or the Issuing Bank (or any Transferee) or the Agent to make available
any of its tax returns (or any other information that it deems to be
confidential or proprietary).
(h) The provisions of this Section 2.20 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Amended Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Amended Agreement or any other Loan Document, or any
investigation made by or on behalf of the Agent or any Lender.
SECTION 2.21. Assignment of Commitments Under Certain
Circumstances; Duty to Mitigate. (a) In the event (i) any Lender or the Issuing
Bank delivers a certificate requesting compensation pursuant to Section 2.14, or
(ii) the Borrower is required to pay any additional amount to any Lender or the
Issuing Bank or any Governmental Authority on account of any Lender or the
Issuing Bank pursuant to Section 2.20, the Borrower may, at its sole expense and
effort (including with respect to the processing and recordation fee referred to
in Section 9.04(b)), upon notice to such Lender or the Issuing Bank and the
Agent, require such Lender or the Issuing Bank to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all of its interests, rights and obligations under this Amended
Agreement to an assignee that shall assume such assigned obligations (which
assignee may be another Lender, if a Lender accepts such assignment), provided
that (A) such assignment shall not conflict with any law, rule or regulation or
order of any court or other Governmental Authority having jurisdiction, (B) the
Borrower shall have received the prior written consent of the Agent and the
Issuing Bank, which consent shall not unreasonably be withheld, (C) no Event of
Default shall have occurred and be continuing and (D) the Borrower or such
assignee shall have paid to the affected Lender or the Issuing Bank in
immediately available funds an amount equal to the sum of 100% of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
Letter of Credit Disbursements of such Lender or the Issuing Bank, respectively,
plus all fees and other amounts accrued for the account of such Lender or the
Issuing Bank hereunder (including any amounts under Section 2.14 and Section
2.16); provided further that if prior to any such assignment the circumstances
or event that resulted in such Lender's notice or certificate under Section 2.14
or demand for additional amounts under Section 2.20, as the case may be, shall
cease to exist or become inapplicable for any reason or if such Lender shall
waive its rights in respect of such circumstances or event under Section 2.14,
or 2.20, as the case may be, then such Lender shall not thereafter be required
to make any such assignment hereunder.
(b) If (i) any Lender or the Issuing Bank shall request
compensation under Section 2.14, or (ii) the Borrower is required to pay any
additional amount to any Lender or the Issuing Bank or any Governmental
Authority on account of any Lender or the Issuing Bank, pursuant to Section
2.20, then such Lender or the Issuing Bank shall use reasonable efforts (which
shall not require such Lender or the Issuing Bank to incur an unreimbursed loss
or unreimbursed cost or expense or otherwise take any action inconsistent with
its internal policies or legal or regulatory restrictions or suffer any
disadvantage or burden deemed by it to be significant) (A) to file any
certificate or document reasonably requested in writing by the Borrower or (B)
to assign its rights and delegate and transfer its obligations hereunder to
another of its offices, branches or affiliates, if such filing or assignment
would reduce its claims for
43
39
compensation under Section 2.14 or would reduce amounts payable pursuant to
Section 2.20, as the case may be, in the future. The Borrower hereby agrees to
pay all reasonable costs and expenses incurred by any Lender or the Issuing Bank
in connection with any such filing or assignment, delegation and transfer.
SECTION 2.22. Letters of Credit. (a) The Borrower may request the
issuance of New Letters of Credit in dollars, in form and substance reasonably
acceptable to the Agent and the Issuing Bank, for the account of the Borrower or
any Subsidiary, at any time and from time to time during the New Letter of
Credit Availability Period; provided, that any such New Letter of Credit shall
be issued only if, and each request by the Borrower for the issuance of any such
New Letter of Credit shall be deemed a representation and warranty of the
Borrower that, immediately following the issuance of such New Letter of Credit,
(i) the aggregate Dollar Amount of the New Letter of Credit Exposure shall not
exceed $827,891, and (ii) the Dollar Amount of Aggregate New Revolving Credit
Exposure shall not exceed the aggregate New Revolving Credit Commitments at such
time. For purposes hereof, the "issuance" of a New Letter of Credit includes the
amendment, renewal or extension of an Existing Letter of Credit or a New Letter
of Credit.
(b) The Borrower may request the issuance of Foreign Currency New
Letters of Credit, in form and substance reasonably acceptable to the Agent and
the Issuing Bank, for the account of the Borrower or any Subsidiary, at any time
and from time to time during the New Letter of Credit Availability Period;
provided that any Foreign Currency New Letter of Credit shall be issued only if,
and each request by the Borrower for the issuance of any Foreign Currency New
Letter of Credit shall be deemed a representation and warranty of the Borrower
that, immediately following the issuance of such Foreign Currency New Letter of
Credit, (i) the New Letter of Credit Exposure for New Letters of Credit
denominated in dollars plus the New Letter of Credit Exposure for Foreign
Currency New Letters of Credit shall not exceed $827,891, and (ii) the Dollar
Amount of the Aggregate New Revolving Credit Exposure shall not exceed the
aggregate New Revolving Credit Commitments at such time. For purposes hereof the
"issuance" of a New Letter of Credit includes the amendment, renewal or
extension of an Existing Letter of Credit or a New Letter of Credit.
(c) Each New Letter of Credit shall expire at 5:00 p.m., Charlotte
time, on the earlier of (i) the last day of the New Letter of Credit
Availability Period and (ii) (A) in the case of Standby Letters of Credit (other
than any Existing Letter of Credit), one year after the date of issuance of such
New Letter of Credit, subject to extension (including pursuant to an automatic
renewal provision in customary form), and (B) in the case of Trade Letters of
Credit (other than any Existing Letter of Credit), 180 days after the date of
issuance of such New Letter of Credit, unless, in each case, such New Letter of
Credit expires by its terms on an earlier date.
(d) Each issuance of any New Letter of Credit shall be made on at
least three Business Days' prior irrevocable written or telecopy notice (such
notice to be delivered by 10:00 a.m., Charlotte time) from the Borrower (or such
shorter notice as shall be acceptable to the Issuing Bank) to the Agent and the
Issuing Bank, specifying whether such New Letter of Credit is to be issued in
dollars or a Foreign Currency (and if to be issued in a Foreign Currency, the
applicable Foreign Currency) and whether such New Letter of Credit is a Standby
Letter of Credit or a Trade Letter of Credit, the date of issuance, the date on
which such New Letter of Credit is to expire, the amount of such New Letter of
Credit (which shall be not less than $5,000
44
40
or such lesser amount as is acceptable to the Agent), the name and address of
the beneficiary of such New Letter of Credit and such other information as may
be necessary or desirable to complete such New Letter of Credit. The Issuing
Bank will give the Agent prompt notice of the issuance and amount of such New
Letter of Credit and the expiration date of such New Letter of Credit (and the
Agent shall give prompt notice thereof to each Lender). During the New Letter of
Credit Availability Period, the Issuing Bank also will give the Agent (i) daily
notice of the amount available to be drawn under each outstanding New Letter of
Credit and (ii) a quarterly summary indicating, on a daily basis during such
quarter, the issuance of any New Letter of Credit and the amount thereof, the
expiration of any New Letter of Credit and the amount thereof and the payment on
any draft presented under any New Letter of Credit. Each Letter of Credit issued
hereunder will be subject to the Uniform Customs and Practices for Documentary
Credits, as in effect from time to time. Each Foreign Currency Letter of Credit
issued hereunder shall be subject to and incorporate the Uniform Customs and
Practice for Documentary Credits, 1993 Revision, International Chamber of
Commerce Publication No. 500 (the "UCP") other than Articles 41 and 43 thereof;
to the extent not inconsistent with the UCP, Article 5 of the Uniform Commercial
Code as adopted in New York ("Article 5"); and Section 5-102(a)(10) of the 1995
Official Text with comments of the Uniform Commercial Code Revised Article 5, as
promulgated by the American Law Institute and National Conference of
Commissioners on Uniform State Laws ("Revised Article 5"), which section of
Revised Article 5 shall govern and control over any inconsistent provision of
the UCP or Article 5.
(e) By the issuance of a Letter of Credit (including an Existing
Letter of Credit) and without any further action on the part of the Issuing
Bank, the Agent or the Lenders in respect thereof, the Issuing Bank hereby
grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit, effective upon the issuance of such Letter of Credit.
(f) Each Lender acknowledges and agrees that its obligation to
acquire participations pursuant to Section 2.22(e) in respect of Letters of
Credit (including Existing Letters of Credit) is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or Event of Default, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(g) The Borrower shall pay to the Agent, for the account of the
Lenders, a nonrefundable fronting fee with respect to each Trade Letter of
Credit (including Existing Letters of Credit) issued for the account of the
Borrower or any Subsidiary in an amount equal to the Dollar Amount of the face
amount of such Trade Letter of Credit, multiplied by a percentage per annum
(based on a 360-day year and the number of days such Letter of Credit is
scheduled to be outstanding) equal to 0.25%. Such fee shall be payable to the
Lenders to be shared ratably among them in accordance with their respective
Applicable Percentages. Such fronting fee shall be payable in advance on the
date of issuance of each Trade Letter of Credit. In addition, the Borrower shall
pay to the Agent, for the account of the Lenders, a nonrefundable letter of
credit commission with respect to each Standby Letter of Credit (including
Existing Letters of Credit) issued for the account of the Borrower or any
Subsidiary, computed for the preceding calendar quarter in an amount equal to
the average daily aggregate Dollar Amount of all Standby Letters of Credit
during such period, multiplied by a percentage per annum (based on a 360-day
year for
45
41
the actual days elapsed) equal to 0.25%. Such fee shall be payable to the
Lenders to be shared ratably among them in accordance with their respective
Applicable Percentages. Such commissions with respect to the Standby Letters of
Credit shall be payable quarterly in arrears on the last day of March, June,
September and December in each year, and on the date on which the New Revolving
Credit Commitments shall terminate as provided herein. Such fees shall accrue
from and including the Restructure Effective Date to but excluding the last day
of the New Letter of Credit Availability Period. In addition to the foregoing
fees and commissions, the Borrower shall pay or reimburse the Issuing Bank for
such normal and customary costs and expenses, including, without limitation,
administrative, issuance, amendment, payment and negotiation charges, as are
incurred or charged by the Issuing Bank in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit (including any Letter
of Credit issued for the account of a Subsidiary).
(h) The Borrower hereby agrees to reimburse the Issuing Bank for
any Existing Letter of Credit Disbursements and New Letter of Credit
Disbursements made by the Issuing Bank by, with respect to an Existing Letter of
Credit, executing and delivering to the Agent for the benefit of the Lenders
additional Junior Secured Notes dated the date of such disbursement in the
amount of each Lender's Applicable Percentage of such disbursement and, in the
case of New Letters of Credit, making payment in immediately available funds to
the Agent within one Business Day after receipt of notice of such payment or
disbursement, in an amount equal to the Dollar Amount of such payment or
disbursement, plus interest on the amount so paid or disbursed by the Issuing
Bank at the Prime Rate plus 2.00%. The Agent shall promptly pay any such amounts
received by it to the Issuing Bank. Borrower hereby agrees to indemnify and hold
harmless the Agent, the Issuing Bank, and each Lender (in any capacity
hereunder) from and against any and all loss, liability, cost, and expense
arising at any time or times from the exchange of one or more currencies for one
or more other currencies hereunder.
(i) The Borrower's obligation to reimburse Letter of Credit
Disbursements as provided in Section 2.22(h) shall be absolute, unconditional
and irrevocable and shall be performed strictly in accordance with the terms of
this Amended Agreement under any and all circumstances whatsoever, and
irrespective of:
(i) any lack of validity or enforceability of any Letter
of Credit (including any Existing Letter of Credit) or any other Loan
Document or any term or provision therein;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower, any Subsidiary or any other person may at any
time have against the beneficiary under any Letter of Credit (including
any Existing Letter of Credit), the Issuing Bank, the Agent, any Lender
or any other person, whether in connection with this Amended Agreement,
any other Loan Document or any other related or unrelated agreement or
transaction;
(iii) any draft or other document presented under a Letter
of Credit (including any Existing Letter of Credit) proving to be
forged, fraudulent, invalid or insufficient in any respect or failing
to comply with the Uniform Customs and Practices for Documentary
Credits, as in effect from time to time, or any statement therein being
untrue or inaccurate in any respect;
46
42
(iv) payment by the Issuing Bank under a Letter of Credit
(including any Existing Letter of Credit) against presentation of a
draft or other document which does not comply with the terms of such
Letter of Credit, subject to the provisions of Section 2.22(j);
(v) any amendment, waiver or consent in respect of this
Amended Agreement or any other Loan Document; and
(vi) any other act or omission or delay of any kind or any
other circumstance or event whatsoever, whether or not similar to any
of the foregoing and whether or not foreseeable, that might, but for
the provisions of this Section 2.22(i), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
(j) Without limiting the generality of the provisions of the
foregoing paragraph (i), it is expressly understood and agreed that the absolute
and unconditional obligation of the Borrower hereunder to reimburse Letter of
Credit Disbursements will not be excused by the gross negligence or willful
misconduct of the Issuing Bank. However, the preceding sentence and the
provisions of Section 2.22(i) shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages (as opposed
to consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's bad faith, gross negligence or willful
misconduct in determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof; it is understood that the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (including any Existing Letter of Credit) (i) the Issuing Bank's
exclusive reliance in good faith on the documents presented to it under such
Letter of Credit as to any and all matters set forth therein, including reliance
on the amount of any draft presented under such Letter of Credit, if such
document on its face appears to be in order, and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever and (ii) any noncompliance in any immaterial
respect of the documents presented under such Letter of Credit with the terms
thereof shall, in each case, be deemed not to constitute bad faith, gross
negligence or willful misconduct of the Issuing Bank.
(k) The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit. The Issuing Bank shall as promptly as possible give
telephonic notification, confirmed by telex or telecopy, to the Agent and the
Borrower of such demand for payment and whether the Issuing Bank has made or
will make a Letter of Credit Disbursement thereunder; provided that the failure
to give such notice shall not relieve the Borrower of its obligation to
reimburse any such Letter of Credit Disbursement in accordance with this Section
2.22. The Agent shall promptly give each Lender notice thereof.
(l) In the event that the Borrower is required pursuant to the
terms of this Amended Agreement (including any such requirement as a result of
an Event of Default) or any other Loan Document to provide cash collateral in
respect of the Letters of Credit, the Borrower shall deposit in an account with
the Agent, for the benefit of each Lender, an amount in cash equal to
47
43
the Dollar Amount of the aggregate undrawn amount of all outstanding Letters of
Credit plus unreimbursed Letter of Credit Disbursements (or such lesser Dollar
Amount as shall be required hereunder or thereunder). Such deposit shall be held
by the Agent as collateral for the payment and performance of the Obligations to
the Lenders. The Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits in Cash Equivalents, which investments shall
be made as directed by the Borrower (unless such investments shall be contrary
to applicable law or regulation or a Default or Event of Default shall have
occurred and be continuing, in which case the Agent shall determine in its sole
discretion the Cash Equivalents to be selected), such deposits shall not bear
interest. Interest or profits, if any, on such investments shall accumulate in
such account. Moneys in such account shall automatically be applied by the Agent
to reimburse the Issuing Bank for Letter of Credit Disbursements and, if the
maturity of the Loans has been accelerated, to satisfy the Obligations to the
Lenders. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business
Days after all Events of Default have been cured or waived. If the Borrower is
required to provide an amount of cash collateral hereunder pursuant to Section
2.12(c), such amount (to the extent not applied as aforesaid) shall be returned
to the Borrower upon demand; provided that, after giving effect to such return,
(i) the sum of the Dollar Amount of all New Letter of Credit Exposure plus the
aggregate outstanding principal amount of New Revolving Loans would not exceed
the aggregate New Revolving Credit Commitments and (ii) no Default or Event of
Default shall have occurred and be continuing.
(m) The parties hereto agree that each Existing Letter of Credit
will be treated as if it had been originally issued under this Amended
Agreement. Specifically, and without limitation of the foregoing or the other
provisions of this Section 2.22, (i) the amount of each Existing Letter of
Credit shall count towards the limits set forth in Sections 2.22(a) and 2.22(b)
and in Sections 2.02(c) and (d), (ii) each Lender hereby retains a participation
in each Existing Letter of Credit equal to such Lender's pro rata portion, as
determined under Section 2.17, of the aggregate amount available to be drawn
under such Existing Letter of Credit, (iii) each Lender hereby absolutely and
unconditionally agrees to pay to the Agent, on behalf of the Issuing Bank, in
accordance with Section 2.03(d), such Lender's pro rata portion, as determined
under Section 2.17, of each Existing Letter of Credit Disbursement made by the
Issuing Bank and not reimbursed by the Borrower when due in accordance with
Section 2.22(h) and (iv) the Issuing Bank shall have the benefit of all
agreements, covenants and indemnities set forth herein which are for the benefit
of the "Issuing Bank," insofar as such term is used in relation to the Existing
Letters of Credit, and shall comply with all agreements and obligations set
forth herein which bind the "Issuing Bank", insofar as such term is used in
relation to the Existing Letters of Credit.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower and the Parent, jointly and severally, represent and
warrant to each of the Lenders that:
48
44
SECTION 3.01. Organization; Powers. Each of the Borrower and the
other Loan Parties (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has all requisite
power and authority to own its property and assets and to carry on its business
as now conducted and as proposed to be conducted, (c) is qualified to do
business in every jurisdiction where such qualification is required, except
where the failure so to qualify would not result in a Material Adverse Effect,
and (d) has the requisite power and authority to execute, deliver and perform
its obligations under each of the Loan Documents and each other agreement or
instrument contemplated thereby to which it is or will be a party, and, in the
case of the Borrower, to obtain extensions of credit hereunder. The Borrower is
a corporation organized under the laws of the State of Delaware.
SECTION 3.02. Authorization. The execution, delivery and
performance by each of the Borrower and the other Loan Parties of each of the
Loan Documents to which it is or will be a party (including the exercise of
remedies thereunder) and, in the case of the Borrower, the extensions of credit
hereunder (a) have been duly authorized by all requisite corporate or
partnership and, if required, stockholder action and (b) will not (i) violate,
(A) any provision of law, statute, rule or regulation, (B) any provision of the
certificate of incorporation, partnership agreement, operating agreement or
other constitutive documents or by-laws of the Borrower and the other Loan
Parties, (C) any order of any Governmental Authority or (D) except as set forth
in Schedule 3.17(a), any provision of any indenture, agreement or other
instrument to which the Borrower or any of the Loan Parties is a party or by
which any of them or any of their property is or may be bound, (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default or give rise to increased, additional,
accelerated or guaranteed rights of any person under any such indenture,
agreement or other instrument or (iii) except for the Lien of the Collateral
Documents, result in the creation or imposition of any Lien upon or with respect
to any property or assets now owned or hereafter acquired by the Borrower or any
of the other Loan Parties.
SECTION 3.03. Enforceability. This Amended Agreement has been duly
executed and delivered by the Borrower and the Parent and constitutes, and each
other Loan Document when executed and delivered by the Borrower or any of the
other Loan Parties will constitute, a legal, valid and binding obligation of
such party enforceable against such party in accordance with its terms, subject
to the effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance, voidable preference or similar laws and the
application of equitable principles generally.
SECTION 3.04. Consents and Governmental Approvals. No action,
consent or approval of, registration or filing with or any other action by (a)
any Governmental Authority, (b) any creditor or shareholder of the Borrower or
any creditor, shareholder, partner or member of the other Loan Parties or (c)
except where failure to take or obtain such action, consent or approval of,
registration or filing with or such other action could not reasonably be
expected to have a Material Adverse Effect, any other person is or will be
required in connection with the Facilities or the performance by the Borrower or
any of the other Loan Parties of the Loan Documents to which it is or will be a
party, in each case except such as have been made or obtained and are in full
force and effect.
SECTION 3.05. Financial Statements; Undisclosed Liabilities. (a)
The Borrower has heretofore furnished to the Lenders the audited consolidated
balance sheets of the Parent and
49
45
the Borrower (the "Balance Sheet", whether one or more), as of March 31, 2000
and the related consolidated statements of income and cash flows of the Parent
and the Borrower (together with the Balance Sheet, the "Financial Statements"),
for the year ended March 31, 2000. The Financial Statements have been prepared
in conformity with generally accepted accounting principles consistently applied
and on that basis fairly present the consolidated financial condition, results
of operations and cash flows of the Parent, the Borrower and the Subsidiaries,
as of the respective dates thereof and for the respective periods indicated.
(b) As of the Restructure Effective Date, none of the Parent, the
Borrower or the Subsidiaries have (i) any liability, contingent or otherwise, in
excess of $100,000 or (ii) any material liabilities, contingent or otherwise, or
material obligations required by GAAP to be set forth on a consolidated balance
sheet of the Borrower, except for items set forth in Schedule 3.05(b).
SECTION 3.06. No Material Adverse Change. Since the date of the
Balance Sheet, there has not been any Material Adverse Change. Except as set
forth in Schedule 3.06, since the date of the Balance Sheet and prior to the
Restructure Effective Date, the business of the Borrower and the Subsidiaries
has been conducted in the ordinary course and in substantially the same manner
as previously conducted.
SECTION 3.07. Title to Properties; Possession Under Leases;
Intellectual Property. (a) Each of the Borrower, the Subsidiaries and the Parent
has good and marketable title to, or valid leasehold interests in, all its
material properties and assets (including all Intellectual Property of the
Borrower and the Subsidiaries), except for defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties and assets for their intended purposes and do not
materially detract from the value of such properties and assets. All such
material properties and assets are free and clear of Liens, other than Liens
permitted by Section 6.02.
(b) Schedule 3.07(b) sets forth, as of the Restructure Effective
Date, a true, complete and correct list of (i) all real property owned by the
Borrower and the Subsidiaries; (ii) all real property leased by the Borrower or
any Subsidiary; and (iii) the location of each such parcel of real property.
(c) Except as set forth in Schedule 3.07(c) and except for
agreements relating to shrink-wrapped computer software licensed to the Borrower
in the ordinary course of business, the Borrower or one of the Subsidiaries
owns, and the Borrower and the Subsidiaries have the perpetual, royalty-free
right, free and clear of any consensual Liens, to use, execute, reproduce,
display, perform, modify, enhance, distribute, prepare derivative works of and
sublicense, without payment to any other person, all the material Intellectual
Property necessary or desirable to the conduct of the business of the Borrower
and the Subsidiaries (the "Material Intellectual Property"). Except for
non-exclusive rights as customarily provided to its customers in the ordinary
course of business and except for the U.S. Government Department of Defense's
"limited rights" in technical data and "restricted rights" in computer software,
neither the Borrower nor any of the Subsidiaries has granted any options,
licenses or agreements of any kind relating to Material Intellectual Property,
except as set forth on Schedule 3.07(c). No claims are pending, and to the
knowledge of the Borrower, none have been asserted, as of the date of this
Amended Agreement against the Borrower or any Subsidiary by any person with
respect to the
50
46
ownership, validity, enforceability, effectiveness or use of any Material
Intellectual Property. Except as described in Schedule 3.07(c), to the
Borrower's knowledge, no claims of infringement of any copyright, trademark,
service xxxx, trade name, patent, patent right, trade secret or other property
right of any other person are pending, and none have been asserted, as of the
date of this Amended Agreement as against any Material Intellectual Property.
Except as disclosed on Schedule 3.07(c), (i) neither the Borrower nor any of the
Subsidiaries is in breach of any material provision of any license, sublicense,
or other agreement which relates to any of the Material Intellectual Property,
and (ii) neither the Borrower nor any of the Subsidiaries has taken any action
which would impair or otherwise adversely affect its rights in any of the
Material Intellectual Property. All such Intellectual Property is valid and
enforceable, except that, with respect to the applications to register any
unregistered Intellectual Property (but not with respect to the underlying
Intellectual Property rights that are the subject of such applications), the
Borrower only represents and warrants that such applications are pending and in
good standing all without challenge of any kind. The Material Intellectual
Property has been maintained in confidence in accordance with protection
procedures customarily used to protect rights of like importance. To the
knowledge of the Borrower, all former and current members of management and key
personnel of the Parent, the Borrower or any of the Subsidiaries, including all
former and current employees, agents, consultants and independent contractors
who have contributed to or participated in the conception and development of
software or other Material Intellectual Property for the XXXX XX, FX, III, L.E.
and IV (collectively, "Personnel"), have executed and delivered to the Borrower
or such Subsidiary a proprietary information agreement restricting such person's
right to disclose proprietary information of the Borrower, the Subsidiaries and
their respective clients. No such representation is made with respect to XXXX X.
All former and current Personnel, as referenced above, either (A) have been
party to a "work-for-hire" arrangement or agreement with the Borrower, in
accordance with applicable Federal and state law, that has accorded the Borrower
or a Subsidiary full, effective, exclusive and original ownership of all
tangible and intangible property thereby arising or (B) have executed
appropriate instruments of assignment in favor of the Borrower or a Subsidiary
as assignee that have conveyed to the Borrower or a Subsidiary full, effective
and exclusive ownership of all tangible and intangible property thereby arising.
No former or current Personnel have any claim against the Borrower or any of the
Subsidiaries in connection with such person's involvement in the conception and
development of any Material Intellectual Property and no such claim has been
asserted or is threatened. None of the current officers and employees of the
Borrower or any of the Subsidiaries have any patents issued or applications
pending for any device, process, design or invention of any kind now used or
needed by the Borrower or any of the Subsidiaries in the furtherance of its
business operations, which patents or applications have not been assigned to the
Borrower or a Subsidiary, with such assignment duly recorded in the United
States Patent Office.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the
Restructure Effective Date a list of all the Subsidiaries, the respective
jurisdictions of organization thereof and the percentage ownership interest,
direct or indirect, of the Borrower therein.
SECTION 3.09. Litigation; Compliance with Laws. (a) Schedule
3.09(a) sets forth a list as of the Restructure Effective Date of all pending
or, to the knowledge of the Borrower or the Parent, threatened litigation,
arbitrations or other proceedings against the Borrower, the Parent or any
Subsidiary that involves a claim for more than $50,000. Except as set forth in
51
47
Schedule 3.09(a), none of such lawsuits, claims, arbitrations or other
proceedings as to which there is a reasonable possibility of adverse
determination would have, if so determined, a Material Adverse Effect. To the
knowledge of the Borrower or the Parent, except as set forth in Schedule
3.09(a), as of the Restructure Effective Date, neither the Borrower, the Parent
nor any Subsidiary is a party or subject to or in default under any material
judgment, order, injunction or decree of any Governmental Authority or
arbitration tribunal. Except as set forth in Schedule 3.09(a), there are no
actions, suits, investigations or proceedings at law or in equity or by or
before any arbitrator or Governmental Authority now pending or, to the knowledge
of the Borrower or the Parent, threatened against or affecting the Parent, the
Borrower, any of the Subsidiaries or any business, property or rights of the
Parent, the Borrower or any of the Subsidiaries (i) which involve any Loan
Document or (ii) as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth in Schedule 3.09(b), the Parent, the
Borrower and the Subsidiaries are in compliance with all applicable statutes,
laws, ordinances, rules, orders and regulations of any Governmental Authority
("Applicable Laws") including those relating to occupational health and safety,
except for instances of noncompliance that, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Except as set forth in
Schedule 3.09(a), as of the Restructure Effective Date neither the Borrower, the
Parent nor a Subsidiary has received any written communication during the past
three years from a Governmental Authority that alleges that the Borrower, the
Parent or such Subsidiary is not in compliance in any material respect with any
Applicable Laws. Except as set forth in Schedule 3.09(a), to the knowledge of
the Borrower or the Parent, as of the Restructure Effective Date, there is no
pending or threatened investigation of the Borrower, the Parent or a Subsidiary
by any Governmental Authority. This Section 3.09(b) does not relate to matters
with respect to taxes, which are the subject of Section 3.14, or to
environmental matters, which are the subject of Section 3.09(c).
(c) Except as set forth in Schedule 3.09(c): (i) as of the
Restructure Effective Date, neither the Borrower, the Parent nor any of the
Subsidiaries has received any written communication during the past five years
from a Governmental Authority that alleges that the Borrower, the Parent or such
Subsidiary is not in compliance with any Environmental Laws which has not been
resolved to the satisfaction of the Governmental Authority; (ii) each of the
Borrower, the Parent and the Subsidiaries holds and is in compliance with, all
material permits, licenses and governmental authorizations required for each of
the Borrower, the Parent and the Subsidiaries to conduct its business in
compliance with the Environmental Laws, and is in compliance with all
Environmental Laws, except for any instances of noncompliance which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect; (iii) as of the Restructure Effective Date, neither the
Borrower, the Parent nor any of the Subsidiaries has received any written
communication alleging that the Borrower, the Parent or any of the Subsidiaries
is liable to any party (including, but not limited to, a Governmental Authority)
as a result of the Release of a Hazardous Substance; (iv) to the knowledge of
the Borrower or the Parent, none of the properties owned or leased by the
Borrower or any of the Subsidiaries contains underground storage tanks,
asbestos-containing materials, or PCB-containing materials; and (v) to the
knowledge of the Borrower or the Parent, there have been no Releases of
Hazardous Substances on any of the properties owned or leased by the Borrower or
52
48
any of the Subsidiaries that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. For purposes of this Section
3.09(c) only: the term "Environmental Laws" means any and all applicable
foreign, Federal, state or local laws, regulations, binding determinations,
orders, decrees or permits issued, promulgated or entered into by any
Governmental Authority, relating to the Release of Hazardous Substances; the
term "Hazardous Substances" means all materials defined as hazardous substances
pursuant to Section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. xx.xx. 9601 et seq. ("CERCLA") and
petroleum; and the term "Release" shall have the meaning set forth in Section
101(22) of CERCLA.
SECTION 3.10. Agreements. (a) Each indenture or other agreement or
instrument evidencing Indebtedness and each other material agreement, contract,
lease, license, commitment or other instrument to which the Borrower, the Parent
or any of the Subsidiaries is a party or by which it or any of its properties or
assets are or may be bound as of the Restructure Effective Date, after giving
effect to the application of proceeds thereof as of the Restructure Effective
Date, is listed on Schedule 3.10(a) hereto (collectively with any agreements
listed on Schedule 3.20, the "Material Contracts").
(b) Except as set forth in Schedule 3.10(b), as of the Restructure
Effective Date, all the Material Contracts are valid, binding and in full force
and effect in all material respects. Except as set forth in Schedule 3.10(b), as
of the Restructure Effective Date, the Borrower, the Parent and the Subsidiaries
have performed all material obligations required to be performed by them to date
under the Material Contracts and they are not in breach or default in any
material respect thereunder and, to the knowledge of the Borrower or the Parent,
no other party to any of the Material Contracts is in breach or default in any
material respect thereunder. All contracts between the Borrower, any Subsidiary
or the Parent and the U.S. Department of Defense (and any modifications to such
contracts) with a face value in excess of $100,000 have been negotiated, fixed
priced agreements, as defined in the Federal Acquisition Regulation, as amended.
SECTION 3.11. Federal Reserve Regulations. (a) None of the
Borrower, the Subsidiaries and the Parent is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan and no Letter of Credit
will be used, whether directly or indirectly, and whether immediately,
incidentally or ultimately, for any purpose which entails a violation of, or
which is inconsistent with, the provisions of the regulations of the Board,
including Regulations G, U and X.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. None of the Parent, the Borrower and the Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935 or
(c) subject to regulation as a "public utility" or a "public service
corporation" or the equivalent under any federal or state law.
53
49
SECTION 3.13. Use of Proceeds. The proceeds of all New Revolving
Loans will be used solely to provide for the ongoing working capital and general
corporate purposes of the Borrower and the Subsidiaries. The New Letters of
Credit will be issued solely to support various financial and other performance
obligations of the Borrower and the Subsidiaries incurred in the ordinary course
of business. The Senior Secured Loans and the Junior Secured Loans were
consolidations and refinancings of Existing Loans.
SECTION 3.14. Tax Returns. Each of the Parent, the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns required to be filed by it and has paid or caused to be paid
all taxes shown to be due and payable on such returns or on any assessments
received by it, except taxes that are being contested in good faith by
appropriate proceedings diligently pursued and for which adequate reserves in
accordance with GAAP have been set aside on its financial statements.
SECTION 3.15. No Material Misstatements. To the knowledge of the
Borrower and the Parent as of the Restructure Effective Date, the reports,
financial statements, exhibits, schedules and other information (except for
forecasts and projections) furnished by or on behalf of the Borrower or the
Parent to the Lenders in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto, when taken as a whole and
evaluated in the context presented, do not contain any material misstatement of
fact or omit to state any material fact necessary to make the statements therein
not misleading in light of the circumstances under which such information was
provided. Any such report, financial statement, exhibit, schedule or other
information which constitutes a forecast or a projection was prepared in good
faith, was based on assumptions that the Borrower believes to be reasonable and
based on the best information available to the Borrower. As of the Restructure
Effective Date, except for the uncertainty inherent in any similar financial
forecast or projection, the Borrower has no reason to believe that any such
forecasts or projections are misleading in any material respect in light of the
circumstances existing at the time of preparation thereof.
SECTION 3.16. Employee Benefit Plans. (a) Each of the Borrower and
the Commonly Controlled Entities is in compliance in all material respects with
the applicable provisions of ERISA and the regulations and published
interpretations thereunder. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred within the five years prior to the Restructure
Effective Date with respect to any Plan, and each Plan has complied in all
material respects with the applicable provisions of ERISA and the Code. No
termination of a Single Employer Plan has occurred and no Lien in favor of the
PBGC or a Plan has arisen during the five years prior to the Restructure
Effective Date.
(b) The present value of all accrued benefits under each Single
Employer Plan in which the Borrower or any Commonly Controlled Entity is a
participant (based on those assumptions used to fund the Plans) did not, as of
the last annual valuation date prior to the Restructure Effective Date, exceed
the value of the assets of such Plan allocable to such accrued benefits.
(c) Neither the Borrower nor any Commonly Controlled Entity has
had a complete or partial withdrawal from any Multiemployer Plan, and neither
the Borrower nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrower or any
54
50
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the last valuation date prior to the Restructure
Effective Date.
(d) No such Multiemployer Plan is in "reorganization" or
"insolvent," within the meaning of such terms as used in ERISA.
(e) Neither the Borrower nor any Commonly Controlled Entity has
any liability for post retirement benefits to be provided to its current and
former employees.
(f) No prohibited transaction under ERISA or the Code has occurred
with respect to any Multiemployer Plan or Single Employer Plan which could have
a Material Adverse Effect.
SECTION 3.17. Government Contracting Matters. (a) Except as set
forth in Schedule 3.17(a), each of the Parent, the Borrower and the Subsidiaries
has complied with all material terms and conditions of each Government Contract
that provides for aggregate payments to the Parent, the Borrower and the
Subsidiaries of $50,000 or more, including all clauses, provisions and
requirements incorporated by reference or by operation of law therein, and there
are no claims that could reasonably be expected to have a Material Adverse
Effect nor any potential liability for defective pricing, false statements or
false claims on Government Contracts. For the purposes hereof, "Government
Contract" means any bid, quotation, proposal, contract, agreement, work
authorization, lease, commitment or sale or purchase order of the Parent, the
Borrower or any of the Subsidiaries with any foreign or domestic, Federal,
state, local or other governmental authority, agency or instrumentality,
including all contracts and work authorizations to supply goods and services to
such governmental authority, agency or instrumentality and including contracts
that are first-tier subcontracts on prime contracts.
(b) Except as set forth in Schedule 3.17(b), there is no action,
suit, proceeding or, to the Borrower's or the Parent's knowledge, investigation
relating to any proposed suspension or debarment of the Parent, the Borrower or
any of the Subsidiaries or any of their respective directors, officers,
employees or agents from doing business with any foreign or domestic, Federal,
state, or local government (or any agency or instrumentality thereof). None of
the Parent, the Borrower and the Subsidiaries, nor any of their respective
directors, officers, or employees is (or, to the Borrower's or the Parent's
knowledge, during the last five years has been) suspended, proposed for
debarment, or debarred from doing business with any foreign or domestic,
Federal, state, or local government (or any agency or instrumentality thereof)
or is (or during such period was) the subject of a finding of nonresponsibility
or ineligibility for contracting with any foreign or domestic, Federal, state,
or local government (or any agency or instrumentality thereof).
(c) Except as set forth in Schedule 3.17(c), to the Borrower's or
the Parent's knowledge, none of the Parent's, the Borrower's and the
Subsidiaries' respective directors, officers, employees or agents is (or during
the last five years has been) under administrative, civil, or criminal
investigation, indictment or information by any Governmental Authority with
respect to any material alleged irregularity, misstatement or omission arising
under or relating to any Government Contract. None of the Parent, the Borrower
and the Subsidiaries has any knowledge of any material irregularity,
misstatement or omission arising under or relating to any Government Contract
that has led or could reasonably lead, either before or after the Restructure
55
51
Effective Date, to any of the consequences set forth in Section 3.17(b) or to
any other material damage, penalty, assessment, recoupment of payment or
disallowance of cost.
(d) Except as set forth in Schedule 3.17(d), there exist (i) no
outstanding material claims against the Parent, the Borrower or any of the
Subsidiaries, by any foreign or domestic, Federal, state, or local government
(or any agency or instrumentality thereof) or by any prime contractor,
subcontractor, vendor or other third party, arising under or relating to any
Government Contract; and (ii) no material disputes between the Parent, the
Borrower or the Subsidiaries and any foreign or domestic, Federal, state, or
local government (or any agency or instrumentality thereof), or any prime
contractor, subcontractor, vendor or other third party, arising under or
relating to any Government Contract.
(e) None of the Parent, the Borrower and the Subsidiaries has, nor
are any of them in the conduct of their respective businesses required to have,
any facility security clearance or personnel security clearance or other
security clearance from any foreign or domestic, Federal, state, or local
government (or any agency or instrumentality thereof), and none of them have any
access to classified information in connection with any Government Contract or
otherwise.
SECTION 3.18. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Agent, for the ratable benefit of the
Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, the Pledge Agreement,
together with the Collateral delivered to the Agent pursuant thereto,
constitutes a fully perfected first priority Lien on, and security interest in,
all right, title and interest of the pledgors thereunder in such Collateral, in
each case prior and superior in right to any other person, except as provided in
the Centre Intercreditor Agreement.
(b) The Security Agreement is effective to create in favor of the
Agent, for the ratable benefit of the Secured Parties, a legal, valid and
enforceable first priority security interest in the Collateral, except as
provided in the Centre Intercreditor Agreement and, the Security Agreement,
together with financing statements filed in connection with the Original Credit
Agreement and the Pledged Securities (as defined in the Security Agreement)
delivered pursuant to the Security Agreement, constitute a fully perfected Lien
on, and security interest in, all right, title and interest of the grantors
thereunder in such Collateral in which a security interest can be perfected by
(i) filing a financing statement under Article 9 of the Uniform Commercial Code
or (ii) delivering possession of a security under Article 8 of the Uniform
Commercial Code, in each case prior and superior in right to any other person,
other than with respect to Liens expressly permitted by Section 6.02 and as
provided in the Centre Intercreditor Agreement.
(c) The Security Agreement, together with the filings made in the
United States Patent and Trademark Office and the United States Copyright Office
in connection with the Security Agreement constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the grantors
thereunder in the Intellectual Property of the Parent, the Borrower and the
Subsidiaries to the extent that security interests in such Intellectual Property
can be perfected by filing in such offices, in each case prior and superior in
right to any other person , except as provided in the Centre Intercreditor
Agreement (it being understood that subsequent filings in the United States
Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on Intellectual Property acquired by the grantors
after the date hereof).
56
52
(d) Each Mortgage is effective to create in favor of the Agent,
for the ratable benefit of the Secured Parties, a legal, valid and enforceable
Lien on all of the Loan Parties' right, title and interest in and to the
Mortgaged Property thereunder and the proceeds thereof, and when such Mortgage
is filed in the offices specified on Schedule 3.18(d), such Mortgage shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Mortgaged Property and the proceeds
thereof, in each case prior and superior in right to any other person, other
than with respect to the rights of persons pursuant to Liens expressly permitted
by Section 6.02 and as provided in the Centre Intercreditor Agreement.
(e) The Agent for the benefit of the Secured Parties will at all
times have the Liens provided for in the Collateral Documents and, subject to
the filing by the Agent of continuation statements to the extent required by the
Uniform Commercial Code, the Collateral Documents will at all times constitute a
valid and continuing lien of record and first priority perfected security
interest in all the Collateral referred to therein, except as provided in the
Centre Intercreditor Agreement and except as priority may be affected by Liens
expressly permitted by Section 6.02 and except for Collateral released in
accordance with all applicable provisions of this Amended Agreement and the
Collateral Documents. No filings or recordings are required in order to perfect
the security interests created under the Collateral Documents, except for
filings or recordings listed on Schedule 3.18(e).
(f) By complying with Sections 4.01(e) and 4.02(x) of the Security
Agreement and upon receipt by the Agent of acknowledgement copies of each Notice
of Assignment, substantially in the form of Exhibit D 2 to the Security
Agreement, as required under the Assignment of Claims Act of 1940, as amended
(31 U.S.C. ss.3727, 41 U.S.C. ss.15(1988)), each Grantor (as defined in the
Security Agreement) shall have assigned to the Agent all moneys due or to become
due under each Government Contract (other than (i) those Government Contracts
identified as completed on Schedule 13 to the Security Agreement and (ii)
Government Contract 65-02F-0414D with the General Services Administration) with
a total current or potential value exceeding $100,000 and entered into by such
Grantor with any U.S. Federal Governmental Authority.
SECTION 3.19. Solvency. (a) On and as of the Restructure Effective
Date each of the Parent, the Borrower and the Subsidiaries are Solvent.
"Solvent" means, with respect to any person, that (i) the fair value of the
assets of such person, at a fair valuation, will exceed the debts and
liabilities, subordinated, contingent or otherwise, of such person; (ii) the
present fair saleable value of the property of such person will be greater than
the amount that will be required to pay the liabilities of such person on its
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (iii) such person will
be able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (iv) such person
will not have an unreasonably small amount of capital with which to conduct the
businesses in which it is engaged as such businesses are now conducted and are
proposed to be conducted . With respect to any contingent liabilities, such
liabilities shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represents the amount which can reasonably
be expected to become an actual or matured liability.
57
53
(b) The Borrower does not intend to, or to permit any of the
Subsidiaries to, and does not believe that the Borrower or any of the
Subsidiaries will, incur debts beyond its ability to pay such debts as they
mature taking into account the timing of and amounts of cash to be received by
the Borrower or any such Subsidiary and the timing of and amounts of cash to be
payable on or in respect of indebtedness of the Borrower or any such Subsidiary.
SECTION 3.20. Transactions with Affiliates. Except as set forth in
Schedule 3.20, as of the Restructure Effective Date, neither the Borrower nor
any of the Subsidiaries is a party to or engaged in any transaction with, and
none of the properties and assets of the Borrower or any of the Subsidiaries is
subject to or bound by any agreement or arrangement with an Affiliate of the
Borrower or any of the Subsidiaries.
SECTION 3.21. Ownership. (a) As of the date on which the
transactions contemplated by this Amended Agreement are consummated, the
authorized Capital Stock of the Borrower consists of 1,000 shares of common
stock, par value $1.00 per share, all of which are issued and outstanding. All
of the shares of Capital Stock of the Borrower that are issued and outstanding
on the date on which the transactions contemplated by this Amended Agreement are
consummated have been duly and validly authorized and issued, are fully paid and
nonassessable, and were not issued in violation of the preemptive rights of any
shareholder. As of the date on which the transactions contemplated by this
Amended Agreement are consummated, the Parent has good, valid and marketable
title to all of the outstanding Capital Stock of the Borrower, free and clear of
Liens of every kind, whether absolute, matured, contingent or otherwise, other
than the Liens of the Pledge Agreement. As of the date on which the transactions
contemplated by this Amended Agreement are consummated there are no existing
options (including employee stock options), warrants, calls or commitments
relating to, or any securities or rights convertible into, exercisable for or
exchangeable for, any Capital Stock of the Borrower.
(b) As of the date on which the transactions contemplated by this
Amended Agreement are consummated, the authorized Capital Stock of the Parent
consists of (i) 100,000,000 shares of Class A common stock (the "Class A Common
Stock"), of which 68,750,050 are issued and outstanding (including contingent
shares issued to certain employees), including the Lender Common Stock, the
Centre Converted Class A Common Stock and the Centre New Class A Common Stock,
(ii) 6,200,000 shares of Class B non-voting common stock, of which 1,139,017 are
issued and outstanding, and (iii) 100,000 shares of preferred stock, 21,361.114
shares of which are issued and outstanding which are the Lender Preferred Stock
and the Centre New Preferred. As of the date on which the transactions
contemplated by this Amended Agreement are consummated, all of the shares of the
Class A Common Stock , Class B Common Stock and Preferred Stock of the Parent
that are issued and outstanding have been duly and validly authorized and
issued, are fully paid and nonassessable, and were not issued in violation of
the preemptive rights of any shareholder. As of the date on which the
transactions contemplated by this Amended Agreement are consummated there are no
existing options (including employee stock options), warrants, calls or
commitments relating to, or any securities or rights convertible into,
exercisable for or exchangeable for, any Capital Stock of the Parent, except as
set forth on Schedule 3.21(b). As of the date on which the transactions
contemplated by this Amended Agreement are consummated, the stock ownership of
the outstanding Capital Stock of the Parent was as shown on Schedule 3.21(b).
58
54
(c) All of the shares of common stock of each Subsidiary have been
duly and validly authorized and issued, are fully paid and nonassessable, and
were not issued in violation of the preemptive rights of any shareholder. The
Borrower owns, directly or indirectly, good, valid and marketable title to all
the common stock of each Subsidiary, free and clear of all Liens, other than the
Liens of the Collateral Documents, of every kind, whether absolute, matured,
contingent or otherwise. There are no existing options, warrants, calls or
commitments relating to, or any securities or rights convertible into,
exercisable for or exchangeable for, any Capital Stock of the Subsidiaries.
SECTION 3.22. Insurance. The Borrower and the Subsidiaries
maintain, as of the Restructure Effective Date, policies of fire and casualty,
liability, business interruption and other forms of insurance in such amounts,
with such deductibles and against such risks and losses as are necessary to
insure fully the business and assets of the Borrower and the Subsidiaries. All
such policies are in full force and effect as of the Restructure Effective Date,
all premiums due and payable thereon as of the Restructure Effective Date have
been paid in accordance with their terms (other than retroactive or
retrospective premium adjustments that are not yet, but may be, required to be
paid with respect to any period ending prior to the Restructure Effective Date
under comprehensive general liability and workmen's compensation insurance
policies), and no notice of cancellation or termination has been received as of
the Restructure Effective Date with respect to any such policy which has not
been replaced on substantially similar terms prior to the date of such
cancellation. The activities and operations of the Borrower and the Subsidiaries
have been conducted in a manner so as to conform in all material respects to all
applicable provisions of such insurance policies.
SECTION 3.23. Labor Matters. (a) Except as set forth in Schedule
3.23(a), as of the Restructure Effective Date, (i) there is no labor strike,
dispute, work stoppage or lockout pending, or, to the knowledge of the Borrower
or the Parent, threatened, against the Borrower or a Subsidiary; (ii) to the
knowledge of the Borrower or the Parent, no union organizational campaign is in
progress with respect to the employees of the Borrower or a Subsidiary; (iii)
there is no unfair labor practice charge or complaint against the Borrower or a
Subsidiary pending, or, to the knowledge of the Borrower or the Parent,
threatened, before the National Labor Relations Board; (iv) there are no
pending, or, to the knowledge of the Borrower or the Parent , threatened, union
grievances against the Borrower or a Subsidiary as to which there is a
reasonable possibility of adverse determination and that, if so determined,
would have a Material Adverse Effect; (v) there are no pending, or, to the
knowledge of the Borrower or the Parent, threatened, charges against the
Borrower, a Subsidiary or any current or former employee of any of them before
the Equal Employment Opportunity Commission or any state or local agency
responsible for the prevention of unlawful employment practices; and (vi)
neither the Borrower nor any of the Subsidiaries has received written notice
during the past three years of the intent of any Governmental Authority
responsible for the enforcement of labor or employment laws to conduct an
investigation of the Borrower or a Subsidiary and, to the knowledge of the
Borrower or the Parent, no such investigation is in progress.
(b) No employee or agent of the Parent, the Borrower or any
Subsidiary that has not signed a confidentiality and non-compete agreement is
privy to any information that, if disseminated to an unrelated third party,
could have a Material Adverse Effect.
59
55
SECTION 3.24. Licenses; Permits. Schedule 3.24 sets forth a true
and complete list as of the Restructure Effective Date of all material licenses,
permits and authorizations issued or granted to the Borrower and the
Subsidiaries by Governmental Authorities which are necessary or desirable for
the conduct of the business of the Borrower and the Subsidiaries as currently
conducted. Except as set forth in Schedule 3.24, as of the Restructure Effective
Date, all such licenses, permits and authorizations are validly held by the
Borrower or the relevant Subsidiary, and the Borrower and the Subsidiaries have
complied in all material respects with all terms and conditions thereof.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01. Conditions Precedent to the Restructure Effective
Date. This Amended Agreement shall become effective as of the Restructure
Effective Date, provided that all of the following conditions precedent set
forth in this Section 4.01, and the additional conditions precedent set forth in
Section 4.02, have been satisfied:
(a) The Agent shall have received (i) counterparts hereof
signed by each of the parties hereto (or, in the case of any Lender as
to which an executed counterpart shall not have been received,
telegraphic, telex, telecopy or other written confirmation from such
party in form satisfactory to the Agent of the execution of a
counterpart hereof by such Lender), (ii) counterparts to the Parent's
Consent, signed by each of the parties thereto, (iii) counterparts to
the Borrower's Consent signed by each of the parties thereto (or, in
the case of any Lender as to which an executed counterpart shall not
have been received, telegraphic, telex, telecopy or other written
confirmation from such party in form satisfactory to the Agent of the
execution of a counterpart hereof by such Lender) and (iv) counterparts
to the Subsidiaries' Consent signed by each of the parties thereto (or,
in the case of any Lender as to which an executed counterpart shall not
have been received, telegraphic, telex, telecopy or other written
confirmation from such party in form satisfactory to the Agent of the
execution of a counterpart hereof by such Lender).
(b) The Agent shall have received, for the account of
each Lender, duly executed Notes, dated as of the Restructure Effective
Date, complying with the provisions of Section 2.05 and an amendment to
the Mortgage, if requested by the Lenders. The Lenders will return to
the Borrower for cancellation the Revolving Notes and the Swingline
Notes executed by the Borrower pursuant to the Amended and Restated
Credit Agreement, and the Tranche A Term Notes and the Tranche B Term
Notes will be marked "replaced by the Notes dated as of the Restructure
Effective Date and issued to the Lenders" and held by the Lenders until
the Senior Secured Loans and the Junior Secured Loans have been paid in
full.
(b-1) The Lender Preferred Stock shall been duly issued to
the Lenders by the Parent in accordance with the terms hereof and
subject to an agreement acceptable to the Agent in its sole discretion.
60
56
(b-2) The Lender Common Stock shall have been duly issued
to the Lenders by the Parent and the Agent shall have received for the
benefit of the Lenders, the Registration Rights Agreement, dated and
effective as of the Restructure Effective Date and duly executed by the
parties thereto.
(b-3) The Agent shall have received for the benefit of each
of the Lenders certificates representing the duly issued shares of the
Lender Preferred Stock and the Lender Common Stock.
(c) The Agent on behalf of the Secured Parties shall have
a security interest in the Collateral of the type and priority
described in each Collateral Document, perfected to the extent
contemplated by Section 3.18 (but subject to the interest of the Centre
Parties pursuant to the Centre Intercreditor Agreement) and the Agent
shall have received:
(i) confirmation by the Borrower that the Agent
has previously received certificates representing all Pledged
Securities (as defined in the Security Agreement and Pledge
Agreement), accompanied by stock powers endorsed in blank; and
(ii) confirmation by the Borrower that no
additional filing, registration or recordation of any document
(including any Uniform Commercial Code financing statement) is
required to be filed, registered or recorded in order to
create in favor of the Agent in accordance with the Centre
Intercreditor Agreement for the benefit of the Secured Parties
a valid, legal and perfected security interest in or Lien on
the Collateral.
(d) The Agent shall have received an opinion or opinions
of counsel to the Parent and the Borrower with respect to such matters
as the Agent and the Lenders may reasonably request and being in form
and substance satisfactory to the Agent and the Lenders, dated the date
of execution of the Amended Agreement and addressed to the Agent and
the Lenders.
(e) The Agent shall have received:
(i) a certificate, dated the date of execution
of the Amended Agreement and signed by a Financial Officer of
each of the Borrower and the Domestic Subsidiaries confirming
compliance with the conditions precedent set forth in
paragraphs (h), (j) and (k) of this Section 4.01 and in
paragraphs (c), (d) and (e) of Section 4.02;
(ii) a copy of the long form certificate of
incorporation or other constitutive documents, including all
amendments thereto, of the Parent, the Borrower and the
Domestic Subsidiaries, certified as of a recent date by the
Secretary of State (or comparable authority) of the
jurisdiction of its organization, and a certificate as to the
good standing of each such party as of a recent date, from
such Secretary of State (or other authority);
61
57
(iii) a certificate of the Secretary or Assistant
Secretary of the Parent, the Borrower and the Domestic
Subsidiaries dated the date of execution of the Amended
Agreement and certifying (A) that attached thereto is a true
and complete copy of the by-laws or comparable governing
instruments of such party as in effect on that date and at all
times since a date prior to the date of the resolutions
described in clause (B) below, (B) that attached thereto is a
true and complete copy of resolutions duly adopted by the
Board of Directors or comparable governing body of such party
(or, in the case of any partnership, of the general partner of
such party) authorizing the execution, delivery and
performance of this Amended Agreement, the Loan Documents to
which such party is or will be a party, including without
limitation, the Parent's Consent, the Subsidiaries' Consent
and the Borrower's Consent, and in the case of the Parent, the
issuance of the Lender Common Stock, the Lender Preferred
Stock, the Centre Converted Class A Common, the Centre New
Preferred and the Centre New Class A Common, and in the case
of the Borrower, the extensions of credit hereunder, and that
such resolutions have not been modified, rescinded or amended
and are in full force and effect, (C) that the certificate of
incorporation or other constitutive documents of such party
have not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished
pursuant to clause (ii) above, and (D) as to the incumbency
and specimen signature of each officer executing any Loan
Document or any other document delivered in connection
herewith on behalf of such party; and
(iv) such other documents, opinions, certificates
and agreements in connection with the Facilities, in form and
substance satisfactory to the Agent, as it shall reasonably
request.
(f) The Borrower shall have paid all fees, if any, and
other amounts due and payable to the Agent or any Lender on or prior to
the date of execution of the Amended Agreement.
(g) The Agent shall have received evidence satisfactory
to the Agent that the Deutsche Financial Loan has been paid by the
Centre Entities pursuant to their guaranties;
(g-1) The Centre Senior Secured Notes and the Centre Junior
Secured Notes shall have been duly executed and delivered to the Centre
Entities by the Borrower and shall have been guaranteed by the Parent
and the Other Loan Parties.
(g-2) The Centre Intercreditor Agreement containing terms
and conditions satisfactory to the Agent in its sole discretion shall
have been duly executed by the Lenders, the Agent and the Centre
Entities and shall be effective as of the Restructure Effective Date.
(g-3) The Centre New Preferred Stock shall have been issued
to the Centre Entities and the Centre New Class A Common Stock shall
have been issued to the Centre Entities.
62
58
(g-4) The Centre Existing Preferred Stock shall have been
exchanged for the Centre Converted Class A Common Stock.
(h) No Material Adverse Change shall have occurred since
the date of execution of this Amended Agreement.
(i) Intentionally Deleted.
(j) The Agent shall have received satisfactory evidence
that the Borrower has obtained all governmental, shareholder and third
party consents and approvals and expiration of all applicable waiting
or appeal periods necessary or, in the opinion of the Agent,
appropriate in connection with this Amended Agreement.
(k) There shall not exist any action, suit, investigation
or proceeding pending or threatened in any court or before any
arbitrator or other Governmental Authority that purports to adversely
affect the Facilities or that could have a material adverse effect on
the ability of the Borrower or the Subsidiaries to perform their
obligations under the documents to be executed in connection with the
Facilities, except as disclosed to and approved by the Agent prior to
the date hereof.
(l) The Voting Agreement shall have been duly executed by
the Lenders and the Agent.
(m) The transactions contemplated by this Amended
Agreement shall have been consummated no later than August 25, 2000.
SECTION 4.02. Conditions to Advances on the New Revolving Loans and
the Issuance of New Letters of Credit. The obligations of the Lenders to make an
advance on the New Revolving Credit Loans hereunder, and the obligation of the
Issuing Bank to issue New Letters of Credit hereunder, are subject to the
satisfaction of the conditions that on the date of each borrowing on the New
Revolving Credit Loan and on the date of issuance of each New Letter of Credit:
(a) The Agent shall have received a notice of such
borrowing as required by Section 2.04 or a notice requesting the
issuance of such New Letter of Credit as required by Section 2.22(d),
as applicable.
(b) Each of the Lenders shall have approved the advance
on the New Revolving Credit Loans or the issuance of the New Letter of
Credit, which shall be at the sole discretion of such Lenders.
(c) The representations and warranties set forth in
Article III of this Amended Agreement and the representations and
warranties of the Borrower and the other Loan Parties set forth in the
other Loan Documents shall be true and correct in all material respects
on and as of the date of such advance or the date of the issuance of
such New Letter of Credit with the same effect as though made on and as
of such date, except to the extent such representations and warranties
expressly relate to an earlier date (in which
63
59
case such representations and warranties shall be true and correct in
all material respects on and as of such earlier date).
(d) At the time of and immediately after such advance or
the issuance of such New Letter of Credit, the aggregate outstanding
principal amount of the New Revolving Credit Loans and the Dollar
Amount of all New Letter of Credit Exposure and the Dollar Amount of
each Existing Letter of Credit then outstanding shall not exceed
$827,891.
(e) At the time of and immediately after such advance or
the issuance of such New Letter of Credit, no Default or Event of
Default shall have occurred and be continuing.
Each advance hereunder and each issuance of a New Letter of Credit hereunder
shall be deemed to constitute a representation and warranty by the Borrower on
the date of such advance or issuance of such New Letter of Credit as to the
matters specified in paragraphs (b), (c) and (d) of this Section 4.02.
ARTICLE V
AFFIRMATIVE COVENANTS
The Borrower and the Parent covenant and agree with each Lender that so
long as this Amended Agreement shall remain in effect or any Obligations shall
be unpaid, and until the New Revolving Credit Commitments have been terminated
and the Loans, together with interest, fees and all other Obligations have been
paid in full, all Letters of Credit have been cancelled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing:
SECTION 5.01. Existence; Businesses and Properties. (a) The
Borrower will, and will cause each of the Subsidiaries to, and the Parent will,
do or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence, except as otherwise expressly permitted
under Section 6.05(a).
(b) The Borrower will, and will cause each of the Subsidiaries to,
and the Parent will, do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, leases,
privileges, licenses, permits, franchises, authorizations, patents, copyrights,
trademarks, trade names and all other Intellectual Property material to the
conduct of its business; maintain and operate such business in substantially the
manner in which it is presently conducted and operated; comply in all material
respects with all applicable laws, rules, regulations (including any zoning,
building, ordinance, code or approval or any building permits or any
restrictions of record or agreements affecting the Mortgaged Properties and
excluding Environmental Laws, which are subject to the provisions of Section
5.11) and judgments, writs, injunctions, decrees and orders of any Governmental
Authority, whether now in effect or hereafter enacted; and at all times maintain
and preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition (subject to ordinary wear
and tear) and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in order that the business carried on in connection therewith may be
properly conducted at all times.
64
60
SECTION 5.02. Insurance. (a) The Borrower will, and will cause each
of the Subsidiaries to, keep its insurable properties fully insured at all times
by financially sound and reputable insurers; such insurance to include fire and
other risks insured against by extended coverage, public liability insurance
against claims for personal injury or death or property damage occurring upon,
in, about or in connection with the use of any properties owned, occupied or
controlled by it and business interruption insurance, and maintain such other
insurance as may be required by law.
(b) The Borrower will, and will cause each of the Subsidiaries to,
cause all such policies (other than workers' compensation and employee health
policies) to be endorsed or otherwise amended to include a "standard" or "New
York" lender's loss payable endorsement, in form and substance reasonably
satisfactory to the Agent, which endorsement shall provide that, from and after
the Restructure Effective Date, if the insurance carrier shall have received
written notice from the Agent of the occurrence of an Event of Default, the
insurance carrier shall pay all proceeds otherwise payable to the Borrower or
the Loan Parties under such policies directly to the Agent; cause all such
policies to provide that neither the Borrower, the Agent nor any other party
shall be a coinsurer thereunder and to contain a "Replacement Cost Endorsement",
without any deduction for depreciation, and such other provisions as the Agent
may reasonably require from time to time to protect the interests of the Agent
and the Lenders; deliver original or certified copies of all such policies to
the Agent; cause each such policy to provide that it shall not be cancelled,
modified or not renewed (i) by reason of nonpayment of premium upon not less
than 30 days' prior written notice thereof by the insurer to the Agent (giving
the Agent the right to cure defaults in the payment of premiums) or (ii) for any
other reason upon not less than 30 days' prior written notice thereof by the
insurer to the Agent; deliver to the Agent, prior to the cancellation,
modification or nonrenewal of any such policy of insurance, a copy of a renewal
or replacement policy (or other evidence of renewal of a policy previously
delivered to the Agent) together with evidence satisfactory to the Agent of
payment of the premium therefor.
(c) If at any time the area in which the Premises (as defined in
the Mortgages) are located is designated (i) a "flood hazard area" in any Flood
Insurance Rate Map published by the Federal Emergency Management Agency (or any
successor agency), the Borrower will, and will cause each of the Subsidiaries
to, obtain flood insurance in such total amount as the Agent or the Required
Lenders may from time to time require, and otherwise comply with the National
Flood Insurance Program as set forth in the Flood Disaster Protection Act of
1973, as it may be amended from time to time, or (ii) a "Zone 1" area, to the
extent available at commercially reasonable rates, obtain earthquake insurance
in such total amount as the Agent or the Required Lenders may from time to time
require.
(d) With respect to any Mortgaged Property, the Borrower will, and
will cause each of the Subsidiaries to, carry and maintain comprehensive general
liability insurance including coverage on an occurrence basis against claims
made for personal injury (including bodily injury, death and property damage)
and umbrella liability insurance against any and all claims, in no event for a
combined single limit with respect to such Mortgaged Property of less than
$10,000,000, naming the Agent as an additional insured, on forms satisfactory to
the Agent.
(e) The Borrower will, and will cause each of the Subsidiaries to,
notify the Agent immediately whenever any separate insurance concurrent in form
or contributing in the event of
65
61
loss with that required to be maintained under this Section 5.02 is taken out by
the Borrower; and promptly deliver to the Agent a duplicate original copy of
such policy or policies.
(f) In connection with the covenants set forth in this Section
5.02, it is understood and agreed that:
(i) none of the Agent, the Lenders, the Issuing Bank or
their respective agents or employees shall be liable for any loss or
damage insured by the insurance policies required to be maintained
under this Section 5.02, it being understood that (A) the Borrower and
the other Loan Parties shall look solely to their insurance companies
or any other parties other than the aforesaid parties for the recovery
of such loss or damage and (B) such insurance companies shall have no
rights of subrogation against the Agent, the Lenders, the Issuing Bank
or their agents or employees. If, however, the insurance policies do
not provide waiver of subrogation rights against such parties, as
required above, then the Borrower hereby agrees, to the extent
permitted by law, to waive its right of recovery, if any, against the
Agent, the Lenders, the Issuing Bank and their agents and employees;
(ii) the Borrower will permit an insurance consultant
retained by the Agent, at the expense of the Borrower, to review the
insurance policies maintained by the Borrower and the Subsidiaries, but
no more frequently than annually; and
(iii) the designation of any form, type or amount of
insurance coverage by the Agent or the Required Lenders under this
Section 5.02 shall in no event be deemed a representation, warranty or
advice by the Agent or the Lenders that such insurance is adequate for
the purposes of the business of the Borrower and the Subsidiaries or
the protection of their properties and the Agent and the Required
Lenders shall have the right from time to time to require the Borrower,
the Subsidiaries and the Parent to keep other insurance in such form
and amount as the Agent or the Required Lenders may reasonably request,
provided that such insurance shall be obtainable on commercially
reasonable terms.
SECTION 5.03. Obligations and Taxes. The Borrower will, and will
cause each of the Subsidiaries to, and the Parent will, pay all of its
obligations (other than Indebtedness) promptly and in accordance with their
terms and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
in respect of its property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might give rise to a Lien upon such properties or
any part thereof; provided, however, that such payment and discharge shall not
be required with respect to any such tax, assessment, charge, levy or claim so
long as the validity or amount thereof shall be contested in good faith by
appropriate proceedings diligently pursued and the Borrower shall have set aside
on its books adequate reserves in accordance with GAAP with respect thereto and
such contest operates to suspend collection of the contested obligation, tax,
assessment or charge and enforcement of a Lien and, in the case of a Mortgaged
Property, there is no risk of forfeiture of such property.
SECTION 5.04. Financial Statements, Reports, etc. The Parent will
furnish to the Agent and each Lender:
66
62
(a) as soon as available, and in any event within 90 days
after the end of each fiscal year, its consolidated balance sheet and
related consolidated statements of operations and cash flows, showing
the consolidated financial position of the Parent and the Borrower and
its Consolidated Subsidiaries as of the close of such fiscal year and
the consolidated results of their operations and cash flows during such
year, in each case setting forth in comparative form the figures for
the preceding fiscal year, all audited by Xxxxxx Xxxxxxxx LLP or
another nationally recognized "Big Six" independent public accounting
firm and accompanied by an opinion of such accountants (which shall not
be qualified in any material respect) to the effect that such financial
statements fairly present the consolidated financial position and
consolidated results of operations and cash flows of the Parent and the
Borrower and its Consolidated Subsidiaries in accordance with GAAP
consistently applied;
(b) as soon as available, and in any event within 45 days
after the end of each of the first three fiscal quarters of each fiscal
year, its consolidated balance sheet and related consolidated
statements of operations and cash flows, showing the consolidated
financial position of the Parent and the Borrower and its Consolidated
Subsidiaries as of the close of such fiscal quarter, the consolidated
results of their operations during such fiscal quarter and the then
elapsed portion of the fiscal year and the consolidated cash flows for
the then elapsed portion of the fiscal year, all certified by one of
its Financial Officers as fairly presenting the consolidated financial
position and consolidated results of operations and cash flows of the
Parent and the Borrower and its Consolidated Subsidiaries in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments;
(c) concurrently with any delivery of financial
statements under paragraph (a) or (b) above, a certificate of a
Financial Officer of the Parent certifying that no Default or Event of
Default has occurred or, if such a Default or Event of Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto;
(d) concurrently with any delivery of financial
statements under paragraph (a) or (b) above, a certificate of a
Financial Officer of the Parent, in form and substance satisfactory to
the Agent, (i) setting forth computations in reasonable detail
satisfactory to the Agent demonstrating compliance with the covenants
contained in Sections 6.14 and 6.15, (ii) stating whether, since the
date of the most recent Required Financial Statements previously
delivered, there has been any material change in the generally accepted
accounting principles applied in the preparation of the Parent's
financial statements and, if so, describing such change, (iii)
containing summaries of accounts payable agings, accounts receivable
agings, and inventory on a stand-alone basis, (iv) in the case of a
certificate delivered concurrently with a certificate under paragraph
(a) above, setting forth the Excess Cash Flow for the preceding fiscal
year and a reasonably detailed calculation thereof, (v) a comparison of
the actual results during the period covered by such financial
statements to those originally budgeted by the Parent prior to the
beginning of the applicable fiscal year, along with management's
discussion and analysis of variances between such actual and budgeted
results, as well as variances between actual results for such period
and actual results for the same period in the previous fiscal year
67
63
and (vi) a list of any significant sales contracts awarded or
terminated since the date of the most recent Required Financial
Statements previously delivered, including a description thereof in
reasonable detail (provided that the Parent may disclose orally, rather
than in writing, any such sales information that the Parent deems
highly sensitive from a competitive standpoint);
(e) Intentionally deleted.
(f) promptly upon completion, but in any event not later
than 30 days after the commencement of each fiscal year, a copy of
projections by the Parent of its consolidated balance sheet and related
consolidated statements of operations and cash flows for such fiscal
year (including all material assumptions to such projections) and a
budget for such fiscal year, all in form customarily prepared by the
Parent's management, such projected financial statements to be
accompanied by a certificate of a Financial Officer to the effect that
such projected financial statements have been prepared in good faith,
based on assumptions that the Parent believes to be reasonable and
based on the best information available to the Parent and that such
Financial Officer has no reason to believe they are misleading in any
material respect in light of the circumstances existing at the time of
preparation thereof;
(g) on Wednesday of each week, a copy of projections by
the Parent of its consolidated cash flows for the 12-week period
beginning on such Wednesday (including all material assumptions to such
projections), in form and substance and in such detail as may be
satisfactory to the Lenders, such cash flow projections to be
accompanied by a certificate of a Financial Officer to the effect that
such cash flow projections have been prepared in good faith, based on
assumptions that the Parent believes to be reasonable and based on the
best information available to the Parent and that such Financial
Officer has no reason to believe they are misleading in any material
respect in light of the circumstances existing at the time of
preparation thereof;
(h) as soon as available, (i) a copy of each financial
statement, report, notice or proxy statement sent by the Parent, the
Borrower or any of the Subsidiaries to their respective stockholders in
their capacity as stockholders, (ii) a copy of each regular, periodic
or special report, registration statement, or prospectus filed by the
Parent, the Borrower or any of the Subsidiaries with any securities
exchange or the SEC, (iii) any material order issued by any court,
governmental authority, or arbitrator in any material proceeding to
which the Parent, the Borrower or any of the Subsidiaries is a party
and (iv) copies of all press releases and other statements made
available generally by the Parent, the Borrower or any of the
Subsidiaries to the public generally concerning material developments
in the Parent's, the Borrower's or such Subsidiary's business;
(i) as soon as available, and in any event within 15 days
of receipt, any final management letter issued or provided by the
auditors of the Parent, the Borrower or any Subsidiary; and
(j) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Parent, the Borrower or any
68
64
Subsidiary, or compliance with the terms of any Loan Document, as the
Agent or any Lender may reasonably request.
SECTION 5.05. Other Information. (a) The Borrower will furnish to
the Agent prompt written notice of the following:
(i) any Default or Event of Default, specifying the
nature and extent thereof and the corrective action (if any) proposed
to be taken with respect thereto;
(ii) the filing or commencement of, or any threat or
notice of intention of any person to file or commence, any action, suit
or proceeding, whether at law or in equity or by or before any
Governmental Authority, against or affecting the Parent, the Borrower
or any of the Subsidiaries (A) which, if adversely determined, could,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or (B) which involves a claim or series of
related claims against the Parent, the Borrower or any Subsidiary in
excess of $50,000;
(iii) all matters materially affecting the value,
enforceability or collectibility of any material portion of its assets,
including changes to significant contracts, schedules of equipment,
changes of significant equipment or real property, the reclamation or
repossession of, or the return to the Borrower or any of the
Subsidiaries of, a material amount of goods and material claims or
disputes asserted by any customer or other obligor, which matters could
have a Material Adverse Effect;
(iv) any material adverse change in the relationship
between any of the Borrower and the Subsidiaries, on the one hand, and
any of its respective suppliers, licensors or customers, on the other
hand, which could reasonably be expected to have a Material Adverse
Effect.
(v) all proposed amendments to any material agreement
relating to Indebtedness to which the Borrower or any Subsidiary is a
party; and
(vi) any development that, individually or in the
aggregate, has resulted in, or could reasonably be expected to have, a
Material Adverse Effect.
(b) Immediately upon receipt by the Borrower, the Borrower shall
provide the Agent and the Lenders with copies of all notices (including notices
of default), statements and financial information received from any other
creditor or lessor with respect to any item of Indebtedness which, if not paid,
could give rise to an Event of Default or the repossession of material property
from the Borrower or any of the Subsidiaries.
(c) Any notification required by this Section 5.05 shall be
accompanied by a certificate of a Financial Officer of the Borrower setting
forth the details of the specified events and the action which the Borrower
proposes to take with respect thereto.
(d) The Borrower will deliver to the Agent no later than the first
Business Day of each month, a report on the status of proposed and existing
contracts of the Borrower and the Subsidiaries, in form and substance and in
such detail as may be satisfactory to the Lenders, but
69
65
in any event including but not limited to the following: (i) all government
contracts for which a bid has been or is being prepared, whether the bid has
been submitted or when it will be, whether the bid has been awarded and to whom,
or when it will be, whether the bid has been rejected, and, if awarded, the
status of the contract and (ii) with respect to other contracts, describing all
contracts in negotiation or bid preparation and all contracts that have been
awarded or rejected, and, if awarded, the status of each contract.
(e) Each Lender and the Agent agrees to use reasonable efforts to
keep confidential, in accordance with its customary practices, all information
obtained by it pursuant to this Section 5.05 or any other provision of the Loan
Documents, except for any disclosure (i) to its employees, officers, advisers
and agents which are acting in connection with the Loan Documents, (ii) to its
actual or prospective assignees or participants who agree to be bound by the
provisions of this paragraph (e), (iii) in respect of information to the extent
that it becomes available to the public other than pursuant to a breach of this
paragraph (e) or (iv) required by law, regulation or judicial order or requested
or required by bank regulators or auditors.
SECTION 5.06. ERISA. (a) The Borrower will, and will cause each of
the Subsidiaries to, and the Parent will, comply in all material respects with
the applicable provisions of ERISA and the Code.
(b) The Borrower will promptly give notice to the Agent and each
Lender of the following events, as soon as possible and in any event within 30
days after the Borrower knows or has reason to know thereof: (i) the occurrence
or expected occurrence of any Reportable Event with respect to any Plan, a
failure to make any required contribution to a Plan, any filing by the Borrower
with the PBGC of a notice of intent to terminate a Plan, any receipt by the
Borrower of notice from the PBGC of the intention of the PBGC to terminate a
Plan or appoint a trustee to administer a Plan, any Lien in favor of the PBGC or
a Plan, or any withdrawal from, or the termination, reorganization or insolvency
(within the meaning of such terms as used in ERISA) of, any Multiemployer Plan;
or (ii) the institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, reorganization or
insolvency (within the meaning of such terms as used in ERISA) of, any Single
Employer Plan or Multiemployer Plan.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. The Borrower will, and will cause each of the Subsidiaries to, keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of the Subsidiaries to, permit any representatives designated by
the Agent or the Required Lenders to visit and inspect the financial records and
the properties of the Borrower or any Subsidiary at reasonable times and as
often as reasonably requested, and to make extracts from and copies of such
financial records, and permit any representatives designated by the Agent or the
Required Lenders to discuss the affairs, finances and condition of the Borrower
or any Subsidiary with the officers thereof and independent accountants therefor
(with representatives of the Borrower present unless an Event of Default or
Default has occurred and is continuing).
70
66
SECTION 5.08. Use of Proceeds. The Borrower will use the proceeds
of the Loans and request the issuance of New Letters of Credit only for the
purposes set forth in Section 3.13.
SECTION 5.09. Intentionally deleted.
SECTION 5.10. Fiscal Year. The Borrower will, and will cause each
Subsidiary to, cause its fiscal year to end on March 31 in each year.
SECTION 5.11. Compliance with Environmental Laws; Preparation of
Environmental Reports. (a) The Borrower will, and will cause each Subsidiary to,
and the Parent will, comply, and use its best efforts to cause all lessees and
other persons occupying the properties owned or leased by the Borrower and the
Subsidiaries (the "Properties") to comply, in all material respects with all
Environmental Laws and Environmental Permits applicable to its operations and
Properties except to the extent that the failure to comply therewith could not
reasonably be expected to result in liability in excess of $250,000; obtain and
renew all material Environmental Permits necessary for its operations and
Properties; and conduct any Remedial Action required under, and in accordance
with, Environmental Laws, except to the extent that: (i) the cost of such
Remedial Action could not reasonably be expected to exceed $250,000; or (ii) the
necessity of any such Remedial Action is being contested in good faith by
appropriate proceedings timely instituted and diligently pursued and in the
manner provided by applicable law.
(b) If a Default or Event of Default caused by reason of a breach
of Section 3.09(c) or 5.11(a) shall have occurred and be continuing, or if the
laws of the United States or any state in which the Borrower or any of the
Subsidiaries leases or owns property provide that a Lien upon the property of
the Borrower or any of the Subsidiaries may be obtained for the removal of
Hazardous Materials which have been released, at the request of the Required
Lenders through the Agent, the Borrower will provide to the Lenders within 45
days after such request, at the expense of the Borrower, an environmental site
assessment report for the Properties which are the subject of such Default or
Event of Default prepared by an environmental consulting firm acceptable to the
Agent and indicating the presence or absence of Hazardous Materials and the
estimated cost of any compliance or Remedial Action in connection with such
Properties. To the extent any such Hazardous Materials are located therein or
thereunder that either (i) subject the property to Lien or (ii) require removal
to safeguard the health of any person, the Borrower shall, and shall cause each
of the Subsidiaries to, remove, or cause to be removed, such Lien and such
Hazardous Materials at the Borrower's expense. The Borrower acknowledges and
agrees that if the Borrower fails to perform its obligations under this Section
5.11(b), the Agent shall have the right to do so for the Borrower and the
Subsidiaries. The Borrower further acknowledges and agrees that if the Borrower
or any Subsidiary fails to cooperate (e.g., by allowing access to any premises
or permitting the drilling of core samples, etc.), the Agent and the Lenders
will not have an adequate remedy at law.
SECTION 5.12. Further Assurances. The Borrower will, and will cause
each Subsidiary to, and the Parent will, execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust) that may be required under applicable law, or that
the Required Lenders or the Agent may reasonably request, in order to effectuate
the transactions contemplated by the Loan Documents and in order to grant,
maintain,
71
67
preserve, protect and perfect the validity and first priority (except as such
priority may be affected by the Liens permitted under Section 6.02 and the
Centre Intercreditor Agreement) of the security interests created or intended to
be created by the Collateral Documents. The Borrower will cause any subsequently
acquired or organized Domestic Subsidiary to become a party to the Subsidiaries
Guarantee Agreement, Indemnity Subrogation and Contribution Agreement,
Intercompany Note and each applicable Collateral Document in favor of the Agent;
provided that the foregoing shall not be deemed to imply that any such
acquisition or organization of a Subsidiary is permitted under this Amended
Agreement. In addition, from time to time, the Borrower will, and will cause
each Domestic Subsidiary to, at its cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
as the Agent or the Required Lenders shall designate (it being understood that
it is the intent of the parties that the Obligations shall be secured by, among
other things, substantially all the assets of the Borrower and the Domestic
Subsidiaries (including real and other properties owned or leased as of the
Restructure Effective Date or acquired subsequent to the Restructure Effective
Date and including 100% of the capital stock of each Subsidiary, except that in
the case of the pledge of the capital stock of any Foreign Subsidiary, such
pledge shall be limited to 65% of the capital stock of such Foreign Subsidiary
to the extent, and for so long as, the pledge of any greater percentage would
have adverse tax consequences for the Borrower). Such security interests and
Liens will be created under the Collateral Documents and other security
agreements, mortgages, deeds of trust and other instruments and documents in
form and substance satisfactory to the Agent, and the Borrower shall deliver or
cause to be delivered to the Lenders all such instruments and documents
(including legal opinions, title insurance policies, surveys and lien searches)
as the Agent shall reasonably request to evidence compliance with this Section
5.12. The Borrower agrees to provide such evidence as the Agent shall reasonably
request as to the perfection and priority status of each such security interest
and Lien.
SECTION 5.13. Management Consultant. The Parent and the Borrower
shall engage a management consultant acceptable to the Required Lenders on terms
and conditions acceptable to the Required Lenders on or before September 30,
2000.
ARTICLE VI
NEGATIVE COVENANTS
The Borrower and the Parent covenant and agree with each Lender that so
long as this Amended Agreement shall remain in effect or any Obligations shall
be unpaid, and until the New Revolving Credit Commitments have been terminated
and the Loans, together with interest, fees and all other Obligations have been
paid in full, all Letters of Credit have been cancelled or have expired and all
amounts drawn thereunder have been reimbursed in full, unless the Required
Lenders shall otherwise consent in writing:
SECTION 6.01. Indebtedness. The Parent and the Borrower will not,
and will not cause or permit any of the Subsidiaries to, incur, create, issue,
assume or permit to exist any Indebtedness or Preferred Stock, except:
72
68
(a) Indebtedness existing as of the Restructure Effective
Date, to the extent set forth on Schedule 6.01(a) (but not any
extension, renewal or refinancing thereof);
(b) Indebtedness represented by the Loan Documents (other
than the Intercompany Notes), the Centre Senior Secured Notes and the
Centre Junior Secured Notes and the Centre Loan Agreement;
(c) Intentionally deleted.
(d) Intentionally deleted.
(e) Indebtedness represented by the Intercompany Notes,
to the extent permitted by Section 6.04(a)(ii);
(f) other unsecured Indebtedness in an aggregate
principal amount of up to $1,000,000 outstanding at any time;
(g) Indebtedness consisting of the obligation to
reimburse the issuer of any bid bond, performance bond or other
instrument of a like nature and purpose incurred in the ordinary course
of business up to $500,000 in the aggregate outstanding at any time;
(h) the Lender Preferred Stock; and
(i) the Centre New Preferred.
SECTION 6.02. Negative Pledge. The Parent and the Borrower will
not, and will not cause or permit any of the Subsidiaries to, create, incur,
assume or permit to exist any Lien on any property or assets (including stock or
other securities of any Subsidiary or other person) now owned or hereafter
acquired by it or on any income or revenues or rights in respect of any thereof,
except:
(a) Liens existing as of the Restructure Effective Date,
to the extent set forth on Schedule 6.02(a), provided that such Liens
secure only those obligations which they secure as of the Restructure
Effective Date;
(b) Liens in favor of the Agent on behalf of the Secured
Parties created by the Collateral Documents;
(c) Liens for taxes not yet due or which are being
contested in compliance with Section 5.03;
(d) carriers', warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business and securing obligations that are not due or which are being
contested in compliance with Section 5.03;
(e) pledges and deposits made in the ordinary course of
business in compliance with workmen's compensation, unemployment
insurance and other social security laws or regulations;
73
69
(f) trade contracts (other than for Indebtedness), leases
(other than Capital Lease Obligations), and other obligations of a like
nature incurred in the ordinary course of business;
(g) zoning restrictions, easements, rights-of-way,
restrictions on use of real property and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of the Subsidiaries;
(h) deposits of up to $500,000 in the aggregate
outstanding at any time to secure any obligations permitted by Section
6.01(g);
(i) Intentionally deleted;
(j) Liens arising by operation of law held by any Wholly
Owned Subsidiary which is a Foreign Subsidiary securing accounts
payable by the Borrower to such Foreign Subsidiary for finished
products acquired by the Borrower from such Foreign Subsidiary in
transactions contemplated by, and subject to the limitations set forth
in, clause (iv) of Section 6.04(a); provided that (i) such Liens
securing accounts payable for finished products do not extend to any
property other than such finished products, (ii) all such Foreign
Subsidiaries shall have executed and delivered to the Agent an
Acknowledgement of Subordination substantially in the form of Exhibit L
hereto, (iii) the payment of all accounts payable by the Borrower to
any such Foreign Subsidiary shall be subordinate to the payment in full
of all the Obligations and (iv) any such Liens shall have a subordinate
lien status to the liens and other claims created under the Collateral
Documents for the benefit of the Agent and the other Secured Parties;
and
(k) Liens securing the Centre Senior Secured Notes at a
level equal to, and on par with, the New Revolving Notes and the Senior
Secured Notes and Liens securing the Centre Junior Secured Notes at a
level equal to, and on par with, the Junior Secured Notes and other
obligations of the Loan Parties arising under the Centre Loan
Agreement.
SECTION 6.03. Sale and Lease-Back Transactions. The Borrower will
not, and will not cause or permit any of the Subsidiaries to, enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
SECTION 6.04. Investments, Loans and Advances. (a) The Borrower and
the Parent will not, and will not cause or permit any of the Subsidiaries to,
purchase, hold or acquire any Capital Stock, evidences of indebtedness or other
securities of, make or permit to exist any loans, extensions of credit or
advances to, maintain any Deposit Account or make or permit to exist any other
investment, capital contribution or other interest in, any other person, except:
(i) investments existing as of the Restructure Effective
Date, to the extent set forth on Schedule 6.04(a)(i), by the Borrower
in Wholly Owned Subsidiaries;
74
70
(ii) loans and advances made after the Restructure
Effective Date by the Borrower to Wholly Owned Subsidiaries; provided
that (A) any such loan or advance is evidenced by an Intercompany Note
pledged and delivered to the Agent on behalf of the Secured Parties
pursuant to the Security Agreement, (B) any such loan or advance to any
Wholly Owned Subsidiary shall be permitted only so long as such person
remains a Wholly Owned Subsidiary and (C) the aggregate principal
amount outstanding at any time of loans and advances (excluding
investments under clauses (iii) and (iv) of this Section 6.04(a)) made
by the Borrower after the Restructure Effective Date to Foreign
Subsidiaries shall not exceed $1,000,000;
(iii) investments by the Borrower in Wholly Owned
Subsidiaries which are Foreign Subsidiaries; provided that (A) such
investments consist of receivables for inventory transferred to such
Foreign Subsidiaries in the ordinary course of business for resale to
customers of such Foreign Subsidiaries, (B) the aggregate principal
amount of such receivables outstanding at any time shall not exceed
$5,000,000, (C) any such receivable shall be discharged, released or
cancelled only to the extent that the Borrower has received payment of
the amount due from the applicable Foreign Subsidiary, (D) the Borrower
shall receive payment of a corresponding portion of any such receivable
for any goods transferred to any Foreign Subsidiary within 10 Business
Days after receipt by such Foreign Subsidiary of payment from its
customer for such goods and (E) the original amount of any such
receivable is based on the Borrower's reasonable, good faith estimate
of the amount that would be paid in an arms-length transaction with an
independent, unrelated third party;
(iv) investments by the Borrower in Wholly Owned
Subsidiaries which are Foreign Subsidiaries; provided that (A) such
investments consist of receivables for parts transferred to such
Foreign Subsidiaries in the ordinary course of business for use in
manufacturing and assembly by such Foreign Subsidiaries, (B) the
aggregate principal amount of such receivables to any Foreign
Subsidiary outstanding at any time is less than the aggregate principal
amount of accounts payable by the Borrower to such Foreign Subsidiary
for finished products acquired by the Borrower in the ordinary course
of business, (C) the amount of any such receivable or payable is based
on the Borrower's reasonable, good faith estimate of the amount that
would be paid in an arms'-length transaction with an independent,
unrelated third party and (D) all such Foreign Subsidiaries shall have
executed and delivered to the Agent an Acknowledgement of Subordination
substantially in the form of Exhibit L hereto;
(v) Cash Equivalents, so long as no Event of Default has
occurred and is continuing;
(vi) (A) trade accounts receivable (and related notes and
instruments) arising in the ordinary course of business consistent with
past practices and (B) notes receivable in the aggregate principal
amount of up to $250,000 outstanding at any time constituting seller
financing for sales made by the Borrower and the Subsidiaries in the
ordinary course of business consistent with past practices, provided
that any such notes shall be pledged to the Agent on behalf of the
Secured Parties pursuant to the Security Agreement; and
75
71
(vii) advances to employees for moving and travel expenses
in the ordinary course of business consistent with past practices; and
(b) Except as herein expressly permitted or contemplated, the
Borrower and the Parent shall not issue, sell, transfer, lease or otherwise
dispose of any of its Capital Stock to, or accept any capital contribution from,
any person, other than, in the case of the Borrower, the Parent or permit to
exist any rights, warrants or options exercisable for, or any securities
exchangeable for or convertible into, any shares of common stock of the Borrower
or the Parent, except in the case of the Parent, those described on Schedule
6.04(b); provided, the Parent may issue the Lender Preferred Stock and the
Centre New Preferred and may issue Preferred Stock to pay its dividend in kind
on the Lender Preferred Stock and the Centre New Preferred.
SECTION 6.05. Mergers, Acquisitions and Other Transactions. (a) The
Borrower and the Parent will not, and will not cause or permit any of the
Subsidiaries to, (i) merge into or consolidate with any other person, (ii)
permit any other person to merge into or consolidate with it, (iii) sell,
transfer, lease or otherwise dispose of (in one transaction or in a series of
transactions) all or any part of its assets (whether now owned or hereafter
acquired) or (iv) issue, sell, transfer, lease or otherwise dispose of any
Capital Stock of any Subsidiary to, or permit any Subsidiary to accept any
capital contribution from, any person, except that:
(A) the Borrower and any of the Subsidiaries may sell
inventory in the ordinary course of business for fair value and on an
arms-length basis;
(B) the Borrower and any of the Subsidiaries may sell
damaged, worn out or obsolete tangible assets in the ordinary course of
business and in a commercially reasonable manner, so long as the Net
Cash Proceeds of any such disposition are applied as required by
Section 2.12(e);
(C) the foregoing shall not be deemed violated by any
Casualty or Condemnation affecting assets of the Borrower or any
Subsidiary, so long as the Net Cash Proceeds thereof are applied as
required by Section 2.12(e);
(D) the Borrower or any Subsidiary may liquidate Cash
Equivalents for its account;
(E) Intentionally deleted.
(F) the Borrower or any of the Subsidiaries may transfer
assets consisting of plant, property and equipment (in accordance with
GAAP) to the Borrower or any Wholly Owned Subsidiary which is a
Domestic Subsidiary, provided that (I) the Borrower and such Domestic
Subsidiary have complied with all applicable provisions of Section 5.12
and (II) the fair market value of all property disposed of by the
Borrower pursuant to this clause (F) does not exceed $500,000 in the
aggregate in any fiscal year;
(G) the Borrower or any of the Subsidiaries may (I)
transfer inventory to Foreign Subsidiaries in the ordinary course of
business for resale to customers of such Foreign Subsidiaries as
contemplated by, and subject to the limitations set forth in, clause
(iii) of Section 6.04(a) and (II) transfer parts to Foreign
Subsidiaries in the ordinary
76
72
course of business for use in manufacturing and assembly by such
Foreign Subsidiaries as contemplated by, and subject to the limitations
set forth in, clause (iv) of Section 6.04(a); and
(b) The Borrower and the Parent will not, and will not cause or
permit any of the Subsidiaries to, purchase, lease or otherwise acquire (in one
transaction or a series of transactions) all or any substantial part of the
assets of any other person, except that the Borrower and any of the Subsidiaries
may purchase inventory in the ordinary course of business.
SECTION 6.06. Dividends, Distributions and Other Restricted
Payments. The Borrower and the Parent will not, and will not cause or permit any
of the Subsidiaries to, (a) declare or pay, directly or indirectly, any dividend
or make any other distribution (by reduction of capital or otherwise and
including any tax sharing or indemnification payments), whether in cash,
property, securities or a combination thereof, with respect to any Capital Stock
of the Borrower, the Parent or any of the Subsidiaries, except on the Lender
Preferred Stock and the Centre New Preferred Stock (b) directly or indirectly
redeem, purchase, retire or otherwise acquire for value, any Capital Stock of
the Borrower, the Parent or any of the Subsidiaries whether such acquisition is
made at the option of the Borrower, the Parent or such Subsidiary or at the
option of the holder of such Capital Stock and whether or not such acquisition
is required under the terms and conditions applicable to such Capital Stock or
set aside any amount for any such purpose, (c) release, cancel, compromise or
forgive in whole or in part the Indebtedness evidenced by the Intercompany Notes
or (d) directly or indirectly redeem, purchase, prepay, retire, defease or
otherwise acquire for value any Indebtedness, whether such acquisition is made
at the option of the Borrower, the Parent or such Subsidiary or at the option of
the holder of such Indebtedness and whether or not such acquisition is required
under the terms and conditions applicable to such Indebtedness, or set aside any
amount for any such purpose, in each case other than Obligations and the
obligations under the Centre Loan Agreement, on a pro-rata basis, provided,
however, that:
(i) any Subsidiary may declare and pay dividends or make
other distributions directly or indirectly to the Borrower; and
(ii) the Borrower and the Subsidiaries may repay the
principal of any Indebtedness in accordance with the scheduled
amortization thereof.
SECTION 6.07. Impairment of Security Interests. The Borrower will
not, and will not permit any of the Subsidiaries to, take or omit to take any
action, which action or omission might or would have the result of materially
impairing the security interests in favor of the Agent on behalf of the Secured
Parties with respect to the Collateral, and the Borrower will not, and will not
permit any of the Subsidiaries to, grant to any person (other than the Agent on
behalf of the Secured Parties pursuant to the Loan Documents) any interest
whatsoever in the Collateral, except for Liens permitted under Section 6.02.
SECTION 6.08. Limitation on Restrictions on Subsidiary Dividends,
etc. The Borrower will not, and will not cause or permit any of the Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction or any restriction in
its articles of incorporation, bylaws or comparable governing instruments on the
ability of any Subsidiary to (a) pay dividends or make any other distributions
77
73
on or in respect of its Capital Stock, or pay any indebtedness owed to the
Borrower or any Subsidiary, (b) make loans or advances to the Borrower or any
Subsidiary or (c) transfer any of its properties or assets to the Borrower or
any Subsidiary, except for such encumbrances or restrictions existing under or
by reason of (i) customary non-assignment provisions in any lease governing a
leasehold interest, and (ii) this Amended Agreement and the Collateral
Documents.
SECTION 6.09. No Other Negative Pledges. The Borrower will not, and
will not cause or permit any of the Subsidiaries to, directly or indirectly,
enter into any agreement prohibiting the creation or assumption of any Lien upon
the properties or assets of the Borrower or any Subsidiary, whether now owned or
hereafter acquired, or requiring an obligation to be secured if some other
obligation is secured, except for this Amended Agreement.
SECTION 6.10. Transactions with Affiliates. (a) The Borrower will
not, and will not cause or permit any of the Subsidiaries to, sell or transfer
any property or assets to, or purchase or acquire any property or assets from,
or otherwise enter into or maintain any other transactions with, (i) the
Sponsor, the Parent or (ii) any Affiliate of the Borrower, the Parent or the
Sponsor, except that so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower or any Subsidiary may enter into any of
the foregoing transactions in the ordinary course of business at prices and on
terms and conditions that are (x) set forth in writing and (y) as favorable to
the Borrower or such Subsidiary as would be obtainable at the time in a
comparable transaction on an arm's-length basis from an independent, unrelated
third party. The provisions of this Section 6.10(a) shall not prohibit (A) any
payment expressly permitted under Section 6.04 or 6.06, (B) any transaction
entered into and maintained among the Borrower and any Wholly Owned Subsidiaries
or among Wholly Owned Subsidiaries, (C) payment of compensation to employees in
the ordinary course of business and grants of stock options to employees and
directors in the ordinary course of business, (D) the payment of fees to the
members of the board of directors of the Parent of up to $20,000 per director
per year, (E) reimbursement of reasonable out-of-pocket expenses of Centre
Partners Management LLC, (F) the Agency Agreement and transactions pursuant to
the Agency Agreement and (G) transactions with the Centre Entities specifically
contemplated by this Amended Agreement.
(b) Intentionally deleted.
SECTION 6.11. Nature of Business. (a) The Borrower will not, and
will not cause or permit any of the Subsidiaries to, engage at any time in any
business or business activity other than the business conducted by it as of the
Restructure Effective Date and business activities reasonably incidental
thereto.
(b) The Parent will not engage in any activity (including any
merger, consolidation or sale of assets), issue any securities, incur any
Indebtedness, incur any other material liability or create or permit to exist
any Lien on its assets, other than the ownership of the common stock of the
Borrower and related de minimis activities incidental thereto. Notwithstanding
the foregoing sentence, the Parent may, so long as any such action is not
prohibited by any other applicable provision of this Amended Agreement, (i)
engage in any activity incidental to the maintenance of the corporate existence
of the Parent and compliance with applicable law, (ii) enter into and perform
the obligations of the Parent under the Parent Guarantee Agreement, and the
Pledge Agreement (iii) enter into (or issue, as applicable), perform the
obligations of the Parent under and exercise the rights of the Parent under
stock options exercisable for Capital Stock of the
78
74
Parent granted to employees of the Borrower and directors of the Borrower or the
Parent and other customary participants or an employee stock option plan, an
employee stock compensation plan or an employee stock purchase plan established
for the benefit of employees of the Borrower and directors of the Borrower or
the Parent and other customary participants, (iv) issue additional shares of
Capital Stock of the Parent or receive any capital contribution, so long as 100%
of the net cash proceeds, if any, of any such issuance or contribution are
contributed by the Parent to the capital of the Borrower, (v) issue the Lender
Preferred Stock, the Lender Common Stock ,the Centre Converted Class A Common,
the Centre New Class A Common, the Centre New Preferred, the Centre Senior
Secured Notes and the Centre Junior Secured Notes, and issue stock pursuant to
the exercise of the warrants described on Schedule 3.21(b) and other issuances
of equity securities contemplated by this Amended Agreement, and (vi) administer
on behalf of the Borrower, pursuant to the Agency Agreement (which shall be
assigned to the Agent on behalf of the Secured Parties), any nontransferable
assets which remain owned by the Parent.
SECTION 6.12. Sales of Receivables. The Borrower will not, and will
not cause or permit any of the Subsidiaries to, sell with recourse, discount or
otherwise sell or dispose of its notes or accounts receivable.
SECTION 6.13. Certain Amendments. The Parent and the Borrower will
not, and will not cause or permit any of its subsidiaries to, enter into any
amendment, modification or waiver that is adverse in any respect to the Lenders
to the Certificate of Incorporation, By-laws or comparable governing instruments
of any of them. The Borrower will promptly provide the Lenders with copies of
all proposed amendments to the foregoing documents and instruments.
SECTION 6.14. Capital Expenditures. After October 1, 2000, the
Borrower and the Parent will not permit (a) Capital Expenditures of the Parent,
on a consolidated basis for any fiscal year of the Parent to be more than 20 %
of the EBITDA of the Parent, on a consolidated basis, for such fiscal year and
(b) Capital Expenditures of the Parent, on a consolidated basis, during any such
fiscal year, to exceed $100,000, in the aggregate, by the end of the first
fiscal quarter of such year, to exceed $200,000, in the aggregate, by the end of
the second fiscal quarter of such year, and to exceed $300,000, in the
aggregate, by the end of the third fiscal quarter of such year, except that for
each of the quarters ending December 31, 2000 and March 31, 2001, consolidated
Capital Expenditures may be up to $100,000 per quarter.
SECTION 6.15. Interest Coverage. After January 1, 2001, the
Borrower and the Parent will not permit the ratio of (a) EBITDA of the Parent,
on a consolidated basis, during any quarter (or the average if more than one
quarter is included) plus Capital Expenditures (or the average if more than one
quarter is included) of the Parent, on a consolidated basis, during such quarter
or quarters, to (b) the sum of the interest on the Senior Secured Loans accruing
during such quarter plus the Capital Expenditures of the Parent, on a
consolidated basis, during such quarter (or, in each case, the average if more
than one quarter is included), to be less than (i) 1.00 to 1.00 for the quarter
ending on March 31, 2001; (ii) 1.00 to 1.00 for the quarter ending on June 30,
2001 and the immediately preceding quarter; (iii) 1.00 to 1.00 for the quarter
ending on September 30, 2001 and the immediately preceding two quarters; (iv)
1.05 to 1.00 for the quarter ending December 31, 2001 and the immediately
preceding three quarters; (v) 1.15 to 1.00 for the quarter ending March 31, 2002
and the immediately preceding three quarters; (vi) 1.20 to 1.00 for the quarter
ending June 30, 2002 and the immediately preceding three quarters;
79
75
(vii) 1.25 to 1.00 for the quarter ending September 30, 2002 and the immediately
preceding three quarters; and (viii) 1.30 to 1.00 for each quarter thereafter
together with the three quarters immediately preceding such quarter.
ARTICLE VII
EVENTS OF DEFAULT
In case of the happening of any of the following events ("Events of
Default"):
(a) default shall be made in the payment of any principal
of any Loan or any reimbursement obligation in respect of a New Letter
of Credit when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(b) default shall be made in the payment of any interest
on any Loan or any fee or any other amount (other than an amount
referred to in paragraph (a) above) due under any Loan Document, when
and as the same shall become due and payable, and such default shall
continue unremedied for a period of five (5) Business Days;
(c) default shall be made in the due observance or
performance by the Borrower or any other Loan Party of any covenant,
condition or agreement contained in Section 5.01, 5.02, 5.04, 5.05,
5.08, 5.09 5.10, 5.11 or 5.13 or in Article VI and such default shall
continue unremedied for a period of seven (7) Business Days after such
default becomes known to a Responsible Officer of the Borrower or such
other Loan Party;
(d) default shall be made in the due observance or
performance by the Borrower , the Parent or any other Loan Party of any
covenant, condition or agreement contained herein and in any other Loan
Document (other than those specified in paragraphs (a), (b) and (c)
above and such default shall continue unremedied for a period of thirty
(30) days after such default becomes known to a Responsible Officer of
the Borrower or such other Loan Party;
(e) any representation or warranty made or deemed made in
or in connection with any Loan Document or the extensions of credit
hereunder, or any representation, warranty, statement or information
contained in any report, certificate, financial statement or other
instrument furnished in connection with or pursuant to any Loan
Document, shall prove to have been false or misleading in any material
respect when so made, deemed made or furnished;
(f) the Borrower, any Subsidiary or the Parent shall (i)
fail to pay any principal or interest, regardless of amount, due in
respect of any Indebtedness in a principal amount in excess of
$250,000, when and as the same shall become due and payable or (ii)
fail to observe or perform any other term, covenant, condition or
agreement contained in any agreement or instrument evidencing or
governing any such Indebtedness if the effect of such failure is to
cause, or to permit the holder or holders of such Indebtedness or a
trustee on its or their behalf to cause, with or without the giving of
80
76
notice or the lapse of time or both, such Indebtedness to become due
prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower, any
Subsidiary or the Parent, or of a substantial part of its property or
assets, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower, any Subsidiary or the Parent, or for a
substantial part of its property or assets, or (iii) the winding-up or
liquidation of the Borrower, any Subsidiary or the Parent; and such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Borrower, any Subsidiary or the Parent shall (i)
voluntarily commence any proceeding or file any petition seeking relief
under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner,
any proceeding or the filing of any petition described in paragraph (g)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
such party or for a substantial part of its property or assets, (iv)
file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take any action for the purpose of effecting any of the
foregoing;
(i) one or more judgments or orders for the payment of
money in an aggregate amount in excess of $50,000 shall be rendered
against the Borrower, any Subsidiary or the Parent or any combination
thereof and the same shall remain undischarged for a period of 45 days
during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to levy upon assets or
properties of the Borrower, any Subsidiary or the Parent to enforce any
such judgment;
(j) (i) any person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan, or any Lien shall arise on the assets of the
Borrower or any Commonly Controlled Entity in favor of the PBGC or a
Plan, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA (other than in a standard termination
within the meaning of Section 4041(b) of ERISA), (v) the Borrower or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the
81
77
termination, reorganization or insolvency of (within the meaning of
such terms as used in ERISA), a Multiemployer Plan or (vi) any other
event or condition shall occur or exist with respect to a Plan; and, in
each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could
reasonably be expected to result in liability of the Borrower, the
Subsidiaries and the Parent in an aggregate amount exceeding $2,000,000
or require payments by the Borrower, the Subsidiaries and the Parent
exceeding $1.000,000 in any year;
(k) any Lien purported to be created by any Collateral
Document shall cease to be, or shall for any reason be asserted by the
Borrower or any other Loan Party not to be, a valid, perfected, first
priority Lien on the securities, properties or assets covered thereby,
except as provided in the Centre Intercreditor Agreement and as
priority may be affected by Liens permitted under Section 6.02 and
except for releases of Collateral in accordance with all applicable
provisions of this Amended Agreement and the Collateral Documents;
(l) any Loan Document or any material provision of any
Loan Document shall be declared by any Governmental Authority to be
invalid or unenforceable in whole or in part or shall for any reason
not be, or shall be asserted by the Borrower or any other Loan Party
not to be, in full force and effect and enforceable in accordance with
its terms;
(m) any adverse change in the material agreements or
relationships of the Parent, the Borrower and the Subsidiaries shall
occur and such event or condition, together with all other such events
or conditions, if any, could, in light of all the then existing
circumstances, reasonably be expected to have a Material Adverse
Effect;
(n) any Material Intellectual Property or any material
license relating thereto shall be invalid or unenforceable in whole or
in part or shall for any reason not be in full force and effect and
enforceable by the Borrower, the Subsidiaries and the Parent or shall
infringe the rights of any other person or any other adverse change in
the Material Intellectual Property rights of the Borrower, the
Subsidiaries and the Parent shall occur and such event or condition,
together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect;
(o) either (i) the Borrower, any Subsidiary or the Parent
shall be liable, whether directly, indirectly through required
indemnification of any person or otherwise, for the costs of
investigation and/or remediation of any Hazardous Material originating
from or affecting property or properties, whether or not owned, leased
or operated by the Borrower, any Subsidiary or the Parent, which
liability, together with all other such liabilities, could reasonably
be expected to exceed $2,000,000 or require payments exceeding
$1,000,000 in any year or (ii) any Federal, state, regional, local or
other environmental regulatory agency or authority shall commence an
investigation or take any other action that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect;
(p) the shares of common stock of the Borrower pledged to
the Agent on behalf of the Lenders pursuant to the Collateral Documents
shall cease to constitute
82
78
100% of the shares of the Capital Stock of the Borrower (on a fully
diluted basis) or shall cease to constitute 100% of the Total Voting
Power of the Borrower; or
(q) there shall occur any Change in Control;
then, and in every such event, and at any time thereafter during the continuance
of such event, the Agent may, and at the request of the Required Lenders shall,
take one or more of the following actions, at the same or different times: (i)
by notice to the Borrower terminate the New Revolving Credit Commitments and any
obligation to issue New Letters of Credit, if any and they shall immediately
terminate; (ii) by notice to the Borrower declare the Loans then outstanding to
be forthwith due and payable (in whole or, in the sole discretion of the
Required Lenders, from time to time in part, provided that any such partial
acceleration shall be made pro rata based on the outstanding principal amount of
the Loans ), whereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and any unpaid accrued fees and
all other liabilities of the Borrower accrued hereunder or under any other Loan
Document, shall thereupon become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding; (iii) require cash
collateral as contemplated by Section 2.22(l) in an amount not exceeding the
aggregate undrawn amount of all outstanding Letters of Credit plus unreimbursed
Letter of Credit Disbursements; (iv) exercise any remedies available under the
Guarantee Agreements, the Collateral Documents or otherwise in accordance with
the terms of the Centre Intercreditor Agreement; or (v) any combination of the
foregoing; provided that in the case of any of the Events of Default with
respect to the Borrower described in paragraph (g) or (h) above the New
Revolving Credit Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and any
unpaid accrued fees and all other liabilities of the Borrower accrued hereunder
or under any other Loan Document, shall automatically become due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding.
ARTICLE VIII
THE AGENT AND ISSUING BANK
SECTION 8.01. Appointment and Authorization. (a) In order to
expedite the transactions contemplated by this Amended Agreement, Bank of
America, N.A. is hereby appointed to act as Agent and Issuing Bank on behalf of
the Lenders. Each of the Lenders, and each subsequent holder of any Note by its
acceptance thereof, hereby irrevocably appoints and authorizes the Agent and the
Issuing Bank to take such actions as agent on behalf of such Lender or holder
and to exercise such powers as are specifically delegated to the Agent or the
Issuing Bank, as the case may be, by the terms and provisions hereof and of the
other Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
(b) Without hereby limiting any implied authority, the Agent is
hereby expressly authorized by the Lenders to, and hereby agrees that at the
direction of the Required Lenders it shall: (i) receive on behalf of the Lenders
all payments of principal of and interest on the Loans and all other amounts due
to the Lenders hereunder, and promptly distribute to each Lender its
83
79
proper share of each payment so received; (ii) give notice on behalf of each of
the Lenders to the Borrower of any Event of Default specified in this Amended
Agreement of which the Agent has actual knowledge acquired in connection with
its agency hereunder; (iii) give notice to the Lenders of any Event of Default
specified in this Amended Agreement of which the Agent has actual knowledge
acquired in connection with its agency hereunder; and (iv) distribute to each
Lender copies of all notices, financial statements and other materials delivered
by the Borrower pursuant to this Amended Agreement promptly as received by the
Agent. Without limiting the generality of the foregoing, the Agent is hereby
expressly authorized to execute any and all documents (including releases) with
respect to the Collateral and the rights of the Secured Parties with respect
thereto, as contemplated by and in accordance with the provisions of this
Amended Agreement, the Centre Intercreditor Agreement and the Collateral
Documents.
SECTION 8.02. Liability of Agent. Neither the Agent, the Issuing
Bank, nor any of their respective directors, officers, employees or agents,
shall be liable as such for any action taken or omitted to be taken by any of
them, except for such party's own gross negligence or willful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrower or
any other Loan Party of any of the terms, conditions, covenants or agreements
contained in any Loan Document. Neither the Agent nor the Issuing Bank shall be
responsible to the Lenders or the holders of the Notes for the due execution,
genuineness, validity, enforceability or effectiveness of this Amended
Agreement, the Notes or any other Loan Documents or other instruments or
agreements. Each of the Agent and the Issuing Bank may deem and treat the payee
of any Note as the owner thereof for all purposes hereof until it shall have
received from the payee of such Note notice, given as provided herein, of the
transfer thereof in compliance with Section 9.04. Each of the Agent and the
Issuing Bank shall in all cases be fully protected in acting, or refraining from
acting, in accordance with written instructions signed by the Required Lenders
and, except as otherwise specifically provided herein, such instructions and any
action or inaction pursuant thereto shall be binding on all the Lenders and each
subsequent holder of any Note. The Agent, the Issuing Bank and the Required
Lenders shall, in the absence of knowledge to the contrary, be entitled to rely
on any instrument or document believed by it in good faith to be genuine and
correct and to have been signed or sent by the proper person or persons. Neither
the Agent, the Issuing Bank nor any of their respective directors, officers,
employees or agents, shall have any responsibility to the Borrower or any other
Loan Party on account of the failure of or delay in performance or breach by any
Lender of any of its obligations hereunder or to any Lender on account of the
failure of or delay in performance or breach by any other Lender or the Borrower
or any other Loan Party of any of their respective obligations hereunder or
under any other Loan Document or in connection herewith or therewith. The Agent
and the Issuing Bank may execute any and all duties hereunder by or through
agents or employees, shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by it with respect to
all matters arising hereunder and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts.
SECTION 8.03. Action by Agent. The Lenders hereby acknowledge that
neither the Agent nor the Issuing Bank shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Amended Agreement unless it shall be
84
80
requested in writing to do so by the Required Lenders. The obligations of the
Agent and the Issuing Bank under the Loan Documents are only those expressly set
forth herein and therein. Without limiting the generality of the foregoing, the
Agent shall not be required to take any action with respect to any Default or
Event of Default, except as expressly provided in Article VII.
SECTION 8.04. Successor Agents. Subject to the appointment and
acceptance of a successor, the Agent and the Issuing Bank (except, in the case
of the Issuing Bank, in respect of Letters of Credit issued by it) may resign at
any time by notifying the Lenders and the Borrower. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor, subject to
approval by the Borrower (which shall not be unreasonably withheld). If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Agent or Issuing
Bank, as the case may be, gives notice of its resignation, then the retiring
Agent or Issuing Bank, as the case may be, on behalf of the Lenders, shall
appoint a successor Agent or Issuing Bank, as applicable, which shall be a
commercial bank organized or licensed under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $500,000,000 or an Affiliate of any such bank. Upon the acceptance of any
appointment as an Agent or Issuing Bank, as the case may be, hereunder by a
successor bank, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent or Issuing Bank and
the retiring Agent or Issuing Bank shall be discharged from its duties and
obligations hereunder. After the resignation of the Agent or the Issuing Bank,
as the case may be, hereunder, the provisions of this Article and Section 9.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent or Issuing Bank.
SECTION 8.05. Agent and Affiliate. With respect to the Loans made
by it hereunder, the Letters of Credit issued by it hereunder and the Notes
issued to it, each of the Agent and the Issuing Bank, each in its individual
capacity and not as the Agent or the Issuing Bank, as the case may be, shall
have the same rights and powers as any other Lender and may exercise the same as
though it were not the Agent or the Issuing Bank. Each of the Agent and the
Issuing Bank (and its Affiliates) may accept deposits from, lend money to and
generally engage in any kind of business and transactions with the Borrower or
any Subsidiary or other Affiliate thereof as if it were not the Agent or the
Issuing Bank (or such Affiliate thereof).
SECTION 8.06. Indemnification. (a) Each Lender agrees to reimburse
the Agent and each Lender agrees to reimburse the Issuing Bank, in each case, on
demand, in the amount of its pro rata share (as determined under Section 2.17)
of any expenses incurred for the benefit of the applicable Lenders by the Agent
or the Issuing Bank, as the case may be, including counsel fees and compensation
of agents and employees paid for services rendered on behalf of such Lenders,
which shall not have been reimbursed by the Borrower and (b) each Lender agrees
to indemnify and hold harmless the Agent and any of its respective directors,
officers, employees or agents and each Lender agrees to indemnify and hold
harmless the Issuing Bank and any of its respective directors, officers,
employees or agents, in each case, on demand, in the amount of such pro rata
share, from and against any and all liabilities, taxes, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against it in its capacity as the Agent or the Issuing Bank, as the
case may be, or either of them in any way relating to or arising
85
81
out of this Amended Agreement or any other Loan Document or any action taken or
omitted by it or any of them under this Amended Agreement or any other such Loan
Document, to the extent the same shall not have been reimbursed by the Borrower;
provided that no Lender shall be liable to the Agent or the Issuing Bank for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the gross
negligence or willful misconduct of the Agent, the Issuing Bank or any of their
respective directors, officers, employees or agents.
SECTION 8.07. Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent, the Issuing Bank or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Amended Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent, the Issuing Bank or any other Lender and based
on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Amended Agreement or any other Loan Document, any
related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy as
follows:
(a) if to the Parent or the Borrower, to it at 0000
XxXxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000-0000, Attention of Xxxx X.
Xxxxxxx (Telecopy No. (000) 000-0000), with copies to (i) Centre
Partners Management LLC, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, XX 00000,
Attention of Xxxxx Xxxxxxxxx (Telecopy No. (000) 000-0000) and (ii)
Sidley & Austin, Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, XX 00000, Attention
of Xxxxx Xxxxx (Telecopy No. (000) 000-0000);
(b) if to the Agent or the Issuing Bank, to it at Bank of
America, N.A., Special Asset Group-East, Global Corporate & Investment
Banking, Bank of America Plaza, NC 1-002-31-31, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, XX 00000-0000, Attention of Xxxxxxxx Xxxxxxxx (Telecopy No.
(000) 000-0000), with a copy to McGuire, Woods, Battle & Xxxxxx LLP, at
Bank of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000,
Xxxxxxxxx, XX 00000-0000, Attention of Xxxxxx X. Xxxxxxxx (Telecopy No.
(000) 000-0000); and
(c) if to a Lender, to it at its address (or telecopy
number) set forth on the signature pages hereto, or in the Assignment
and Acceptance pursuant to which such Lender shall have become a party
hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Amended Agreement shall be deemed to have been given
on the date of receipt
86
82
if delivered by hand or overnight courier service or sent by telecopy or on the
date five Business Days after dispatch by certified or registered mail if
mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower or the Parent herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Amended Agreement or any other Loan Document shall be
considered to have been relied upon by the Lenders, the Agent and the Issuing
Bank and shall survive the making by the Lenders of the Loans, the execution and
delivery to the Lenders of the Notes evidencing such Loans, and the issuance of
the Letters of Credit, regardless of any investigation made by the Lenders, the
Agent or the Issuing Bank or on their behalf, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan, any
fee, any Letter of Credit Disbursement or any other amount payable under this
Amended Agreement or any other Loan Document is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the New Revolving Credit
Commitments have not been terminated. The provisions of Section 2.14, 2.16, 2.20
and 9.05 shall remain operative and in full force and effect regardless of the
expiration of the term of this Amended Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
expiration of the New Revolving Credit Commitments, the expiration of any Letter
of Credit, the invalidity or unenforceability of any term or provision of this
Amended Agreement or any other Loan Document or any investigation made by or on
behalf of the Agent, the Issuing Bank or any Lender.
SECTION 9.03. Binding Effect. This Amended Agreement shall become
effective as of the Restructure Effective Date.
SECTION 9.04. Successors and Assigns. (a) All covenants, promises
and agreements by or on behalf of the Borrower, the Parent, the Agent, the
Issuing Bank or the Lenders that are contained in this Amended Agreement shall
be binding upon and inure to the benefit of their respective permitted
successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Amended Agreement
(including all or a portion of its New Revolving Credit Commitment, the Loans at
the time owing to it, the Notes held by it and the participations in Letters of
Credit held by it); provided, however, that (i) except in the case of an
assignment to a Lender or an Affiliate of a Lender, the Agent and, in the case
of an assignment of a New Revolving Credit Commitment, the Issuing Bank must
give its prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of a Lender, the sum of (A) the principal amount of the outstanding
Loans subject to each such assignment and (B) the unused amount of the New
Revolving Credit Commitment of the assigning Lender subject to such assignment
(in each case determined as of the date the Assignment and Acceptance with
respect to such assignment is delivered to the Agent) shall not be less than the
lesser of (I) $5,000,000 and (II) the entire remaining amount of the outstanding
Loans and unused New Revolving Credit Commitment of such Lender, (iii) the
parties to each such assignment (including, but not limited to, an assignment by
a Lender to another Lender) shall execute and deliver to the Agent an Assignment
and Acceptance, together with the Note or Notes subject to such assignment and a
processing
87
83
and recordation fee of $3,500 and (iv) the assignee, if it shall not be a Lender
or an Affiliate thereof, shall deliver to the Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to Section 9.04(e), from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution thereof
(unless the Agent shall otherwise agree), (A) the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Amended
Agreement and (B) the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Amended Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Amended Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.16, 2.20 and 9.05, as well as to any fees accrued for its account to the
effective date of the Assignment and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim arising
in respect of any action by the assigning Lender; (ii) except as set forth in
clause (i) above, such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with this Amended Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Amended Agreement, any other Loan Document or any other instrument
or document furnished pursuant hereto, or the financial condition of the
Borrower or any other Loan Party or the performance or observance by the
Borrower or any other Loan Party of any of its obligations under this Amended
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Amended Agreement and the other
Loan Documents, together with copies of the most recent Required Financial
Statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently, and without reliance upon the
Agent, the Issuing Bank, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Amended Agreement; (vi) such assignee appoints and authorizes the Agent and
the Issuing Bank to exercise such powers under this Amended Agreement as are
delegated to such party by the terms hereof, together with such powers as are
reasonably incidental hereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Amended Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at one of its offices in Charlotte,
North Carolina, a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
New Revolving Credit Commitments of, and
88
84
principal amount of the Loans owing to, each Lender pursuant to the terms hereof
from time to time (the "Register"). The entries in the Register shall be
conclusive in the absence of manifest error and the Borrower, the Agent and the
Lenders may treat each person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Amended
Agreement. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with the Note or Notes
subject to such assignment, an Administrative Questionnaire completed in respect
of the assignee (unless the assignee shall already be a Lender hereunder or
shall be an Affiliate of a Lender), the processing and recordation fee referred
to in Section 9.04(b) and, if required, the written consent of the Borrower, the
Agent and the Issuing Bank to such assignment, the Agent shall (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Issuing Bank, the Lenders
and the Borrower. Within five Business Days after receipt of notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for the surrendered Note or Notes, a new Note or Notes payable to the
order of such assignee in a principal amount equal to the applicable portion
thereof (and the corresponding New Revolving Credit Commitment, if any) assumed
by it pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained any portion of such Note or Notes (and such New Revolving Credit
Commitment, if any), a new Note or Notes payable to the order of such assigning
Lender in a principal amount equal to the applicable portion of such Note or
Notes (and such New Revolving Credit Commitment, if any) retained by it. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note; such new Note or Notes
shall be dated the date of the surrendered Notes which they replace and shall
otherwise be in substantially the form of Exhibits A-1 through A-3 hereto, as
applicable. Cancelled Notes shall be returned to the Borrower.
(f) Each Lender may, without the consent of the Borrower, the
Agent or the Issuing Bank, sell participations in all or a portion of its rights
and obligations under this Amended Agreement (including all or a portion of its
New Revolving Credit Commitment, the Loans owing to it, the Notes held by it and
the participations in Letters of Credit held by it) to one or more participants;
provided, however, that (i) such Lender's obligations under this Amended
Agreement shall remain unchanged, (ii) the sum of (A) the principal amount of
the outstanding Loans subject to such participation and (B) the unused amount of
the New Revolving Credit Commitment of the Lender subject to such participation
shall be not less than the lesser of (I) $5,000,000 and (II) the entire
remaining amount of the outstanding Loans and unused New Revolving Credit
Commitment of such Lender, (iii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iv) the
participating banks or other entities shall be entitled to the benefit of the
cost protection and indemnity provisions contained in Sections 2.14, 2.16 and
2.20 to the same extent as if they were Lenders (except that no participant
shall be entitled to claim any amount greater than its pro rata share of the
amount that could have been claimed by the Lender from which it acquired its
participation) and (v) the Borrower, the Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with the Lender from which
the participant acquired its interest in connection with such Lender's rights
and obligations under this Amended Agreement, and such Lender shall retain the
89
85
sole right to enforce the obligations of the Borrower relating to the Loans and
to approve any amendment, modification or waiver of any provision of this
Amended Agreement (other than amendments, modifications or waivers decreasing
any fees payable hereunder or the amount of principal of or the rate at which
interest is payable on the Loans, extending any scheduled principal payment date
or date fixed for the payment of interest on the Loans or increasing or
extending the New Revolving Credit Commitments).
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Borrower or any of the other Loan
Parties furnished to such Lender by or on behalf of the Borrower or any of the
other Loan Parties.
(h) Assignments and participations pursuant to this Section 9.04
need not be pro rata among the Facilities.
(i) Any Lender may at any time assign all or any portion of its
rights under this Amended Agreement and the Notes issued to it to a Federal
Reserve Bank to secure extensions of credit by such Federal Reserve Bank to such
Lender; provided that no such assignment shall release a Lender from any of its
obligations hereunder or substitute any such Bank for such Lender as a party
hereto.
(j) Neither the Borrower nor the Parent shall assign or delegate
any of its rights or duties hereunder or any interest herein (whether
voluntarily, by operation of law or otherwise). Any purported assignment or
delegation in violation of the foregoing shall be void.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Agent or the Issuing Bank
in connection with the preparation, execution and administration of this Amended
Agreement and the other Loan Documents, the administration of the Facilities or
in connection with any amendment, modification or waiver of the provisions
hereof or thereof and the Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Agent, the Issuing Bank or any Lender in connection
with the enforcement or protection of the rights of the Agent, the Issuing Bank
and the Lenders under this Amended Agreement and the other Loan Documents or in
connection with the Loans made, the Notes issued hereunder or the Letters of
Credit issued hereunder, including the reasonable fees, charges and
disbursements of (i) McGuire, Woods, Battle & Xxxxxx LLP, counsel for the Agent,
and (ii) in connection with any such enforcement or protection (including any
workout or restructuring or any negotiations relating thereto), the other
counsel for the Agent, the Issuing Bank or any Lender (including the reasonable
allocated internal fees and expenses of any in-house staff counsel).
(b) The Borrower agrees to indemnify the Agent, the Issuing Bank,
the Affiliates of the Agent or Issuing Bank, the Lenders, and their respective
directors, officers, employees, agents and Controlling persons (each, an
"Indemnified Party") from and against any and all losses, claims (whether valid
or not), damages and liabilities, joint or several, to which such Indemnified
Party may become subject, related to or arising out of (i) the transactions
contemplated by the Amended Agreement and the Facilities, (ii) the execution or
delivery of the Original Credit Agreement, the Amended and Restated Credit
Agreement and this Amended
90
86
Agreement or any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto or thereto of their
respective obligations hereunder or thereunder and the other transactions
contemplated hereby and thereby, (iii) the use of the Letters of Credit or the
proceeds of the Loans or (iv) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnified Party is a
party thereto. The Borrower further agrees to reimburse each Indemnified Party
for all expenses (including reasonable attorneys' fees and expenses) as they are
incurred in connection with the investigation of, preparation for or defense of
any pending or threatened claim or any action or proceeding arising therefrom.
Notwithstanding the foregoing, the obligation to indemnify any Indemnified Party
under this Section 9.05(b) shall not apply in respect of any loss, claim, damage
or liability to the extent that a court of competent jurisdiction shall have
determined by final and nonappealable judgment that such loss, claim, damage or
liability resulted from such Indemnified Party's gross negligence or willful
misconduct.
(c) The Borrower agrees to indemnify each of the Agent, the
Issuing Bank, the Lenders and the other Indemnified Parties from and against any
and all losses, claims (whether valid or not), damages and liabilities, joint or
several, to which such Indemnified Party may become subject, related to or
arising out of (i) any Federal, state, local or other statute, ordinance, order,
judgment, ruling or regulation relating to environmental pollution, regulation
or control affecting the Borrower, any Subsidiary, the Parent or its properties
or assets, (ii) any Hazardous Materials managed by the Borrower, any Subsidiary
or the Parent, (iii) any event, condition or circumstance involving
environmental protection, pollution, regulation or control affecting the
Borrower, any Subsidiary, the Parent or their properties or assets or (iv) any
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnified Party is a party thereto. The Borrower further
agrees to reimburse each Indemnified Party for all expenses (including
reasonable consultants' and attorneys' fees and expenses) as they are incurred
in connection with the investigation of, preparation for or defense of any
pending or threatened claim or any action or proceeding arising therefrom.
Notwithstanding the foregoing, the obligation to indemnify any Indemnified Party
under this Section 9.05(c) shall not apply in respect of any loss, claim, damage
or liability to the extent that a court of competent jurisdiction shall have
determined by final and nonappealable judgment that such loss, claim, damage or
liability resulted from such Indemnified Party's gross negligence or willful
misconduct.
(d) In the event that the foregoing indemnity is unavailable or
insufficient to hold an Indemnified Party harmless, then the Borrower will
contribute to amounts paid or payable by such Indemnified Party in respect of
such Indemnified Party's losses, claims, damages or liabilities in such
proportions as appropriately reflect the relative benefits received by and fault
of the Borrower and such Indemnified Party in connection with the matters as to
which such losses, claims, damages or liabilities relate and other equitable
considerations.
(e) If any action, proceeding or investigation is commenced, as to
which any Indemnified Party proposes to demand such indemnification, it shall
notify the Borrower with reasonable promptness; provided, however, that any
failure by such Indemnified Party to notify the Borrower shall not relieve the
Borrower from its obligations hereunder except to the extent the Borrower is
prejudiced thereby. The Borrower shall be entitled to assume the defense of any
such action, proceeding or investigation, including the employment of counsel
and the payment of all fees and expenses. Each Indemnified Party shall have the
right to employ separate counsel
91
87
in connection with any such action, proceeding or investigation and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be paid by such Indemnified Party, unless (i) the Borrower has failed to
assume the defense and employ counsel as provided herein, (ii) the Borrower has
agreed in writing to pay such fees and expenses of separate counsel or (iii) an
action, proceeding or investigation has been commenced against such Indemnified
Party and the Borrower and representation of both the Borrower and such
Indemnified Party by the same counsel would be inappropriate because of actual
or potential conflicts of interest between the parties (in the case of any Agent
or Lender, the existence of any such actual or potential conflict of interest to
be determined by such party, taking into account, among other things, any
relevant regulatory concerns). In the case of any circumstance described in
clause (i), (ii), or (iii) of the immediately preceding sentence, the Borrower
shall be responsible for the reasonable fees and expenses of such separate
counsel; provided, however, that the Borrower shall not in any event be required
to pay the fees and expenses of more than one separate counsel (plus appropriate
local counsel under the direction of such separate counsel) for all Indemnified
Parties, unless representation of all Indemnified Parties by the same counsel
would be inappropriate due to actual or potential conflicting interests between
such Indemnified Parties, in which case, the Borrower shall be required to pay
the fees and expenses of such additional counsel as are necessary to prevent
such conflicting interests. The Borrower shall be liable only for settlement of
any claim against an Indemnified Party made with the Borrower's written consent.
(f) The provisions of this Section 9.05 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Amended Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Amended Agreement or any other Loan Document, or any
investigation made by or on behalf of any Agent or Lender. All amounts due under
this Section 9.05 shall be payable on written demand therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final,
except deposits for the payment of payroll taxes) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
now or hereafter existing under this Amended Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Amended Agreement or such other Loan Document
and although such obligations may be unmatured. The rights of each Lender under
this Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AMENDED AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER
LOAN DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993
92
88
REVISION), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM
CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF
THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Agent, the Issuing Bank or any Lender in exercising any power or right hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Agent,
the Issuing Bank and the Lenders hereunder and under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this Amended Agreement or any
other Loan Document or consent to any departure by the Parent, the Borrower or
any other Loan Party therefrom shall in any event be effective unless the same
shall be permitted by Section 9.08(b), and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Parent, the Borrower or any other Loan Party in any case
shall entitle the Parent, the Borrower or any other Loan Party to any other or
further notice or demand in similar or other circumstances.
(b) None of this Amended Agreement, the other Loan Documents or
any provision hereof or thereof may be waived, amended or modified (and no
consent to the departure by the Parent, the Borrower or any other Loan Party
therefrom may be effective), except pursuant to an agreement or agreements in
writing entered into by the Required Lenders, the Parent and the Borrower;
provided, however, that no such agreement shall (i) decrease the principal
amount of, or extend the maturity of or date for the payment of any interest on
any Loan or any date for reimbursement of a Letter of Credit Disbursement, or
waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan or a Letter of Credit Disbursement, without the prior
written consent of each Lender affected thereby, (ii) change or extend the New
Revolving Credit Commitment or decrease the fees of any Lender without the prior
written consent of such Lender, (iii) effect any waiver of the conditions to
funding any New Revolving Credit Loan or issuance of a New Letter of Credit or
(iv) amend or modify the provisions of Section 2.17 or 9.04(j), the provisions
of this Section, or the definition of the term "Required Lenders", subordinate
any of the Liens of the Lenders on the Collateral, release any Guarantor,
release any Collateral of material value, or increase the aggregate New
Revolving Credit Commitments of the Lenders, without the prior written consent
of each Lender; provided further that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Agent or the Issuing Bank hereunder
or under any other Loan Document without the prior written consent of the Agent
or the Issuing Bank , respectively (it being understood that the requirements of
this paragraph are cumulative). Any approval of a transaction of the Parent, the
Borrower or a Subsidiary given by the Required Lenders in accordance with the
terms of this Amended Agreement shall include approval of any release of
Collateral which is a part of such transaction, notwithstanding the foregoing
restrictions, so long as substantially all of the consideration paid to the
Parent, the Borrower or the Subsidiary in connection with such transaction is
applied to the Senior Secured Loans and/or the Junior Secured Loans in
accordance with the terms of this Amended Agreement. Each Lender and each holder
of a Note shall be bound by a waiver, amendment or modification authorized by
this Section 9.08 regardless of whether its Note shall have been marked to make
reference thereto, and any consent by any
93
89
Lender or holder of a Note pursuant to this Section 9.08 shall bind any person
subsequently acquiring a Note from it, whether or not such Note shall have been
so marked.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything
herein or in the Notes to the contrary, if at any time the applicable interest
rate, together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
rate permitted by applicable law (the "Maximum Rate") which may be contracted
for, charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable under the affected Note held by
such Lender, together with all Charges payable to such Lender, shall be limited
to the Maximum Rate.
SECTION 9.10. Entire Agreement. (a) This Amended Agreement and the
other Loan Documents constitute the entire contract among the parties relative
to the subject matter hereof and thereof. Any previous agreement among the
parties with respect to the subject matter hereof and thereof is superseded by
this Amended Agreement and the other Loan Documents. Nothing in this Amended
Agreement or the other Loan Documents, expressed or implied, is intended to
confer upon any party (other than the parties hereto and thereto and the other
Secured Parties) any rights, remedies, obligations or liabilities under or by
reason of this Amended Agreement or the other Loan Documents.
(b) THIS WRITTEN AGREEMENT, THE NOTES, THE OTHER LOAN DOCUMENTS
AND THE DOCUMENTS EXECUTED IN CONNECTION HEREWITH REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 9.11. Severability. In the event any one or more of the
provisions contained in this Amended Agreement or in any other Loan Document
should be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein and
therein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 9.12. Counterparts. This Amended Agreement may be executed
by the parties hereto in several counterparts and each such counterpart shall be
deemed to be an original, admissible into evidence, but all such counterparts
shall together constitute but one and the same Agreement, and shall become
effective as provided in Section 9.03. Delivery of an executed counterpart of
this Amended Agreement by telecopy shall be equally as effective as delivery of
a manually executed counterpart of this Amended Agreement. Any party delivering
an executed counterpart of this Amended Agreement by telecopy shall also deliver
a manually executed counterpart of this Amended Agreement, but the failure to
deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Amended Agreement.
94
90
SECTION 9.13. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Amended Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Amended Agreement.
SECTION 9.14. Remedies. In case any one or more of the covenants
and/or agreements set forth in this Amended Agreement shall have been breached
by the Borrower or the Parent, then the Agent may, on behalf of the Lenders,
proceed to protect and enforce the Lenders' rights either by suit in equity
and/or by action at law, including, but not limited to, an action for damages as
a result of any such breach and/or an action for specific performance of any
such covenant or agreement contained in this Amended Agreement. Without
limitation of the foregoing, each of the Borrower and the Parent agrees that
failure to comply with any of the covenants contained herein will cause
irreparable harm and that specific performance shall be available in the event
of any breach thereof. The Agent acting pursuant to this Section 9.14, shall be
indemnified against all liability, loss or damage, together with all reasonable
costs and expenses related thereto (including reasonable legal and accounting
fees and expenses) in accordance with Section 9.05.
SECTION 9.15. Jurisdiction; Consent to Service of Process; Waiver
of Jury Trial. (a) The Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New
York, New York, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Amended Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Amended Agreement shall
affect any right that any Agent, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Amended Agreement or the
other Loan Documents against the Borrower or its properties in the courts of any
jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Amended Agreement or the other
Loan Documents in any New York State court or Federal court of the United States
of America sitting in New York, New York. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Amended Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Amended Agreement will affect the right of any party to this Amended
Agreement to serve process in any other manner permitted by law.
(d) TO THE FULLEST EXTENT PERMITTED BY LAW, THE BORROWER WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
95
91
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AMENDED AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 9.16. Waiver of certain provisions of the Amended and
Restated Credit Agreement. The Lenders hereby agree to waive any provisions, if
any, of the Amended and Restated Credit and this Amended Agreement prohibiting
the conversion of the Centre Class B Stock to Class A common voting stock of the
Parent on a share for share basis.
[Signature Pages to Follow.]
96
92
IN WITNESS WHEREOF, the parties hereto have caused this Amended Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
FIREARMS TRAINING SYSTEMS, INC.
as Parent
By:
------------------------------------
Name:
Title:
FATS, INC.
as Borrower
By:
------------------------------------
Name:
Title:
NON CENTRE ENTITIES
BANK OF AMERICA, N.A., as Agent, and Issuing
Bank and individually as a Lender
By:
------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By:
------------------------------------
Name:
Title:
Attention:
Xxxxxxx Xxxxx, VP
Special Assets
MPFP2516
000 Xxxxxx Xxxxxx, Xxxxx
Xxxxxxxxxxx, XX 00000-0000
Fax (000) 000-0000
97
93
FIRST SOURCE FINANCIAL LLP, by First Source
Financial, Inc., as Agent/Manager
By:
------------------------------------
Name:
Title:
Attention:
Xxxx Xxxxx
0000 Xxxx Xxxx Xxxx
0xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Fax (000) 000-0000
BHF (USA) CAPITAL CORPORATION
By:
------------------------------------
Name:
Title
Attention:
Xx. Xxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax (000) 000-0000
98
94
CENTRE ENTITIES, INDIVIDUALLY AND AS
LENDERS
CENTRE CAPITAL INVESTORS II, L.P. CENTRE
CAPITAL TAX-EXEMPT INVESTORS II, L.P.
CENTRE CAPITAL OFFSHORE INVESTORS II, L.P.
By: Centre Partners II, L.P., as General Partner
By: Centre Partners Management LLC, as
Attorney-in-Fact
By:
-----------------------------------------------
Managing Director
CENTRE PARTNERS COINVESTMENT, L.P.
By: Centre Partners II LLC, as General Partner
By:
-----------------------------------------------
Managing Director
99
95
Schedule 2.01(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Allocation of Lender Common Stock and Lender Preferred Stock
------------------------------------ --------------------------------- -------------------------------
CAPITAL BREAKDOWN: PREFERRED STOCK NEW COMMON SHARES
------------------------------------ --------------------------------- -------------------------------
Bank of America $ 6,259,418 12,307,203
------------------------------------ --------------------------------- -------------------------------
BHF Capital Corp. $3,611,244 7,100,391
------------------------------------ --------------------------------- -------------------------------
Centre Entities $ 3,611,244 7,100,391
------------------------------------ --------------------------------- -------------------------------
US Bank National Assoc. $2,166,818 4,260,375
------------------------------------ --------------------------------- -------------------------------
First Source Financial LLP $4,814,992 9,467,188
------------------------------------ --------------------------------- -------------------------------
100
96
Schedule 2.01(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Allocation of Senior Secured Notes and Junior Secured Notes
------------------------------------ --------------------------------- -------------------------------
CAPITAL BREAKDOWN: SENIOR SECURED DEBT JUNIOR SECURED DEBT
------------------------------------ --------------------------------- -------------------------------
Bank of America $ 3,516,344 $ 6,739,659
------------------------------------ --------------------------------- -------------------------------
BHF Capital Corp. $ 2,028,683 $ 3,888,309
------------------------------------ --------------------------------- -------------------------------
Centre Entities $ 2,028,683 $ 3,888,309
------------------------------------ --------------------------------- -------------------------------
US Bank National Assoc. $ 1,217,250 $ 2,333,063
------------------------------------ --------------------------------- -------------------------------
First Source Financial LLP $ 2,704,911 $ 5,184,412
------------------------------------ --------------------------------- -------------------------------
101
97
Schedule 2.02(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Allocation of New Revolving Credit Commitment
------------------------------------------------ -----------------------------------------------------
CAPITAL BREAKDOWN: W/C FACILITY
------------------------------------------------ -----------------------------------------------------
Bank of America $ 269,704
------------------------------------------------ -----------------------------------------------------
BHF Capital Corp. $ 155,600
------------------------------------------------ -----------------------------------------------------
Centre Entities $ 155,600
------------------------------------------------ -----------------------------------------------------
US Bank National Assoc. $ 93,363
------------------------------------------------ -----------------------------------------------------
First Source Financial LLP $ 207,467
------------------------------------------------ -----------------------------------------------------
102
98
Schedule 3.05(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Undisclosed Liabilities
103
99
Schedule 3.06
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Material Adverse Change
104
100
Schedule 3.07(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Real Property
105
101
Schedule 3.07(c)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Intellectual Property
106
102
Schedule 3.08
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Subsidiaries
107
103
Schedule 3.09(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Litigation
108
104
Schedule 3.09(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Compliance with Applicable Laws
109
105
Schedule 3.09(c)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Environmental Compliance
110
106
Schedule 3.10(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Material Contracts
111
107
Schedule 3.10(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Validity and Breach of Contracts
112
108
Schedule 3.17(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Compliance with Government Contracts
113
109
Schedule 3.17(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Government Contract Investigation and Debarment
114
110
Schedule 3.17(c)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Government Contract Investigation of Individuals
115
111
Schedule 3.17(d)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Government Contract Claims
116
112
Schedule 3.18(d)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Offices for Filing Mortgages
117
113
Schedule 3.18(e)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Security Interest Filings
118
114
Schedule 3.20
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Transactions with Affiliates
119
115
Schedule 3.21(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Stock Ownership
120
116
Schedule 3.23(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Labor Matters
121
117
Schedule 3.24
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Licenses; Permits
122
118
Schedule 6.01(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Existing Indebtedness; Preferred Stock
123
119
Schedule 6.02(a)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Existing Liens
124
120
Schedule 6.04(a)(i)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Investments in Subsidiaries
125
121
Schedule 6.04(b)
Second Amended and Restated Credit Agreement dated as of April 1, 2000
Stock Issuances
126
