EXHIBIT 4.2
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$190,000,000
SENIOR SECURED CREDIT AGREEMENT
AMENDED AND RESTATED
as of December 8, 1999
among
UNITED STATES MARINE REPAIR, INC.
As Borrower
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
THE FINANCIAL INSTITUTIONS NAMED HEREIN
AND
CREDIT LYONNAIS NEW YORK BRANCH,
as an Issuing Bank, the Swingline Bank and the Administrative Agent
--------------------------------------------------------------------------------
CITIBANK USA as Syndication Agent and
XXXXXX BROTHERS as Documentation Agent
TABLE OF CONTENTS
SECTION 1. DEFINITIONS................................................................................................... 1
1.1 Defined Terms....................................................................................... 1
1.2 Other Definitional Provisions....................................................................... 22
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS..................................................................... 22
2.1 Term Loans.......................................................................................... 22
2.2 Procedure for Term Loan Borrowing................................................................... 22
2.3 Repayment of Tranche A Term Loans................................................................... 23
2.4 Repayment of Tranche B Term Loans................................................................... 23
2.5 Evidence of Term Loan Debt.......................................................................... 24
2.6 Use of Proceeds of Term Loans....................................................................... 25
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS AND SWINGLINE LOANS.......................................... 25
3.1 Revolving Credit Commitments........................................................................ 25
3.2 Procedure for Revolving Credit Borrowing............................................................ 25
3.3 Repayment of Revolving Credit Loans; Evidence of Debt............................................... 26
3.4 Swingline Loans..................................................................................... 27
3.5 Commitment Fee...................................................................................... 28
3.6 Termination or Reduction of Revolving Credit Commitments............................................ 28
3.7 Use of Proceeds of Revolving Credit Loans........................................................... 29
3.8 Agency Fee.......................................................................................... 29
SECTION 4. LETTERS OF CREDIT............................................................................................. 29
4.1 Issuance............................................................................................ 29
4.2 Participation by Revolving Credit Lenders........................................................... 29
4.3 Drawings............................................................................................ 29
4.4 Obligations Absolute................................................................................ 30
4.5 Other Lenders....................................................................................... 31
4.6 Indemnification..................................................................................... 31
4.7 Liability of the Issuing Bank....................................................................... 32
4.8 Letter of Credit Fee................................................................................ 32
SECTION 5. GENERAL PROVISIONS APPLICABLE TO COMMITMENTS AND LOANS........................................................ 33
5.1 Prepayments......................................................................................... 33
5.2 Conversion and Continuation Options................................................................. 35
5.3 Minimum Amounts of Tranches......................................................................... 36
5.4 Interest Rates and Payment Dates.................................................................... 36
5.5 Computation of Interest and Fees.................................................................... 37
5.6 Inability to Determine Interest Rate................................................................ 37
5.7 Pro Rata Treatment and Payments..................................................................... 38
5.8 Illegality.......................................................................................... 39
5.9 Requirements of Law................................................................................. 40
5.10 Taxes............................................................................................... 41
5.11 Break Funding Payments.............................................................................. 43
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5.12 Change of Lending Office............................................................................ 44
5.13 Increased Payments by Borrower...................................................................... 44
SECTION 6. REPRESENTATIONS AND WARRANTIES................................................................................ 44
6.1 Corporate Existence; Compliance with Law............................................................ 44
6.2 Corporate Power, Authorization; Enforceable Obligations............................................. 44
6.3 No Legal Bar........................................................................................ 45
6.4 No Material Litigation.............................................................................. 45
6.5 Financial Condition................................................................................. 46
6.6 No Material Adverse Change.......................................................................... 46
6.7 No Default.......................................................................................... 46
6.8 Ownership of Property; Liens........................................................................ 47
6.9 Conduct of Business................................................................................. 47
6.10 Intellectual Property............................................................................... 47
6.11 Taxes............................................................................................... 47
6.12 Federal Regulations................................................................................. 47
6.13 ERISA............................................................................................... 47
6.14 Investment Company Act; Other Regulations........................................................... 48
6.15 Subsidiaries........................................................................................ 48
6.16 Environmental Matters............................................................................... 48
6.17 Regulation H........................................................................................ 50
6.18 Security Documents.................................................................................. 50
6.19 Accuracy of Information............................................................................. 50
6.20 Insurance........................................................................................... 50
6.21 Solvency............................................................................................ 51
6.22 Labor Relations..................................................................................... 51
6.23 Indebtedness........................................................................................ 51
6.24 Year 2000 Compliance................................................................................ 51
SECTION 7. CONDITIONS PRECEDENT.......................................................................................... 52
7.1 Conditions to Initial Loans......................................................................... 52
7.2 Conditions to Each Loan............................................................................. 55
SECTION 8. AFFIRMATIVE COVENANTS......................................................................................... 56
8.1 Financial Statements................................................................................ 56
8.2 Certificates; Other Information..................................................................... 57
8.3 Payment of Taxes and Other Obligations.............................................................. 59
8.4 Conduct of Business and Maintenance of Existence.................................................... 59
8.5 Maintenance of Records.............................................................................. 60
8.6 Maintenance of Property; Insurance.................................................................. 60
8.7 Inspection of Property, Books and Records; Discussions.............................................. 60
8.8 Notices............................................................................................. 60
8.9 Environmental Law................................................................................... 61
8.10 Maintenance of Liens of the Security Documents...................................................... 62
8.11 Pledge of After Acquired Property................................................................... 62
8.12 Pledge During Event of Default...................................................................... 63
8.13 Collateral Account.................................................................................. 64
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8.14 Interest Rate Protection............................................................................ 64
SECTION 9. NEGATIVE COVENANTS............................................................................................ 64
9.1 Financial Condition Covenants....................................................................... 64
9.2 Limitation on Indebtedness.......................................................................... 68
9.3 Limitation on Liens................................................................................. 69
9.4 Limitation on Guarantee Obligations................................................................. 71
9.5 Limitation on Fundamental Changes................................................................... 71
9.6 Limitation on Sale of Assets........................................................................ 72
9.7 Restricted Payments................................................................................. 73
9.8 Limitation on Capital Expenditures.................................................................. 73
9.9 Limitation on Investments, Loans and Advances....................................................... 73
9.10 Limitation on Optional Payments and Modifications of Debt Instruments and Capital Stock............. 74
9.11 Limitation on Transactions with Affiliates.......................................................... 74
9.12 Limitation on Negative Pledge Clauses............................................................... 74
9.13 Limitation on Lines of Business..................................................................... 74
9.14 Limitation on Issuance of Capital Stock by Subsidiaries............................................. 74
9.15 Limitation on Transfers to Exempted Subsidiaries.................................................... 74
SECTION 10. EVENTS OF DEFAULT............................................................................................ 75
SECTION 11. THE ADMINISTRATIVE AGENT..................................................................................... 77
11.1 Appointment......................................................................................... 77
11.2 Delegation of Duties................................................................................ 78
11.3 Exculpatory Provisions.............................................................................. 78
11.4 Reliance by Administrative Agent.................................................................... 78
11.5 Notice of Default................................................................................... 79
11.6 Non-Reliance on Administrative Agent and Other Lenders.............................................. 79
11.7 Indemnification..................................................................................... 79
11.8 Administrative Agent in Its Individual Capacity..................................................... 80
11.9 Successor Administrative Agent...................................................................... 80
SECTION 12. MISCELLANEOUS................................................................................................ 80
12.1 Amendments and Waivers.............................................................................. 80
12.2 Notices............................................................................................. 82
12.3 No Waiver; Cumulative Remedies...................................................................... 82
12.4 Survival of Representations and Warranties.......................................................... 83
12.5 Payment of Expenses and Taxes....................................................................... 83
12.6 Successors and Assigns; Participations and Assignments.............................................. 84
12.7 Adjustments; Set-off................................................................................ 86
12.8 Counterparts........................................................................................ 86
12.9 Severability........................................................................................ 86
12.10 Integration......................................................................................... 87
12.11 GOVERNING LAW....................................................................................... 87
12.12 Submission To Jurisdiction; Waivers................................................................. 87
12.13 Acknowledgments..................................................................................... 88
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12.14 WAIVERS OF JURY TRIAL............................................................................... 88
12.15 Interest Rate Limitation............................................................................ 88
12.16 Confidentiality..................................................................................... 88
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SCHEDULES:
Schedule I Lenders, Notice Addresses, Commitments, Commitment
Percentages
Schedule II Closing Date Mortgaged Property
Schedule III Leasehold Mortgages
Schedule 6.2 Leasehold Mortgage Consents
Schedule 6.4 Litigation
Schedule 6.5(b)(1) Obligations
Schedule 6.5(b)(2) Sales or Transfers
Schedule 6.6 Excluded Businesses
Schedule 6.8 Exceptions to Title
Schedule 6.15 Subsidiaries
Schedule 6.16 Environmental Matters
Schedule 6.18 Filing Offices
Schedule 6.20 Insurance
Schedule 6.22 Labor Relations
Schedule 6.23 Indebtedness to Remain Outstanding
Schedule 6.24 Year 2000 Compliance
Schedule 7.1(i) Recapitalization Corporate and Capital Structure
Schedule 7.1(o) Title Insurance Policies
EXHIBITS:
Exhibit A Form of Amended and Restated Borrower Security Agreement
Exhibit B Form of Amended and Restated Borrower Pledge Agreement
Exhibit C-1 Form of Leasehold Mortgage (Deed of Trust)
Exhibit C-2 Form of Leasehold Mortgage (Assignment)
Exhibit D-1 Form of Mortgage/Deed of Trust (California)
Exhibit D-2 Form of Mortgage/Deed of Trust (Virginia)
Exhibit E Form of Amended and Restated Subsidiary Guarantee
Exhibit F Form of Amended and Restated Subsidiary Security
Agreement
Exhibit G Form of Amended and Restated Subsidiary Pledge Agreement
Exhibit H-1 Form of Tranche A Term Note
Exhibit H-2 Form of Tranche B Term Note
Exhibit I Form of Revolving Credit Note
Exhibit J Form of Letter of Credit Request
Exhibit K Form of Landlord Waiver
Exhibit L Form of Closing Financial Certificate
Exhibit M Form of Opinion of Counsel to Borrower
Exhibit N Form of Compliance Certificate
Exhibit O Form of Assignment and Acceptance
Exhibit P Form of Swingline Note
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SENIOR SECURED CREDIT AGREEMENT, dated as of November 25, 1997 as
amended and restated as of December 8, 1999, among UNITED STATES MARINE REPAIR,
INC., a Delaware corporation (the "Borrower"), the several banks and other
financial institutions from time to time parties to this Agreement
(collectively, the "Lenders"), each of the Subsidiary Guarantors (as defined
herein), CREDIT LYONNAIS NEW YORK BRANCH, as an Issuing Bank with respect to the
Letters of Credit and as the Swingline Bank ("CLNY") and CREDIT LYONNAIS NEW
YORK BRANCH, as the Administrative Agent for the Lenders, the Issuing Bank and
the Swingline Bank hereunder.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Account": has the meaning given to that term in Section 9-106
of the Uniform Commercial Code of the State of New York.
"Account Debtor" the party who is obligated on an Account.
"Affiliate": as to any Person, any other Person (other than,
in the case of the Borrower, a wholly-owned Subsidiary) which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control"
of a Person means the power, directly or indirectly, either to (a) vote
10% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by
contract or otherwise.
"Administrative Agent": Credit Lyonnais New York Branch,
together with its affiliates, as the arranger of the Commitments and as
the administrative agent for the Lenders under this Agreement and the
other Loan Documents or its successor appointed pursuant to subsection
11.9.
"Agreement" this Senior Secured Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Margin": (a) for all Loans other than Tranche B
Term Loans, the Applicable Margin will be determined according to the
applicable level ("Level") as indicated by the following grid (except
that for the first six months from the Closing Date, Levels I through V
will not apply), with such Level to be determined based on the Leverage
Ratio of the Company.
Level Leverage Ratio Base Rate Margin Eurodollar Margin
----- -------------- ---------------- -----------------
I Less Than 2.00 0.75% 2.00%
II Greater Than or Equal To 2.00 Less Than 2.50 1.00% 2.25%
III Greater Than or Equal To 2.50 Less Than 3.00 1.25% 2.50%
IV Greater Than or Equal To 3.00 Less Than 3.50 1.50% 2.75%
V Greater Than or Equal To 3.50 Less Than 4.00 1.75% 3.00%
VI Greater Than or Equal To 4.00 2.00% 3.25%
(b) for Tranche B Term Loans, the Applicable Margin (i) for
Eurodollar Loans will be 4.00% and (ii) for Base Rate Loans will be
2.75%.
"Asset Sale": as defined in clause (a) of the definition of
Covered Sale.
"Assignee": as defined in subsection 12.6(c).
"Available Excess Cash Flow": as defined in subsection 5.1(b).
"Available Revolving Credit Commitment": with respect to each
Revolving Credit Lender at any time, an amount not to exceed the Unused
Revolving Credit Commitment of such Revolving Credit Lender at such
time.
"Base Rate": for any day, a rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day or (b) the Federal Funds Rate in
effect on such day plus 1/2 of 1%. For purposes hereof: "Prime Rate"
shall mean the rate of interest per annum publicly announced from time
to time by Credit Lyonnais New York Branch as its prime rate in effect
at its principal office in New York City (the Prime Rate is not
intended to be the lowest rate of interest charged by Credit Lyonnais
in connection with extensions of credit to debtors); and "Federal Funds
Rate" shall mean, for any day, the weighted average of the per annum
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 rates are not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective as of the opening of business on the effective day
of such change in the Prime Rate or the Federal Fund Rate.
"Base Rate Loans": Loans the rate of interest applicable to
which is based upon the Base Rate.
"Board of Governors": the Board of Governors of the Federal
Reserve System or any successor to the functions and powers thereof.
"Borrower": as defined in the preamble hereto.
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"Borrower Pledge Agreement": the Amended and Restated Pledge
Agreement to be executed and delivered by the Borrower, substantially
in the form of Exhibit B, as the same may be amended, supplemented or
otherwise modified from time to time.
"Borrower Pro Forma Financial Statement": as defined in
subsection 6.5(a).
"Borrower Security Agreement": the Amended and Restated
Security Agreement to be executed and delivered by the Borrower,
substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"Borrower Security Documents": the collective reference to the
Borrower Security Agreement and the Borrower Pledge Agreement.
"Borrowing Date": any Business Day specified in or in a notice
pursuant to subsection 2.2, 3.2, 3.4 or 4.1 as a date on which the
Borrower requests the Lenders or the Swingline Lender to make Loans
hereunder or the Issuing Bank to issue a Letter of Credit hereunder.
"Business": as defined in subsection 6.16.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or
required by law to close, provided, however, that, when used in
connection with (i) a Eurodollar Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in the
London interbank market and (ii) a Swingline Loan, the term "Business
Day" shall also exclude any day on which banks are not open in
Charlotte, North Carolina.
"Capital Expenditures": with respect to any Person for any
period, all expenditures of such Person in respect of the purchase or
other acquisition of fixed or capital assets (excluding any such asset
acquired in connection with (i) a Permitted Acquisition, (ii)
replacement or restoration of property to the extent financed with
insurance proceeds and (iii) normal replacement and maintenance
programs properly charged to current operations) that are paid or due
and payable in cash during such period and are required to be
capitalized as additions to property, plant and equipment in accordance
with GAAP.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (i) securities issued or directly and
fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than
one year from the date of acquisition, (ii) time deposits and
certificates of deposit having maturities of not more than 180 days
from the date of acquisition of any Lender or of any domestic
commercial bank the long-term debt of which is rated at the date of
acquisition thereof at least A or the equivalent thereof by Standard &
Poor's Ratings Group or A2 or the equivalent thereof by Xxxxx'x
Investors
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Service, Inc. and having capital and surplus in excess of $500,000,000,
(iii) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (i) and
(ii) entered into with any bank meeting the qualifications specified in
clause (ii) above, (iv) commercial paper rated at the date of
acquisition thereof at least A-2 or the equivalent thereof by Standard
& Poor's Ratings Group or P-2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc. and in either case maturing within 180 days
after the date of acquisition and (v) money market mutual funds which
invest in any of the types of securities described in clauses (i),
(ii), (iii) and (iv).
"Cash Interest Expense": for any period, with respect to any
Person, all of the following on a consolidated basis for such Person
and its Subsidiaries in accordance with GAAP: (a) total interest
expense, whether paid or accrued (without duplication) including the
interest component of capital lease obligations, including, without
limitation, net costs under Interest Rate Agreements, but excluding
amortization of discount, interest paid in property other than cash,
any other interest expense not payable in cash, bank fees, commissions,
discounts and other fees and charges owed with respect to letters of
credit, and unused commitment fees, minus (b) any net payments received
during such period under Interest Rate Agreements and interest on the
Claims Escrow Note.
"Casualty Loss": with respect to any asset owned or used by
the Borrower or any of its Subsidiaries (other than any Exempted
Subsidiaries): (a) any damage to or loss or destruction of such asset;
or (b) any actual condemnation or taking, by exercise of the power of
eminent domain or otherwise.
"CERCLA": the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended
from time to time, 42 U.S.C. Section 9601, et seq.
"Change of Control": shall occur if (a) prior to an initial
public offering by the Borrower (other than a public offering pursuant
to a registration statement on Form S-8), the Equity Investors shall
fail to beneficially own, in the aggregate, at least 51% of the
outstanding Capital Stock of the Borrower, (b) after an initial public
offering by the Borrower, any person or group other than the Equity
Investors becomes the beneficial owner of 35% or more of outstanding
capital stock of the Borrower, or (c) any person or group other than
the Equity Investors acquires voting power, whether by beneficial
ownership of capital stock, pursuant to an agreement or understanding
or otherwise, sufficient to elect a majority of the board of directors
of the Borrower.
"Claims Escrow": the escrow pursuant to which the Borrower
will pay the Claims Escrow Note from proceeds of the Loans.
"Claims Escrow Note": the promissory note, dated November 25,
1997, of the Borrower in the principal amount of $12.5 million.
"Closing Date": the date (which may be no later than December
31,1999) on which the initial Loans under this Agreement are made.
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"Closing Date Debt": the existing Indebtedness of the Borrower
outstanding under the Prior Agreement immediately prior to the Closing
Date.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, whether now
owned or hereafter acquired, upon which a Lien is purported to be
created by any Security Document.
"COLIs": those life insurance policies owned by Norshipco and
listed on Schedule 1.1.
"Commitment": with respect to any Lender, the collective
reference to such Lender's Tranche A Term Loan Commitment, Tranche B
Term Loan Commitment, and/or Revolving Credit Commitment; collectively,
as to all the Lenders, the "Commitments".
"Commitment Percentage": as to any Lender at any time, the
percentage which (i) the sum of (a) such Lender's then unused
Commitments plus (b) such Lender's Loans then outstanding (assuming, in
the case of each Revolving Credit Lender, that such Lender has made a
Loan in an amount equal to its Pro Rata Share of the Letters of Credit
Outstanding) then constitutes of (ii) the sum of (x) the aggregate
outstanding then unused Commitments of all the Lenders plus (y) the
aggregate principal amount of Loans of all the Lenders then outstanding
(assuming, in the case of the Revolving Credit Lenders, that such
Lenders have made Loans in an aggregate principal amount equal to the
Letter of Credit Outstanding).
"Commonly Controlled Entity" : 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.
"Consolidated Current Assets": with respect to any Person at
any date of determination, all assets which would, in accordance with
GAAP, be classified on a consolidated balance sheet of such Person and
its Subsidiaries as current assets at such date of determination.
"Consolidated Current Liabilities": with respect to any Person
at any date of determination, all liabilities which would, in
accordance with GAAP, be classified on a consolidated balance sheet of
such Person and its Subsidiaries as current liabilities at such date of
determination.
"Consolidated Lease Expense": with respect to any Person for
any period, the aggregate amount of any payments made or accrued by
such Person and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, for such period with respect to leases other than
Financing Leases.
"Consolidated Working Capital": with respect to any Person at
any date of determination, Consolidated Current Assets (exclusive of
cash and Cash Equivalents) of
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such Person at such date of determination minus Consolidated Current
Liabilities (excluding short term debt and the current portion of any
long term debt) of such Person at such date of determination.
"Covered Sale": as to the Borrower or any of its Subsidiaries,
subject to the provisions of Section 9, any (a) sale or other
disposition (including any sale and leaseback of assets, and any
mortgage or lease of real property) (other than a Permitted Asset Sale)
subsequent to the Closing Date of any property of the Borrower or any
of its Subsidiaries (other than any Exempted Subsidiaries) (an "Asset
Sale") or (b) issuance of equity or debt securities of the Borrower or
any of its Subsidiaries (other than any Exempted Subsidiaries)
subsequent to the Closing Date (other than (i) issuances of its own
equity securities by the Borrower to the Equity Investors, (ii)
issuances of equity securities by any Subsidiary of the Borrower to the
Borrower, (iii) issuances of debt securities by any Subsidiary of the
Borrower in favor of the Borrower and (iv) increases in the aggregate
amount of Indebtedness that may be incurred under this Agreement).
"Debt Service": with respect to any Person for any period, the
sum of (a) Cash Interest Expense of such Person for such period plus
(b) scheduled principal payments of Total Debt of such Person for such
period (whether or not such payments are made), but excluding scheduled
principal payments on the Claims Escrow Note.
"Default": any of the events specified in Section 10, whether
or not any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"Documentation Agent": Xxxxxx Brothers.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"EBITDA": with respect to any Person for any period, the sum,
determined for such Person and its Subsidiaries on a consolidated basis
in accordance with GAAP, of: (a) the consolidated Net Income of such
Person and its Subsidiaries for such period plus, (b) to the extent
deducted in computing such consolidated Net Income, the sum of (i)
federal, state, local and foreign income tax expense, (ii) interest
expense, (iii) depreciation and amortization expense and other non-cash
charges, (iv) extraordinary losses, (v) any loss on the sale of assets,
(vi) any non-cash compensation related to stock options or other equity
compensation or payment arrangements, (vii) fees and expenses
associated with the Recapitalization not to exceed $5,000,000, (viii)
any net loss during such period from any change in accounting, from any
discontinued operations or the disposition thereof, or from any prior
period adjustments, (ix) post-closing expenses of up to $200,000, and
(x) bonuses paid to management included in the Special Distribution and
Bonus; and (c) minus, to the extent added in computing such
consolidated Net Income, (i) any interest income, (ii) any
extraordinary gains, (iii) any gain on the sale of assets, and (iv) any
net gain during such period from any change in accounting, from any
discontinued operations or the disposition thereof, or from any prior
period adjustments; provided, that the EBITDA for the last three
calendar quarters of 1999 shall be $11,853,000 (June 30); $8,434,000
(September 30); and actual EBITDA plus $475,000 (December 31),
respectively. Notwithstanding the foregoing, EBITDA for any four fiscal
6
quarter period during which the Borrower or any of its Subsidiaries
completes a Permitted Acquisition shall be calculated by giving pro
forma effect to such Permitted Acquisition as of the first day of such
four fiscal quarter period.
"Environmental Claims": any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of non-compliance or violation, investigations
or proceedings relating in any way to any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "Claims"), including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, (b) any and all Claims by
any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief in connection with alleged
injury or threat of injury to health, safety or the environment due to
the presence of Materials of Environmental Concern, (c) any fact,
circumstance, condition or occurrence forming the basis of any
violation, or alleged violation, of any Environmental Law and (d) any
alleged injury or threat of injury to health, safety or the environment
due to the presence of Materials of Environmental Concern.
"Environmental Laws": any and all foreign, federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes or decrees of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or
imposing liability or standards of conduct concerning Materials of
Environmental Concern or protection of human health or the environment,
as now or may at any time hereafter be in effect.
"Equity Investors": TC Group L.L.C., a Delaware limited
liability company doing business under the name The Carlyle Group, its
Affiliates and its co-investors where The Carlyle Group serves in an
advisory capacity, and employees of the Borrower and any of its
Subsidiaries and other equity investors in the Borrower as of the
Closing Date.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors or
other Governmental Authority having jurisdiction with respect thereto)
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Board of Governors) maintained by a member bank of the Federal
Reserve System.
"Eurodollar Base Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum
equal to the rate (using the offered rate which appears on Telerate
page 3750) at which Credit Lyonnais New York Branch offered to banks in
the New York interbank eurodollar market at or about 11:00 A.M.,
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New York time, two Business Days prior to the beginning of such
Interest Period for deposits in eurodollars in immediately available
funds on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its
Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Breakage Costs": with respect to a prepayment,
conversion, declaration, revocation of notice or failure to prepay a
Eurodollar Loan after delivery of notice of prepayment, an amount in
United States dollars sufficient to compensate one or more Lenders for
any costs and losses incurred by such Lenders as a result of such
prepayment, conversion, declaration or revocation of notice in respect
of funds obtained for the purpose of making or maintaining such
Lenders' Eurodollar Loans, or any part thereof. Such compensation shall
include an amount equal to the excess, if any, of (i) the amount of
interest which would have accrued on the amount so paid or prepaid, or
not borrowed or converted, for the period from the date of such payment
or prepayment or conversion or failure to borrow to the last day of
such Interest Period (or, in the case of a failure to borrow, the
Interest Period that would have commenced on the date of such failure
to borrow) in each case at the Eurodollar Base Rate applicable for such
Loan provided for herein over (ii) the amount of interest which would
have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the London
interbank market at the Eurodollar Base Rate determined as of the date
of such payment or prepayment or conversion or failure to borrow.
"Eurodollar Loans": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
-------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 10,
provided that any requirement for the giving of notice, the lapse of
time, or both has been satisfied.
"Excess Cash Flow": with respect to any Person for any period
(a) consolidated Net Income of such Person and its Subsidiaries for
such period determined in accordance with GAAP (including, in the case
of Norshipco, any cash amounts flowing to Norshipco as a result of
liquidation or cancellation of the COLIs or any borrowing against such
amounts), plus (b) to the extent deducted in computing such
consolidated Net Income, the sum of (i) depreciation and amortization
expense, including amortization of deferred financing costs and
discount, (ii) deferred taxes or, if negative, minus such amount, (iii)
extraordinary losses, and (iv) any loss on the sale of assets and (v)
with respect to Norshipco, any deferred compensation expense, plus (c)
an amount equal to any decrease in Consolidated Working Capital during
such period, minus (d) to the extent included in computing such
consolidated Net Income (i) any extraordinary gains, and (ii) any gain
on the sale of assets and (iii) with respect to Norshipco, any deferred
compensation
8
payments minus (e) an amount equal to any increase in Consolidated
Working Capital during such period, minus (f) Capital Expenditures for
such period, scheduled or required principal payments on the Term Loans
for such period, required principal payments on the Revolving Loan for
such period, cash paid for Permitted Acquisitions, cash distributions
and bonuses paid during such period to the extent permitted under this
Agreement, restricted payments permitted in accordance with Section 9.7
and cash Investments permitted in accordance with Section 9.9 (other
than Section 9.9(b) and (c)), minus (g) any increase in the cash
surrender value of the COLIs, minus (h) payments for workers'
compensation and pensions not included in computing consolidated Net
Income and minus (i) any proceeds of the Claims Escrow or any earnings
thereon; provided that in no event shall Excess Cash Flow include the
Net Proceeds of any Covered Sale, Qualifying Insurance and Other
Proceeds, or Pension Plan Reversion Proceeds.
"Excluded Businesses": as listed on Schedule 6.6.
"Exempted Subsidiaries": Marepcon Financial Corporation,
Marepcon Corporation International, Flagship Group Ltd., South Hampton
Roads Equipment Rental Co., L.P., Capital Air Services, Inc. and their
respective Subsidiaries.
"FDIC": the Federal Deposit Insurance Corporation or any
successor to the functions and powers thereof.
"Fee Letter": that certain letter dated November 9, 1999
between the Borrower and Credit Lyonnais New York Branch, as the same
may be amended by written agreement duly executed by each of the
parties thereto, pursuant to which the Borrower has agreed to pay
certain fees to Credit Lyonnais New York Branch.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"GAAP" generally accepted accounting principles in the United
States of America as in effect from time to time, applied in a manner
consistent with that used in preparing the financial statements
referred to in Section 8.1(a).
In the event that any Accounting Change occurs and such change
results in a change of the method of calculation of financial
covenants, standards or terms in this Agreement, the provisions of this
Agreement shall be adjusted, as agreed to by all parties, to reflect
such Accounting Change so that the criteria set forth in this Agreement
for evaluating the financial condition of the Loan Parties shall be the
same after such Accounting Change as if such Accounting Change had not
been made. For purposes of this Agreement, "Accounting Change" means a
change in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public
Accountants (or successors thereto or agencies with similar functions),
and changes in accounting principles concurred with and implemented by
the Borrower's certified public accountants.
9
"Governmental Authority": any foreign, federal, state or other
court or governmental agency, authority, instrumentality or regulatory
body.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing Person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counter indemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "preliminary obligations")
of any other third Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i)
to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds
(1) for the purchase or payment of any such primary obligation or (2)
to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor,
(iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Guarantee Obligation of any
guaranteeing Person shall be deemed to be the lower of (a) an amount
equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum
amount for which such guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guarantee Obligation, unless
such primary obligation and the maximum amount for which such
guaranteeing Person may be liable are not stated or determinable, in
which case the amount of such Guarantee Obligation shall be such
guaranteeing Person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Indebtedness": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or services (other than (i)
any funds escrowed in payment or defeasance of the Claims Escrow Note,
(ii) unsecured current liabilities not the result of the borrowing of
money or the leasing of property under a Financing Lease and accounts
payable and expense accruals incurred or assumed in the ordinary course
of business for current purposes and not represented by a note or other
evidence of indebtedness and payable in accordance with customary
practices and (iii) contingent earn-outs so long as the amount thereof
is not required to be included on the face of the balance sheet (rather
than the notes thereto) in accordance with GAAP), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument (other than obligations with respect to
undrawn Letters of Credit), (c) all obligations of such Person under
Financing Leases, (d) all obligations of such Person in respect of
acceptances issued or created for the account of such Person (other
than Obligations with respect to undrawn Letters of Credit), (e) all
liabilities secured by any Lien (other than Permitted Liens) on any
property owned by such Person even though such Person has not assumed
10
or otherwise become liable for the payment thereof (provided, however,
that the amount thereof shall be deemed to be the lesser of the amount
of such indebtedness and the fair market value of such property or the
maximum liability of such Person, as applicable) and (f) all Interest
Rate Agreements (valued based on such Person's net payment obligation);
provided that Indebtedness shall not include any indebtedness or
obligation included in the Excluded Businesses, or to the extent of
cash surrender value of the COLIs, incurred against the security of the
COLIs and provided, further, that letters of credit issued, performance
bonds and similar instruments by persons other than the Issuing Bank
shall not constitute Indebtedness to the extent that the issuance of
such letter of credit is supported by a Letter of Credit issued under
this Agreement.
"Ingleside Property": that certain real property, specifically
described in Schedule III(b) hereto, currently leased by SWM from the
Xxxxxxxx Services Group, Inc., together with all improvements, fixtures
and related personal property thereon.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each calendar quarter to occur while such Loan is
outstanding, and, in the case of Term Loans, on each scheduled payment
date of principal thereof, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan having an Interest Period
longer than three months, the day which is three months after the first
day of such Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan: (a)
initially, the period commencing on the borrowing or conversion date,
as the case may be, with respect to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the Borrower
in its notice of borrowing or notice of conversion, as the case may be,
given with respect thereto; and (b) thereafter, each period commencing
on the last day of the immediately preceding Interest Period applicable
to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrow by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided, that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) any Interest Period that would otherwise extend
(A) in the case of Revolving Credit Loans which are Eurodollar
Loans, beyond the Tranche A and
11
Revolver Termination Date or (B) in the case of Term Loans
which are Eurodollar Loans, beyond the date final payment is
due on such Term Loans, shall end on the Tranche A and
Revolver Termination Date or such date of final payment, as
the case may be; and
(iii) any Interest Period pertaining to a Eurodollar
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month.
"Interest Rate Agreement": any interest rate protection
agreement, interest rate future, interest rate option, interest rate
swap or other interest rate hedge arrangement, including any such
agreement or arrangement with respect to foreign exchange or any
foreign currency, selected by the Borrower with a counterparty
acceptable to the Administrative Agent, to or under which the Borrower
is a party or a beneficiary on the date hereof or becomes a party or a
beneficiary after the date hereof.
"Issuing Bank": Credit Lyonnais New York Branch and, upon the
request of Borrower with the consent of the Administrative Agent, any
other Lender.
"L/C Rate": as defined in Section 4.8.
"Landlord Waivers": a waiver in substantially the form of
Exhibit K.
"Leasehold Encumbrance": one or more instruments (in the form
of deed of trust, mortgage, assignment of interest for security or
similar document) creating a security interest in favor of the
Administrative Agent, for the ratable benefit of the Lenders, in the
Borrower's or any Subsidiary's interest in leased real property, all
improvements, fixtures and other related personal property there
located, including improvements, fixtures and other property owned by
the lessee.
"Leasehold Mortgage": each mortgage or assignment for security
(or, in each case, each amendment and restatement thereof) with respect
to a leasehold to be executed and delivered by a Subsidiary,
substantially in the form of Exhibit C-1 or C-2, respectively and
covering the leased property listed on Schedule III for which the
Administrative Agent requests a mortgage or assignment for security
with respect to a leasehold as indicated on such Schedule, subject to
the receipt of all required consents, including landlord waivers, and
any leases of real property acquired by the Borrower or any Subsidiary
of the Borrower pursuant to any subsequent acquisition for which the
Administrative Agent requests a mortgage or assignment for security
with respect to a leasehold in each case as the same may be amended,
supplemented or otherwise modified from time to time.
"Lenders": as defined in the first paragraph of this
Agreement. When used with reference to the Security Documents and the
Collateral, the term "Lender" includes the Issuing Bank.
12
"Letter of Credit": a standby letter of credit issued by, and
subject to terms and conditions acceptable to, the Issuing Bank on
behalf of the Borrower pursuant to Section 4, which letter of credit
shall have an expiration date no later than 5 Business Days prior to
the Tranche A and Revolver Termination Date.
"Letter of Credit Request": as defined in subsection 4.1.
"Letters of Credit Outstanding": any time, the sum of (a) the
aggregate stated amount of all outstanding Letters of Credit plus (b)
the aggregate amount of all drawings made under any Letter of Credit
for which the Issuing Bank has not received reimbursement from the
Borrower by means of a borrowing of Revolving Credit Loans pursuant to
Section 3 or otherwise from the Borrower.
"Level": as defined in the definition of "Applicable Margin".
"Leverage Ratio": as of any date of determination, the ratio
of Net Debt of the Borrower and its consolidated Subsidiaries as of the
last day of the most recent fiscal quarter of the Borrower prior to
such date with respect to which the Borrower has delivered to the
Administrative Agent financial statements of the Borrower and its
consolidated Subsidiaries in conformity with the requirements of
subsection 8.1, to EBITDA of the Borrower and its consolidated
Subsidiaries for the most recent four fiscal quarters of the Borrower
prior to such date.
"Lien": with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on
such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement
relating to such asset and (c) in addition, in the case of securities,
any purchase option, call or similar right of a third party with
respect to such securities.
"Loan": any Revolving Credit Loan or Term Loan made by any
Lender pursuant to this Agreement.
"Loan Documents": this Agreement, each amendment thereto, the
Notes, the Letters of Credit, the Letter of Credit Requests (including
the related reimbursement agreements), the Subsidiary Guarantees and
the Security Documents.
"Loan Parties": the Borrower and each Subsidiary of the
Borrower which is a party to a Loan Document.
"Material Adverse Effect": a material adverse effect on (a)
the business, operations, assets, liabilities, properties, performance
or condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole or (b) the enforceability of this
Agreement, any Note or any of the other Loan Documents or the rights or
remedies of the Administrative Agent, the Issuing Bank or the Lenders
hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic
13
substances, materials or wastes, defined or regulated as such in or
under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls, urea-formaldehyde insulation, lead-based
paint, radiation, radioactive materials and electromagnetic fields.
"Mortgage": each modification to Mortgage or Deed of Trust or
amendment thereto to be executed and delivered by the Borrower or a
Subsidiary, substantially in the form of Exhibit D-1 or Exhibit D-2, as
applicable, and each other mortgage or deed of trust (other than a
Leasehold Mortgage) to be executed and delivered by a Subsidiary in
such other form as shall be reasonably satisfactory to Administrative
Agent (with respect to Mortgaged Property located in any other state or
foreign country), and covering the interests in real property listed on
Schedule II for which the, Administrative Agent requests a Mortgage as
indicated on such Schedule and any ownership interests in real property
acquired by the Borrower or any Subsidiary (other than any Exempted
Subsidiary) of the Borrower pursuant to any subsequent acquisition for
which the Administrative Agent requests a Mortgage, in each case as the
same may be amended, supplemented or otherwise modified from time to
time. "Mortgaged Properties": all of the interests in real estate in
which Liens are purported to be granted to the Administrative Agent
pursuant to the Mortgages.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 3(37) or 4001(a)(3) of ERISA.
"Net Debt": Total Debt less cash and Cash Equivalents
reflected on the balance sheet of the Borrower and its consolidated
Subsidiaries as of a given date, provided that, for purposes of this
definition, indebtedness pursuant to the Claims Escrow Note and other
"seller paper" permitted pursuant to Section 9.2(e) hereof or any
obligation (whether or not contingent) under or in connection with the
Claims Escrow, shall in all cases not be considered part of Total Debt.
"Net Income": for any Person for any period means the net
income of such Person determined in accordance with GAAP.
"Net Proceeds": (a) 100% of the cash proceeds of any Covered
Sale by the Borrower or any of its Subsidiaries (including any cash
payments received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment receivable
or otherwise, but only as and when received) of such Covered Sale net
of (i) attorneys' fees, accountants' fees, investment banking fees,
survey costs, title insurance premiums, and related search and
recording charges, transfer taxes, deed or mortgage recording taxes,
required debt payments (other than pursuant hereto), other customary
expenses and brokerage, consultant and other customary fees actually
incurred in connection therewith and (ii) taxes paid or payable as a
result thereof; (b)100% of Qualifying Insurance and Other Proceeds; and
(c) 100% of all Pension Plan Reversion Proceeds.
"Non-Excluded Taxes": as defined in subsection 5.10(a).
14
"Norshipco": Norfolk Shipbuilding and Drydock Corporation.
"Notes": the collective reference to the Revolving Credit
Notes and the Term Notes.
"Other Taxes": as defined in subsection 5.10(a).
"Participant": as defined in subsection 12.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Pension Plan Reversion Proceeds": the amount of the cash and
the fair market value of any and all other property received (directly
or indirectly) by the Borrower or any Commonly Controlled Entity after
the Closing Date from any stock bonus, pension or profit-sharing plan
(or trust thereunder) which was treated by the Borrower or such
Commonly Controlled Entity as a plan qualified under Code Section
401(a) which shall not have been applied by the Borrower or such
Commonly Controlled Entity to payment of tax, if any, imposed under
Code Section 4980(a) with respect to the receipt of such cash or other
property.
"Permitted Acquisition": an acquisition permitted under
subsection 9.5(c).
"Permitted Asset Sale": a sale permitted by any of subsections
9.5(b), 9.6(a), 9.6(b), 9.6(d), 9.6(e), 9.6(i) and 9.6(j).
"Permitted Liens": as defined in subsection 9.3.
"Person": an individual, partnership, corporation, business
trust, joint stock company, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledge Agreements": collectively, the Borrower Pledge
Agreement and the Subsidiary Pledge Agreements.
"Prior Agreement": this Senior Secured Credit Agreement dated
as of November 25, 1997, as amended, prior to the Effective Date of
this Agreement.
"Pro Rata Share of Letters of Credit Outstanding": with
respect to any Revolving Credit Lender at any time, that percentage of
the Letters of Credit Outstanding at such time which is equal to the
Revolving Credit Commitment Percentage of such Revolving Credit Lender
at such time.
15
"Pro Rata Share of Swingline Loans Outstanding": with respect
to any Revolving Credit Lender at any time, that percentage of the
Swingline Loans outstanding at such time which is equal to the
Revolving Credit Commitment Percentage of such Revolving Credit Lender
at such time.
"Qualifying Insurance and Other Proceeds": any insurance
proceeds payable to the Borrower or any of its Subsidiaries after the
Closing Date on account of a Casualty Loss (other than proceeds of
business interruption or similar insurance or any proceeds used to pay
any third party claims or any fees or expenses incurred in connection
with the casualty loss or related claims against an insurer) which
shall not have been applied by the Borrower or such Subsidiary to the
payment of the cost of repair or replacement of the property subject to
such Casualty Loss within six months after the date such insurance
proceeds are actually received by the Borrower or such Subsidiary.
"Recapitalization": means the transactions contemplated by
this Agreement as amended and restated, including without limitation
the Special Distribution and Bonus, management bonuses, the repayment
of Closing Date Debt and the payment of related fees and expenses not
to exceed $5,000,000.
"Register": as defined in subsection 12.6(d).
"Regulation U": Regulation U of the Board of Governors as in
effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under Pension Benefit Guaranty Corporation
regulations issued under Title IV of ERISA.
"Required Lenders": at any time, Lenders the Commitment
Percentages of which aggregate in excess of 50%.
"Required Revolving Credit Lenders": at any time, Revolving
Credit Lenders the Revolving Credit Commitment Percentages of which
aggregate in excess of 50%.
"Required Tranche A Lenders": at any time, Tranche A Lenders
the Tranche A Commitment Percentage of which aggregates in excess of
50%.
"Required Tranche B Lenders": at any time, Tranche B Lenders
the Tranche B Commitment Percentages of which aggregate in excess of
50%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
16
"Responsible Officer": with respect to any Person, any one of
the chairman of the board, the chief executive officer, the president
and the executive vice president of such Person or, with respect to
financial matters, the chief financial officer or treasurer of such
Person.
"Revolving Credit Commitment": with respect to each Revolving
Credit Lender, the amount set forth opposite such Revolving Credit
Lender's name on Schedule I under the heading "Revolving Credit
Commitment", as such amount may be reduced from time to time pursuant
to this Agreement; collectively, as to all the Revolving Credit
Lenders, the "Revolving Credit Commitments".
"Revolving Credit Commitment Percentage": as to any Revolving
Credit Lender at any time, the percentage which (i) the sum of (a) such
Revolving Credit Lender's then unused Revolving Credit Commitment plus
(b) such Revolving Credit Lender's Revolving Credit Loans then
outstanding then constitutes of (ii) the sum of (x) the aggregate
outstanding then unused Revolving Credit Commitments of all the
Revolving Credit Lenders plus (y) the aggregate principal amount of
Revolving Credit Loans of all the Revolving Credit Lenders then
outstanding.
"Revolving Credit Commitment Period": the period from and
including the Closing Date but not including the Tranche A and Revolver
Termination Date or such earlier date on which the Revolving Credit
Commitments shall terminate as provided herein.
"Revolving Credit Lender": any Lender with an unused Revolving
Credit Commitment hereunder and/or any Revolving Credit Loans
outstanding hereunder; collectively, the "Revolving Credit Lenders".
"Revolving Credit Loans": as defined in subsection 3.1(a).
"Revolving Credit Maturity Date": five (5) years from the
Closing Date.
"Revolving Credit Note": as defined in subsection 3.3(e).
"San Diego Property": that certain real property, specifically
described in Schedule III(b) hereto, currently leased by SWM from the
San Diego Unified Port District, together with all improvements,
fixtures and related personal property thereon.
"San Francisco Property": that certain real property,
specifically described in Schedule III(b) hereto, currently leased by
Southwest Marine, Inc. (as assigned to San Francisco Drydock, Inc.)
from the City and County of San Francisco, together with all
improvements, fixtures and related personal property thereon.
"San Xxxxx Property": that certain real property, specifically
described in Schedule III(b) hereto, currently leased by Southwest
Marine, Inc. from the City of Los Angeles, together with all
improvements, fixtures and related personal property thereon.
17
"SEC": the United States Securities and Exchange Commission or
any successor thereto.
"Security Agreements": collectively, the Borrower Security
Agreement and the Subsidiary Security Agreements.
"Security Documents": collectively, the Leasehold Mortgages,
the Mortgages, the Security Agreements, the Pledge Agreements, and all
other security documents hereafter delivered to the Administrative
Agent granting or purporting to xxxxx x Xxxx on any asset or assets of
any Person to secure the obligations and liabilities of the Borrower
hereunder and/or under any of the other Loan Documents or to secure any
guarantee of any such obligations and liabilities.
"Security Properties": the San Diego Property, the San
Francisco Property and the San Xxxxx Property.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination and after giving effect to the
transactions contemplated hereby, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount that will be required to pay all "liabilities of such
Person, contingent or otherwise", as of such date (as such quoted terms
are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors) as such debts
become absolute and matured, (b) such Person will not have, and is not
engaged or about to engage in a transaction which would cause such
Person to have, as of such date, an unreasonably small amount of
capital with which to conduct its business, and (c) such Person will be
able to pay its debts as they mature, taking into account the timing of
and amounts of cash to be received by such Person and the timing of and
amounts of cash to be payable on or in respect of indebtedness of such
Person; in each case after giving effect to (A) as of the Closing Date
the making of the Loans to be made on the Closing Date and to the
application of the proceeds of such Loans, and (B) on any date after
the Closing Date, the making of any Revolving Credit Loan to be made on
such date, and to the application of the proceeds of such Revolving
Credit Loan. For purposes of this definition, (i) "debt" means
liability on a "claim", and (ii) "claim" means any (x) right to
payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured or unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured or
unmatured, disputed, undisputed, secured or unsecured.
"Special Distribution and Bonus": The distribution by the
Borrower to its shareholders and the funding of management bonuses in
an aggregate principal amount not to exceed $90,000,000.
18
"Sublimit": as defined in subsection 4.1.
"Subsidiary": as to any Person, a corporation, limited
liability company, partnership or other entity of which shares of stock
or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Borrower.
"Subsidiary Guarantee": the Amended and Restated Guarantee to
be executed and delivered by the Subsidiary Guarantors of the Borrower,
as the same may be amended, supplemented or otherwise modified from
time to time.
"Subsidiary Guarantors": each Subsidiary of the Borrower,
other than the Exempted Subsidiaries.
"Subsidiary Pledge Agreement": each Amended and Restated
Pledge Agreement to be executed and delivered by the Subsidiary
Guarantors substantially in the form of Exhibit G, as the same may be
amended, supplemented or otherwise modified from time to time.
"Subsidiary Security Agreement": collectively, each Amended
and Restated Security Agreement to be executed and delivered by the
Subsidiary Guarantors in favor of the Administrative Agent,
substantially in the form of Exhibit F, as the same may be amended,
supplemented or otherwise modified from time to time.
"Subsidiary Security Documents": collectively, the Subsidiary
Security Agreements and the Subsidiary Pledge Agreements.
"SWM": collectively, Southwest Marine, Inc. and San Francisco
Drydock, Inc., both California corporations.
"Swingline Exposure": at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Revolving Credit
Commitment Percentage of the total Swingline Exposure at such time.
"Swingline Lender": CLNY, in its capacity as Lender for
Swingline Loans hereunder.
"Swingline Loan": a Loan made pursuant to Section 3.4.
"Syndication Agent": Citibank USA.
"Term Loan": a Tranche A Term Loan or a Tranche B Term Loan,
as the context shall require; collectively, the "Term Loans".
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"Term Loan Commitments": the collective reference to the
Tranche A Commitments and the Tranche B Commitments; individually, a
"Term Loan Commitment".
"Term Loan Commitment Percentage": as to any Term Loan Lender
at any time, the percentage of the Term Loan Commitments then
constituted by such Term Loan Lender's Term Loan Commitments (or, after
the Term Loans are made, the percentage of the aggregate Term Loans
then constituted by such Term Loan Lender's Term Loans).
"Term Loan Lender": any Lender with an unused Term Loan
Commitment hereunder and/or any Term Loans outstanding hereunder;
collectively, the "Term Loan Lenders".
"Term Note": a Tranche A Term Note or a Tranche B Term Note,
as the context shall require; collectively, the "Term Notes".
"Total Debt": with respect to any Person at any time, all
Indebtedness of such Person and its Subsidiaries as determined on a
consolidated basis in accordance with GAAP pursuant to clauses (a),
(b), (c) and (e) of the definition of Indebtedness and the proviso
thereto, including (without duplication), if such Person is the
Borrower, the aggregate principal amount of all outstanding Loans;
provided, however, that for purposes of this definition, indebtedness
pursuant to the Claims Escrow Note or any obligation (whether or not
contingent) under or in connection with the Claims Escrow shall in all
cases not be considered part of Total Debt.
"Tranche": the collective reference to Eurodollar Loans the
then-current Interest Periods, all of which begin on the same date and
end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Tranche A and Revolver Termination Date": the date five years
(60 months) from the Closing Date.
"Tranche A Commitment": as to any Tranche A Lender, its
obligation to make a Tranche A Term Loan to the Borrower in an amount
equal to the amount set forth opposite such Tranche A Lender's name in
Schedule I under the heading "Tranche A Commitment"; collectively, as
to all the Tranche A Lenders, the "Tranche A Commitments".
"Tranche A Commitment Percentage": as to any Tranche A Lender
at any time, the percentage of the Tranche A Commitments then
constituted by such Tranche A Lender's Tranche A Commitment (or, after
the Tranche A Term Loans are made, the percentage of the aggregate
Tranche A Term Loans then constituted by such Tranche A Lender's
Tranche A Term Loan).
"Tranche A Lender": any Lender with an unused Tranche A
Commitment hereunder and/or any Tranche A Term Loans outstanding
hereunder, collectively, the "Tranche A Lenders".
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"Tranche A Maturity Date": the date five years (60 months)
from the Closing Date.
"Tranche A Term Loan": as defined in subsection 2.1(a).
"Tranche A Term Note": as defined in subsection 2.5(d)(i).
"Tranche B Commitment": as to any Tranche B Lender, its
obligation to make a Tranche B Term Loan to the Borrower in an amount
equal to the amount set forth opposite such Tranche B Lender's name in
Schedule I under the heading "Tranche B Commitment"; collectively, as
to all the Tranche B Lenders, the "Tranche B Commitments".
"Tranche B Commitment Percentage": as to any Tranche B Lender
at any time, the percentage of the Tranche B Commitments then
constituted by such Tranche B Lender's Tranche B Commitment (or, after
the Tranche B Term Loans are made, the percentage of the aggregate
Tranche B Term Loans then constituted by such Tranche B Lender's
Tranche B Term Loan).
"Tranche B Lender": any Lender with an unused Tranche B
Commitment hereunder and/or any Tranche B Term Loans outstanding
hereunder; collectively, the "Tranche B Lenders".
"Tranche B Maturity Date": the date seven years (84 months)
from the Closing Date.
"Tranche B Term Loan": as defined in subsection 2.1(b).
"Tranche B Term Note": as defined in subsection 2.5(d)(ii).
"Transferee": as defined in subsection 12.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"Unused Revolving Credit Commitment": as to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of
(a) the amount of such Revolving Credit Lender's Revolving Credit
Commitment at such time over (b) the aggregate principal amount of all
Revolving Credit Loans made by such Lender then outstanding plus such
Lender's Pro Rata Share of the Letters of Credit Outstanding at such
time plus such Lender's Pro Rata Share of Swingline Loans Outstanding.
"Voting Stock": as to any Person, the Capital Stock of such
Person normally entitled to vote in the election of directors of such
Person.
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1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in any Loan
Document or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Loan Document and any
certificate or other document made or delivered pursuant hereto,
accounting terms relating to the Borrower and its Subsidiaries not
defined in subsection 1.1 and accounting terms partly defined in
subsection 1.1, to the extent not defined, shall have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) Sections and subsections headings in this Agreement are
included for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or in any way affect the
meaning or construction of any provision of this Agreement.
SECTION 2. AMOUNT AND TERMS OF TERM LOAN COMMITMENTS
2.1 Term Loans. Subject to the terms and conditions hereof, (a) each
Tranche A Lender severally agrees (a) to make a term loan (a "Tranche A Term
Loan") to the Borrower on the Closing Date in an amount equal to the Tranche A
Commitment of such Tranche A Lender and (b) each Tranche B Lender severally
agrees to make a term loan (a "Tranche B Term Loan") to the Borrower on the
Closing Date in an amount equal to the Tranche B Commitment of such Tranche B
Lender. The Term Loans may from time to time be (a) Eurodollar Loans, (b) Base
Rate Loans or (c) a combination thereof, as determined by the Borrower and
notified to the Administrative Agent in accordance with subsections 2.2 and 5.2.
No portion of any of the Term Loan Commitments which, with respect to the
Tranche A Commitments or the Tranche B Commitments, has not been borrowed on the
Closing Date may be borrowed thereafter.
2.2 Procedure for Term Loan Borrowing. The Borrower hereby requests a
Tranche A Term Loan borrowing on the Closing Date in an amount equal to the
aggregate amount of the Tranche A Commitments of the Tranche A Lenders and a
Tranche B Term Loan borrowing on the Closing Date in an amount equal to the
aggregate amount of the Tranche B Commitments of the Tranche B Lenders. The
Borrower shall give the Administrative Agent irrevocable notice prior to 12:00
P.M., New York City time, at least three Business Days prior to the Closing
Date, if all or any part of the Term Loans are to be initially Eurodollar Loans,
specifying the respective amounts of each such Type of Loan and the respective
lengths of the initial Interest Periods therefor. If no such notice is given by
the Borrower, the Term Loans shall initially be Base Rate Loans. Upon receipt of
such notice the Administrative Agent shall promptly notify the Term
22
Loan Lenders thereof. Each Term Loan Lender will make the amount of its pro rata
share of each borrowing of Term Loans available to the Administrative Agent for
the account of the Borrower at the office of the Administrative Agent specified
in subsection 12.2 prior to 1:00 P.M., New York City time, on the Closing Date
in Dollars and in funds immediately available to the Administrative Agent. The
Administrative Agent shall, by 2:00 P.M., New York City time, on the Closing
Date credit the account of the Borrower on the books of such office of the
Administrative Agent or such other account as specified by the Borrower with the
aggregate of the amounts made available to the Administrative Agent by the Term
Loan Lenders and in like funds as received by the Administrative Agent.
2.3 Repayment of Tranche A Term Loans. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the Tranche A Lenders in repayment of the principal amount of the Tranche A Term
Loans made by such Tranche A Lenders the amounts set forth below, beginning on
the six month anniversary of the Closing Date, and on each successive three
month anniversary of the Closing Date in the year following the Closing Date set
forth below; provided that, notwithstanding the foregoing, the aggregate then
unpaid principal amount of the Tranche A Term Loans shall be payable on the
Tranche A and Revolver Termination Date (or such earlier date on which the
Tranche A Term Loans become due and payable pursuant to Section 5 or 10):
Year Amount
---- ------
1 ........................................ $1,000,000
2 ........................................ $2,000,000
3 ........................................ $2,500,000
4 ........................................ $3,250,000
5 ........................................ $4,000,000
The Borrower hereby further agrees to pay interest on the unpaid principal
amount of the Tranche A Term Loans from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in subsection 5.4.
2.4 Repayment of Tranche B Term Loans. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the Tranche B Lenders in repayment of the principal amount of the Tranche B Term
Loans made by such Tranche B Lenders the amounts set forth below on the last
Business Day of each successive three month anniversary of the Closing Date in
the year following the Closing Date (i) in 19 consecutive, equal quarterly
installments of $250,000 commencing on the six-month anniversary of the Closing
Date and (ii) in 8 consecutive equal quarterly installments of $11,906,250
thereafter provided that, notwithstanding the foregoing, the aggregate then
unpaid principal amount of the Tranche B Term Loans shall be payable on the
Tranche B Maturity Date (or such earlier date on which the Tranche B Term Loans
become due and payable pursuant to Section 5 or 10). The Borrower hereby further
agrees to pay interest on the unpaid principal amount of the Tranche B Term
Loans from time to time outstanding from the date hereof until payment in full
thereof at the rates per annum, and on the dates, set forth in subsection 5.4.
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2.5 Evidence of Term Loan Debt.
(a) Each Term Loan Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Term Loan Lender resulting from the Tranche A Term Loans and/or Tranche B Term
Loans made by such Term Loan Lender from time to time, including the amounts of
principal and interest payable and paid to such Term Loan Lender from time to
time under this Agreement.
(b) The Administrative Agent shall maintain the Register pursuant to
subsection 12.6(d), and a subaccount therein for each Term Loan Lender, in which
shall be recorded (i) the amount of each Tranche A Term Loan and Tranche B Term
Loan made hereunder, the Type thereof and, in the case of Eurodollar Loans, each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Term Loan
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Term Loan Lender's
share thereof, if any.
(c) The entries made in the Register and the accounts of each Term Loan
Lender maintained by the Administrative Agent pursuant to subsection 2.5(b)
shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Term Loan Lender or the
Administrative Agent to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Tranche A Term Loans and/or Tranche B Term Loans
made to the Borrower by such Term Loan Lender in accordance with the terms of
this Agreement.
(d) The Borrower agrees that at the closing on the Closing Date the
Borrower will execute and deliver to each Term Loan Lender (i) a promissory note
of the Borrower evidencing the Tranche A Term Loans made by such Tranche A
Lender, substantially in the form of Exhibit H-1 (a "Tranche A Term Note"),
payable to the order of such Tranche A Lender and in a principal amount equal to
the aggregate unpaid principal amount of all Tranche A Term Loans made by such
Tranche A Lender, and/or (ii) a promissory note of the Borrower evidencing the
Tranche B Term Loan made by such Tranche B Lender, substantially in the form of
Exhibit H-2 (a "Tranche B Term Note"), payable to the order of such Tranche B
Lender and in a principal amount equal to the aggregate unpaid principal amount
of all Tranche B Term Loans made by such Tranche B Lender. Each Term Loan Lender
is hereby authorized to record the date, Type and amount of each Tranche A Term
Loan or Tranche B Term Loan, as the case may be, made by such Term Loan Lender,
the date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of Eurodollar Loans, the length of each Interest Period
and Eurodollar Rate with respect thereto, on the schedule annexed to and
constituting a part of its Tranche A Term Note or Tranche B Term Note, as the
case may be; provided, however, that the failure to make any such recordation
(or any error therein) shall not in any manner affect the obligation of the
Borrower to repay (with applicable interest) the Tranche A Term
24
Loans and/or Tranche B Term Loans made to the Borrower in accordance with the
terms of this Agreement.
2.6 Use of Proceeds of Term Loans. The proceeds of the Term Loans shall
be used by the Borrower on or before December 31, 1999 to refinance the Closing
Date Debt, pay the Special Distribution and Bonus and/or to pay certain fees and
expenses not to exceed $5,000,000.
SECTION 3. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS AND SWINGLINE LOANS
3.1 Revolving Credit Commitments.
(a) Subject to the terms and conditions hereof, each Revolving
Credit Lender severally agrees to make revolving credit loans
("Revolving Credit Loans") to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at
any one time outstanding not to exceed the amount of such Revolving
Credit Lender's Available Revolving Credit Commitment. Subject to the
foregoing, during the Revolving Credit Commitment Period the Borrower
may use the Available Revolving Credit Commitments by borrowing and
prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) Base Rate Loans or (iii) a combination thereof,
as determined by the Borrower and notified to the Administrative Agent
in accordance with subsections 3.2 and 5.2, provided that no Revolving
Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Tranche A and Revolver Termination Date.
3.2 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments during the Revolving Credit Commitment
Period on any Business Day, provided that the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent (a) prior to 12:00 P.M., New York City time, three Business
Days prior to the requested Borrowing Date, if all or any part of the requested
Revolving Credit Loans are to be initially Eurodollar Loans or (b) prior to 2:00
P.M., New York City time, one Business Day prior to the requested Borrowing
Date, otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, Base
Rate Loans or a combination thereof and (iv) if the borrowing is to be entirely
or partly of Eurodollar Loans, the respective amounts of such Type of Loan and
the respective lengths of the initial Interest Periods therefor. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $100,000 or a whole multiple thereof (or, if the then
Revolving Credit Commitments are less than $100,000, such lesser amount) and (y)
in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $100,000 in
excess thereof. Upon receipt of any such notice from the Borrower, the
Administrative Agent shall promptly notify each Revolving Credit Lender thereof.
Each Revolving Credit Lender will make the amount of its pro rata share of each
borrowing available to the Administrative Agent for the account of the Borrower
at the office of the
25
Administrative Agent specified in subsection 12.2 prior to 1:00 P.M., New York
City time, on the Borrowing Date requested by the Borrower and in funds
immediately available to the Administrative Agent. Such borrowing will then be
made available by 3:00 P.M., New York City time to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office or such other account as specified by the Borrower with the aggregate of
the amounts made available to the Administrative Agent by the Revolving Credit
Lenders and in like funds as received by the Administrative Agent.
3.3 Repayment of Revolving Credit Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender
the then unpaid principal amount of each Revolving Credit Loan made by
such Lender on the Tranche A and Revolver Termination Date (or such
earlier date on which the Revolving Credit Loans become due and payable
pursuant to Section 5 or 10). The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Revolving Credit Loans
from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in
subsection 5.4.
(b) Each Revolving Credit Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness
of the Borrower to such Revolving Credit Lender resulting from each
Revolving Credit Loan made by such Revolving Credit Lender from time to
time, including the amounts of principal and interest payable and paid
to such Revolving Credit Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to subsection 12.6(d), and a subaccount therein for each
Revolving Credit Lender, in which shall be recorded (i) the amount of
each Revolving Credit Loan made hereunder, the Type thereof and, in the
case of Eurodollar Loans, each Interest Period applicable thereto, (ii)
the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Revolving Credit Lender
hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Revolving
Credit Lender's share thereof, if any.
(d) The entries made in the Register and the accounts of each
Revolving Credit Lender maintained by the Administrative Agent pursuant
to subsection 3.3(c) shall, to the extent permitted by applicable law,
be prima facie evidence of the existence and amounts of the obligations
of the Borrower therein recorded; provided, however, that the failure
of any Revolving Credit Lender or the Administrative Agent to maintain
the Register or any such account, or any error therein shall not in any
manner affect the obligation of the Borrower to repay (with applicable
interest) the Revolving Credit Loans made to the Borrower by such
Revolving Credit Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that at the closing on the Closing
Date, the Borrower will execute and deliver to such Revolving Credit
Lender a promissory note of the
26
Borrower evidencing the Revolving Credit Loans made by such Revolving
Credit Lender, substantially in the form of Exhibit I (a "Revolving
Credit Note"), dated the Closing Date and payable to the order of such
Revolving Credit Lender and in a principal amount equal to the amount
of the Revolving Credit Commitment of such Revolving Credit Lender.
Each Revolving Credit Lender is hereby authorized to record the date,
Type and amount of each Revolving Credit Loan made by such Revolving
Credit Lender, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of Eurodollar Loans,
the length of each Interest Period and Eurodollar Rate with respect
thereto, on the schedule annexed to and constituting a part of its
Revolving Credit Note; provided, however, that the failure to make any
such recordation (or any error therein) shall not in any manner affect
the obligation of the Borrower to repay (with applicable interest) the
Revolving Credit Loans made to the Borrower in accordance with the term
of this Agreement.
3.4 Swingline Loans.
(a) Subject to the terms and conditions set forth herein, the
Swingline Lender agrees to make Swingline Loans to the Borrower from
time to time during the Revolving Credit Commitment Period, in an
aggregate principal amount at any time outstanding that will not result
in the aggregate principal amount of outstanding Swingline Loans
exceeding the lesser of (i) $5,000,000 and (ii) the sum of the then
Available Revolving Credit Commitments. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may
borrow, prepay and reborrow Swingline Loans. Each Swingline Loan shall
mature no later than the earlier of (i) the thirtieth (30th) calendar
day following the relevant Borrowing Date and (ii) the Tranche A and
Revolver Termination Date.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by
telecopy), not later than 12:00 noon, New York City time, on the day of
a proposed Swingline Loan. Each such notice shall be irrevocable and
shall specify the requested date (which shall be a Business Day) and
amount of the requested Swingline Loan. The Administrative Agent will
promptly advise the Swingline Lender of any such notice received from
the Borrower. The Swingline Lender shall make each Swingline Loan
available to the Borrower by means of a credit to the general deposit
account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of drawing under a
Letter of Credit as provided in Section 4.3, by remittance to the
Issuing Bank) by 3:00 p.m., New York City time, on the requested date
of such Swingline Loan.
(c) Each Swingline Loan shall be a Base Rate Loan and shall be
evidenced by a Swingline Note substantially in the form of Exhibit P.
(d) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., New York City time, on
any Business Day require the Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding.
Such notice shall specify the aggregate amount of
27
Swingline Loans in which Lenders will participate. Promptly upon
receipt of such notice, the Administrative Agent will give notice
thereof to each Lender, specifying in such notice such Lender's
Revolving Credit Commitment Percentage of such Swingline Loan or Loans.
Each Lender hereby absolutely and unconditionally agrees, upon receipt
of notice as provided above, to pay to the Administrative Agent, for
the account of the Swingline Lender, such Lender's Revolving Credit
Commitment Percentage of such Swingline Loan or Loans. Each Lender
acknowledges and agrees that its obligation to acquire participations
in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of
Default or reduction or termination of the Commitments, and that each
such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds,
in the same manner as provided in Section 3.2 with respect to Loans
made by such Lender (and Section 3.2 shall apply to the payment
obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from
the Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this
paragraph, and thereafter payments in respect of such Swingline Loan
shall be made to the Administrative Agent and not to the Swingline
Lender. Any amounts received by the Swingline Lender from the Borrower
(or other party on behalf of the Borrower) in respect of a Swingline
Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative
Agent; any such amounts received by the Administrative Agent shall be
promptly remitted by the Administrative Agent to the Lenders that shall
have made their payments pursuant to this paragraph and to the
Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not
relieve the Borrower of any default in the payment thereof.
3.5 Commitment Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Revolving Credit Lender during the Revolving
Credit Commitment Period a commitment fee payable quarterly in arrears on each
successive three month anniversary of the Closing Date and on the Tranche A and
Revolver Termination Date or such earlier date as the Revolving Credit
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof; such fee to be computed on the average
daily Unused Revolving Credit Commitment at the rate of 0.50% per annum.
3.6 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than five Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments. Any such
reduction shall be in a minimum amount equal to $500,000 or an integral multiple
of $100,000 in excess thereof or, if less, the entire remaining balance of the
Revolving Credit Commitments and shall reduce permanently the Revolving Credit
Commitments then in effect; provided that no such termination or reduction shall
be permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and/or the Swingline Loans made on the effective date
thereof, the aggregate principal amount of
28
the Revolving Credit Loans and the Swingline Loans and Letters of Credit then
outstanding would exceed the Revolving Credit Commitments then in effect.
3.7 Use of Proceeds of Revolving Credit Loans. The proceeds of the
Revolving Credit Loans and the Swingline Loans shall be used by the Borrower for
working capital and other general corporate purposes, including Permitted
Acquisitions.
3.8 Agency Fee. The Borrower agrees to pay to the Administrative Agent,
for the Administrative Agent's own account, the fees specified in the Fee Letter
when due and payable thereunder.
SECTION 4. LETTERS OF CREDIT
4.1 Issuance. On the terms and conditions hereinafter set forth, the
Issuing Bank on behalf of the Revolving Credit Lenders agrees to issue any
Letter of Credit (or amendments thereof) requested by the Borrower during the
period from the Closing Date until the date 15 Business Days prior to the
Tranche A and Revolver Termination Date; provided, however, that the Issuing
Bank shall have no obligation to issue any such Letters of Credit (or amendments
thereof) if (a) the Closing Date shall not have previously occurred or (b) such
issuance would cause the aggregate amount outstanding at any time of all Letters
of Credit Outstanding to exceed $20,000,000. Each Letter of Credit shall be
issued pursuant to a request, given not later than 12:00 P.M. (New York City
time) on the third Business Day prior to the date of proposed issuance, by the
Borrower to the Administrative Agent, which shall give to the Issuing Bank and
each Revolving Credit Lender prompt notice thereof by telecopy, telex or cable.
Such request by the Borrower, for the issuance of a Letter of Credit (or
amendments thereof) shall be made by telephone, telecopy, telex or cable,
confirmed immediately in writing if by telephone, in substantially the form of
Exhibit J, together with a signed letter of credit application (including the
related reimbursement agreement) on the Issuing Bank's then-standard form (or
other form acceptable to the Issuing Bank and appropriate, in the sole opinion
of the Issuing Bank, in the circumstances) (a "Letter of Credit Request") duly
executed by the Borrower and may be canceled by notice thereof prior to issuance
of such Letter of Credit by telephone, telecopy, telex or cable, confirmed
immediately in writing if by telephone, to the Issuing Bank and the
Administrative Agent. Within the limits of each Revolving Credit Lender's
Available Revolving Credit Commitment and the other restrictions set forth
herein, the Borrower's ability to request the issuance of Letters of Credit
shall be fully revolving.
4.2 Participation by Revolving Credit Lenders. Immediately upon
issuance or amendment by the Issuing Bank of any Letter of Credit in accordance
with the procedures set forth in this Section 4, each Revolving Credit Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from the Issuing Bank, without recourse or warranty, an undivided interest and
participation to the extent of such Revolving Credit Lender's Pro Rata Revolving
Share of Letters of Credit Outstanding in such Letter of Credit (including,
without limitation, all obligations of the Company with respect thereto) other
than amounts owing to the Issuing Bank under subsection 4.8 and any security
therefor or guaranty pertaining thereto.
4.3 Drawings. In the event that any drawing shall be made under a
Letter of Credit, by demand or claim (including, without limitation, any draft),
the Issuing Bank shall notify the
29
Borrower via telephone, telecopy or telex of such drawing and the Borrower shall
(whether or not the Issuing Bank has notified the Borrower of such drawing)
reimburse the Issuing Bank in immediately available funds for any amount paid or
to be paid by the Issuing Bank under such Letter of Credit on the date of such
payment. In the event that any drawing under a Letter of Credit is not
reimbursed by the Borrower on the date of payment by the Issuing Bank, and,
pursuant to Section 3, the Borrower is then permitted to obtain Revolving Credit
Loans hereunder (without regard to the dollar limitation set forth in subsection
3.2 on the minimum amount of any borrowing), the Borrower shall be deemed to
have requested a borrowing of Revolving Credit Loans consisting of Base Rate
Loans in an aggregate amount equal to such unreimbursed payment. The Revolving
Credit Lenders shall make the requested Revolving Credit Loans as of the date of
such payment by the Issuing Bank, and the proceeds of such Revolving Credit
Loans shall automatically be applied to repay the Issuing Bank for such drawing
in full. In the event that any drawing under a Letter of Credit is not
reimbursed by the Borrower on the date of payment by the Issuing Bank and such
Revolving Credit Loans are not made hereunder for any reason, a default
specified in subsection 10(a) shall have occurred and the Issuing Bank shall
promptly notify the Administrative Agent thereof, and the Administrative Agent
shall promptly notify each Lender. Immediately upon receipt of such notice, the
Revolving Credit Lenders will pay to the Issuing Bank the amount of their
respective participations in the Letter of Credit. In the event that any
Revolving Credit Lender fails timely to make the Revolving Credit Loan or pay
the amount of its participation as required by this subsection 4.3, interest
shall accrue thereon at the Federal Funds Rate for the first three Business Days
following the date of payment by the Issuing Bank and the Federal Funds Rate
plus 1% for the period thereafter to the date of payment thereof by such
Revolving Credit Lender. The Issuing Bank shall distribute to each Revolving
Credit Lender which has paid all amounts payable by it under this subsection 4.3
with respect to any Letter of Credit such Revolving Credit Lender's Pro Rata
Revolving Share of all payments received by the Issuing Bank in reimbursement of
drawings honored by the Issuing Bank under such Letter of Credit when such
payments are received.
4.4 Obligations Absolute. The obligations of the Borrower and the
Revolving Credit Lenders under subsection 4.3 shall be absolute, unconditional
and irrevocable, and shall be performed strictly in accordance with the terms
hereof, under all circumstances whatsoever, including, without limitation, the
circumstances listed below:
(a) any lack of validity or enforceability of this Agreement,
any of the other Loan Documents, any Letter of Credit, any drawings
thereunder or any related contract;
(b) any amendment or waiver of or any consent to any departure
from all or any of this Agreement or any of the other Loan Documents;
(c) the existence of any claim, set-off, defense or other
right which the Borrower at any time may have against the Issuing Bank,
the Administrative Agent, any of the Lenders, any beneficiary or
transferee of any Letter of Credit, or any other Person, whether in
connection with this Agreement, the other Loan Documents, any Letter of
Credit or any unrelated transactions;
30
(d) any statement or any other document presented under any
Letter of Credit that proves to be forged, fraudulent or invalid or
insufficient in any respect or any statement therein that proves to be
untrue or inaccurate in any respect whatsoever;
(e) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate or other document that
does not comply with the terms of such Letter of Credit; or
(f) any other circumstances or happening whatsoever whether or
not similar to any of the foregoing;
provided, however, that neither the Borrower nor the Revolving Credit
Lenders shall have any obligation to the Issuing Bank pursuant to
subsection 4.3 if, but for the willful misconduct or gross negligence
of the Issuing Bank (as determined in a final, non-appealable judgment
by a court of competent jurisdiction), the obligations for which the
Issuing Bank seeks reimbursement or payment would not have arisen.
4.5 Other Lenders. Any action taken or omitted to be taken by the
Issuing Bank under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not put
the Issuing Bank under any resulting liability to any Lender or relieve any
Revolving Credit Lender of its obligations hereunder to the Issuing Bank. In
determining whether to pay under any Letter of Credit, the Issuing Bank shall
have no obligation to the Lenders other than to confirm that any documents
required to be delivered under such Letter of Credit appear to have been
delivered and that they appear to comply on their face with the requirements of
such Letter of Credit.
4.6 Indemnification. The Borrower shall indemnify and hold harmless the
Issuing Bank from and against any and all claims, damages, losses, liabilities,
reasonable out-of-pocket costs and expenses of any kind whatsoever, including
reasonable fees and expenses of attorneys and paralegals that the Issuing Bank
may incur (or that may be claimed against the Issuing Bank by any Person),
together with all reasonable costs and expenses resulting from the compromise or
defense of any claims or liabilities hereinafter described, by reason of or in
connection with (a) the execution and delivery or transfer of, or payment or
failure to pay under, any Letter of Credit, (b) any suit, action or proceeding
brought by any person to require or prevent payment under any Letter of Credit,
or (c) any breach by the Borrower of any warranty, covenant, term or condition
in, or the occurrence of any default under, any of the Loan Documents (to the
extent related to Letters of Credit), any Letter of Credit or any related
contract, together with all reasonable expenses resulting from the compromise or
defense of any claims or liabilities arising as a result of any such breach or
default and defense against any legal action commenced to challenge the validity
of any of such documents; provided, however, that the Borrower shall not be
required to indemnify the Issuing Bank for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent, caused by
(i) the gross negligence or willful misconduct (as determined in a final,
non-appealable judgment in a court of competent jurisdiction) of the Issuing
Bank in determining whether a draft, certificate or other documents presented
under any Letter of Credit complied with the terms of such Letter of Credit, or
(ii) the Issuing Bank's willful failure to pay under any Letter of Credit after
the presentation to it by the beneficiary thereof of a draft, certificate or
other document strictly complying with the terms and
31
conditions of such Letter of Credit. Nothing in this subsection 4.6 is intended
to limit or modify in anyway the reimbursement obligations of the Borrower set
forth in subsection 4.3. In case any action or proceeding is brought against the
Issuing Bank in respect of which indemnity maybe sought under this Agreement,
the Issuing Bank shall promptly give notice of any such action or proceeding to
the Borrower and may require the Borrower, upon such notice, to assume the
defense of the action or proceeding, provided that failure of the Issuing Bank
to give such notice shall not relieve the Borrower of any of its obligations
under this subsection 4.6. Upon receipt of such notice from the Issuing Bank
requesting that the Borrower assume such defense, the Borrower shall resist and
defend such action or proceeding at the Borrower's sole cost and expense. The
obligations of the Borrower under this subsection 4.6 shall survive the
termination of the Letters of Credit and this Agreement.
4.7 Liability of the Issuing Bank. The Borrower assumes all risks of
the acts or omissions of the users of any Letter of Credit and all risks of the
misuse of any Letter of Credit. Neither the Issuing Bank, nor any of its
officers, directors, employees or administrative agents shall be liable or
responsible for: (a) the use which may be made of any Letter of Credit or for
any acts or omissions of any Person and any transferee in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any endorsement
or endorsements thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (c) payment
against presentation of documents which do not comply with the terms of the
applicable Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under any Letter
of Credit, except only that the Borrower shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to the Borrower to the extent, but
only to the extent, of damages suffered by the Borrower which were caused by (i)
the Issuing Bank's gross negligence or willful misconduct as determined in a
final, non-appealable judgment by a court of competent jurisdiction) in
determining whether documents presented under any Letter of Credit comply with
the terms of such Letter of Credit (it being understood that any such
noncompliance in any immaterial respect shall not be deemed gross negligence or
willful misconduct of the Issuing Bank) or (ii) the Issuing Bank's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary thereof of a draft, certificate or other document strictly complying
with the terms and conditions of such Letter of Credit. In furtherance and not
in limitation of the foregoing, 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 unless
the Issuing Bank shall have been ordered not to accept such documents by a court
of competent jurisdiction.
4.8 Letter of Credit Fee. The Borrower agrees to pay to the
Administrative Agent a non-refundable letter of credit fee to be distributed by
the Administrative Agent to each Revolving Credit Lender according to its
Revolving Credit Commitment Percentage, equal to the LC Rate (as defined below)
on the daily amount of outstanding issued Letters of Credit, payable in arrears
on the last day of each successive calendar quarter, commencing on the first
such date to occur after the Closing Date, and on the Tranche A and Revolver
Termination Date. With respect to each Letter of Credit, the Borrower agrees to
pay to the Issuing Bank, solely for the account of the Issuing Bank, (a) a
non-refundable (absent manifest error in the calculation thereof) issuing fee of
1/4 of 1% per annum on the face amount of such Letter of Credit for the term of
such Letter of Credit, payable on the date of issuance thereof for the
three-month period (or shorter term of such Letter of Credit) following the date
of issuance and on each date occurring every three-months after the date of
issuance for such three-month period
32
(or shorter term of such Letter of Credit); and (b) the Issuing Bank's customary
administrative fee. "L/C Rate", as used above, means an interest rate per annum
equal to the Applicable Margin for Eurodollar Loans in effect on the last day of
the fiscal quarter immediately preceding the payment date less 1/4 of 1%, after
giving effect to the proviso to the definition of Applicable Margin.
SECTION 5. GENERAL PROVISIONS APPLICABLE TO COMMITMENTS AND LOANS
5.1 Prepayments.
(a) The Borrower may prepay at any time, in whole or in part,
without premium or penalty (except for Eurodollar Breakage Costs, if
any), upon at least three Business Days' (or in the case of Base Rate
Loans, one Business Day's) irrevocable notice to the Administrative
Agent, specifying the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans, Base Rate Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of any such notice the Administrative Agent shall
promptly notify each affected Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on
the date specified therein, together with any amounts payable pursuant
to subsection 5.11, if any, and, in the case of prepayments of the Term
Loans, accrued interest to such date on the amount prepaid. All amounts
used to prepay Loans pursuant to this subsection 5.1(a) shall be
applied as follows:
First, subject to subsection 5.1(d), to the
prepayment in full of all outstanding Term Loans, including
Eurodollar Breakage Costs, if any, pro rata, among the Tranche
A Term Loans and the Tranche B Term Loans due in the twelve
months following such prepayment,
Second, subject to subsection 5.1(d), to the
prepayment in full of all outstanding Term Loans, including
Eurodollar Breakage Costs, if any, pro rata, among the Tranche
A Term Loans and the Tranche B Term Loans due thereafter,
Third, to the prepayment in full of all outstanding
Swingline Loans, if any,
Fourth, to the prepayment in full of all outstanding
Revolving Credit Loans, including Eurodollar Breakage Costs,
if any, and
Fifth, to a cash collateral account maintained with
the Administrative Agent in respect of the Letters of Credit
Outstanding.
Amounts prepaid on account of the Term Loans may not be
reborrowed. Such partial prepayments shall be in either (i) an
aggregate principal amount of $500,000 or an integral multiple of
$100,000 in excess thereof or (ii) the entire principal amount
outstanding under any Term Loan, together with any accrued interest
thereon.
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(b) If with respect to any of its fiscal years, commencing
with its fiscal year ending December 31, 2000, the Borrower shall have
Excess Cash Flow for such fiscal year, the Loans shall be prepaid,
without penalty or premium (except for Eurodollar Breakage Costs, if
any), and/or the Commitments shall be reduced by an amount ("Available
Excess Cash Flow") equal to (i) in the event Levels IV, V or VI apply,
75% of such Excess Cash Flow and (ii) the event Levels I, II or III
apply, 50% of such Excess Cash Flow as set forth in the second
succeeding sentence. Each such prepayment shall be made on or before
the later of the date which is 90 days after the end of such fiscal
year or the date of delivery of the financial statements referred to in
subsection 8.1(a) but in no event later than the date such financial
statements are required to be delivered. All amounts used to prepay
Loans and/or reduce Commitments pursuant to this subsection 5.1(b)
shall be applied (in the case of prepayments) and/or used (in the case
of Commitment reductions) as follows:
First, subject to subsection 5.1(d), to the
prepayment in full of all outstanding Term Loans, including
Eurodollar Breakage Costs, if any, pro rata, among the Tranche
A Term Loans and the Tranche B Term Loans due in the twelve
months following such payment, and
Second, subject to subsection 5.1(d), to the
prepayment in full of all outstanding Term Loans, including
Eurodollar Breakage Costs, if any, pro rata, among the Tranche
A Term Loans and the Tranche B Term Loans due thereafter,
Third, to the prepayment in full of all Swingline
Loans, if any,
Fourth, to the prepayment in full of all outstanding
Revolving Credit Loans, including Eurodollar Breakage Costs,
if any, and
Fifth, if an Event of Default has occurred and is
continuing, or after application as provided above, an Event
of Default shall be existing, to a cash collateral account
maintained with the Administrative Agent in respect of the
Letters of Credit Outstanding.
If an Event of Default has occurred and is continuing, or
after application as provided above an Event of Default shall be
existing, the Revolving Credit Commitments as then in effect shall be
automatically and permanently reduced to the extent of any remaining
Available Excess Cash Flow. Each prepayment of Term Loans pursuant to
this subsection 5.1(b) may not be reborrowed.
(c) The Net Proceeds of any Covered Sale, Qualifying Insurance
and Other Proceeds and Pension Plan Reversion Proceeds shall be
applied, without penalty or premium (except for Eurodollar Breakage
Costs, if any) toward the prepayment of the Loans, deposit in the cash
collateral account and/or reduction of the Commitments as follows:
First, subject to subsection 5.1(d), to the
prepayment in full of all outstanding Term Loans, including
Eurodollar Breakage Costs, if any, pro rata,
34
among the Tranche A Term Loans and the Tranche B Term Loans
due in the twelve months following such payment,
Second, subject to subsection 5.1(d), to the
prepayment in full of all outstanding Term Loans, including
Eurodollar Breakage Costs, if any, pro rata among the Tranche
A Term Loans and the Tranche B Term Loans due thereafter,
Third, to the prepayment in full of all outstanding
Swingline Loans, if any,
Fourth, to the prepayment in full of all outstanding
Revolving Credit Loans, including Eurodollar Breakage Costs,
if any, provided that if an Event of Default has occurred and
is continuing, or after application as provided above, an
Event of Default shall be existing the Revolving Credit
Commitments shall be automatically and permanently reduced to
the extent of any principal amounts so prepaid, and
Fifth, if an Event of Default has occurred and is
continuing or, after application as provided above, an Event
of Default shall be existing, to a cash collateral account
maintained with the Administrative Agent in respect of the
Letters of Credit Outstanding.
If an Event of Default has occurred and is continuing or, after
application as provided an Event of Default shall be existing, the
Revolving Credit Commitments as then in effect shall be automatically
and permanently reduced to the extent of any remaining Net Proceeds of
any Covered Sale, Qualifying Insurance and Other Proceeds and Pension
Plan Reversion Proceeds. Each prepayment of Term Loans pursuant to this
subsection 5.1(c) may not be reborrowed.
(d) Any Tranche B Lender may (i) so long as any Tranche A Term
Loans are outstanding, elect not to have any optional prepayment made
pursuant to subsection 5.1(a) applied to such Lender's Tranche B Term
Loan until such Tranche A Term Loans have been paid in full, in which
case the amount not so applied shall be utilized to prepay the Tranche
A Term Loans in the manner specified in subsection 5.1(a); and (ii) so
long as any Tranche A Term Loans are outstanding, elect not to have any
mandatory prepayment made pursuant to subsection 5.1(b) or subsection
5.1(c) applied to such Lender's Tranche B Term Loan until all such
Tranche A Terms Loans have been paid in full, in which case the amount
not so applied shall be utilized to prepay the Tranche A Term Loans in
the manner specified in subsection 5.1(b) or subsection 5.1(c), as the
case may be.
5.2 Conversion and Continuation Options.
(a) The Borrower may elect from time to time to convert
Eurodollar Loans to Base Rate Loans by giving the Administrative Agent
at least two Business Days' prior irrevocable notice of such election,
provided that any such conversion of Eurodollar Loans may only be made
on the last day of an Interest Period with respect thereto, unless the
Borrower elects to pay Eurodollar Breakage Costs, in which case the
conversion may be made on any day of the Interest Period. The Borrower
may elect from time to time to
35
convert Base Rate Loans to Eurodollar Loans by giving the
Administrative Agent at least three Business Days' prior irrevocable
notice of such election. Any such notice of conversion to Eurodollar
Loans shall specify the length of the initial Interest Period or
Interest Periods therefor. Upon receipt of any such notice the
Administrative Agent shall promptly notify each affected Lender
thereof. All or any part of outstanding Eurodollar Loans and Base Rate
Loans may be converted as provided herein, provided that (i) no Loan
may be converted into a Eurodollar Loan when any Event of Default has
occurred and is continuing and the Administrative Agent has or the
Required Revolving Credit Lenders (in the case of conversions of
Revolving Credit Loans), Required Tranche A Lenders (in the case of
conversions of Tranche A Term Loans) and Required Tranche B Lenders (in
the case of conversions of Tranche B Term Loans) have determined that
such a conversion is not appropriate and (ii) no Loan may be converted
into a Eurodollar Loan after the date that is one month prior to the
Tranche A and Revolver Termination Date (in the case of conversions of
Revolving Credit Loans) or the date of the final installment of
principal of the Term Loans (in the case of conversions of Term Loans).
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by
the Borrower giving notice to the Administrative Agent, in accordance
with the applicable provisions of the definition of the term "Interest
Period" set forth in subsection 1.1, of the length of the next Interest
Period to be applicable to such Loans, provided that, no Eurodollar
Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Administrative Agent has or the
Required Revolving Credit Lenders (in the case of continuations of
Revolving Credit Loans), Required Tranche A Lenders (in the case of
continuations of Tranche A Term Loans) and Required Tranche B Lenders
(in the case of continuations of Tranche B Term Loans) have determined
that such a continuation is not appropriate or (ii) after the date that
is one month prior to the Tranche A and Revolver Termination Date (in
the case of continuations of Revolving Credit Loans) or the date of the
installment of principal of the Term Loans (in the case of
continuations of Term Loans), and provided, still further, that if the
Borrower shall fail to give any required notice as described above in
this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be automatically converted to Base
Rate Loans on the last day of such then expiring Interest Period.
5.3 Minimum Amounts of Tranches. All borrowings, conversions and
continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto (a) the aggregate principal amount of the
Loans comprising each Tranche shall be equal to $500,000 or a whole multiple of
$100,000 in excess thereof and (b) no more than twelve separate Tranches shall
be outstanding at any time, excluding Tranches required to comply with
subsection 5.8.
5.4 Interest Rates and Payment Dates.
(a) Each Eurodollar Loan shall bear interest for each day
during each Interest Period with respect thereto at a rate per annum
equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
36
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any commitment fee or
other amount payable hereunder or under any other Loan Document shall
not be paid when due (whether at the stated maturity, by acceleration
or otherwise), such overdue amount shall bear interest at a rate per
annum which is 2% over the rate otherwise applicable thereto (or, in
the case of (iii), 2% over the Base Rate), in each case from the date
of such non-payment until such amount is paid in full (before as well
as after the applicable judgment, if any).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (c)
of this subsection shall be payable from time to time on demand.
5.5 Computation of Interest and Fees.
(a) Interest shall be calculated on the basis of a 360-day
year for the actual days elapsed, except that whenever interest is
calculated on the basis of the Prime Rate, interest shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed. Commitment fees and letter of credit fees payable
pursuant to subsections 3.5 and 4.8, respectively, shall be calculated
on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the affected Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on
a Loan resulting from a change in the Base Rate or the Eurocurrency
Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The
Administrative Agent shall as soon as practicable notify the Borrower
and the affected Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the affected Lenders in
the absence of manifest error.
5.6 Inability to Determine Interest Rate. If on the day which is two
Business Days prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate with
respect to any Eurodollar Loan to be outstanding during such Interest
Period, or
(b) the Administrative Agent shall have determined that the
Eurodollar Rate with respect to any Eurodollar Loan to be outstanding
during such Interest Period will not adequately and fairly reflect the
cost to the Lenders of making or maintaining their affected Eurodollar
Loans during such Interest Period,
37
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the Lenders as soon as practicable thereafter. If such notice is
given (x) any affected Eurodollar Loans requested to be made on the first day of
such Interest Period shall be made as Base Rate Loans, (y) any affected Loans
that were to have been converted on the first day of such Interest Period to
Eurodollar Loans, shall be continued as Base Rate Loans and (z) any affected
outstanding Eurodollar Loans that were to have been continued as such shall be
converted on the first day of such Interest Period to Base Rate Loans. Until
such time as the Administrative Agent shall have advised the Borrower and the
Lenders that the circumstances giving rise to such notice no longer exist, no
further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Base Rate Loans to Eurodollar Loans. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
5.7 Pro Rata Treatment and Payments.
(a) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without set-off or counterclaim and shall be
made prior to 2:00 P.M., New York City time, on the due date thereof to
the Administrative Agent, for the account of the Revolving Credit
Lenders, the Term Loan Lenders, the Issuing Bank, the Swingline Bank or
the Administrative Agent, as the case may be, at the Administrative
Agent's office specified in subsection 12.2, in Dollars and in
immediately available funds. Payments received by the Administrative
Agent after such time shall be deemed to have been received on the next
Business Day. The Administrative Agent shall distribute such payments
to the Lenders entitled to receive the same promptly upon receipt in
like funds as received. If any payment hereunder (other than payments
on the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the applicable rate during such extension.
If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to
the next succeeding Business Day (and, with respect to payments of
principal, interest shall be payable thereon at the then applicable
rate during such extension) unless the result of such extension would
be to extend such payment into another calendar month, in which event
such payment shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified
in writing by any Revolving Credit Lender or Term Loan Lender prior to
a Borrowing Date for Revolving Credit Loans or Term Loans, as the case
may be, that such Lender will not make the amount that would constitute
its share of such borrowing on such Borrowing Date available to the
Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and
the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such amount is not
made available to the Administrative Agent by the required time on the
Borrowing Date therefor, such Lender shall pay to the Administrative
Agent, on demand, such amount with interest thereon at a rate equal to
the daily average Federal Funds Rate for the period until such Lender
makes such amount immediately available to the Administrative Agent. A
certificate of the
38
Administrative Agent submitted to any Lender with respect to any
amounts owing under this subsection shall be conclusive in the absence
of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three
Business Days of such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from
the Borrower.
(c) Each borrowing by the Borrower of Tranche A Term Loans,
Tranche B Term Loans and Revolving Credit Loans shall be made ratably
from the Tranche A Lenders, Tranche B Lenders and Revolving Credit
Lenders, respectively, in accordance with their respective Term Loan
Commitment Percentages and Revolving Credit Commitment Percentages. Any
reduction of the Revolving Credit Commitments shall be made ratably
among the Revolving Credit Lenders, in accordance with their respective
Revolving Credit Commitment Percentages.
5.8 Illegality.
(a) Notwithstanding any other provision herein, if the
adoption of or any change in any law or regulation or in the
interpretation thereof by any Governmental Authority charged with the
administration or interpretation thereof shall make it unlawful for any
Lender to make or maintain Eurodollar Loans as contemplated by this
Agreement, or to give effect to its obligations as contemplated hereby
with respect to any Eurodollar Loan, then, by written notice to the
Borrower and to the Administrative Agent, such Lender may:
(i) declare Eurodollar Loans will not thereafter be
made by such Lender for the duration of such illegality
hereunder, whereupon any request by the Borrower for a
Eurodollar Loan shall, as to such Lender only, be deemed a
request for a Base Rate Loan unless such declaration is
subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans
made by such Lender be converted to Base Rate Loans, in which
event all such Eurodollar Loans shall be automatically
converted to Base Rate Loans as of the effective date of such
notice as provided in paragraph (b) below, and in which event
all Eurodollar Breakage Costs shall be paid by such Lender.
In the event any Lender shall exercise its rights under (i) or (ii)
above, all payments and prepayments of principal which would otherwise
have been applied to repay the Eurodollar Loans that would have been
made by such Lender or the converted Eurodollar Loans of such Lender
shall instead be applied to repay the Base Rate Loans made by such
Lender in lieu of, or resulting from the conversion of, such Eurodollar
Loans.
(b) For purposes of this subsection 5.8, a notice to the
Borrower by any Lender shall be effective, if lawful, on the last day
of the then current Interest Period; in all other cases such notice
shall be effective on the date of receipt by the Borrower.
39
5.9 Requirements of Law.
(a) If after the date of this Agreement the adoption of or any
change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
administration or interpretation thereof (whether or not having the
force of law):
(i) shall change the basis of taxation of payments to
any Lender in respect of the principal of or interest on any
Eurodollar Loan made by such Lender or any fees or other
amounts payable hereunder (other than taxes imposed on or
measured by the overall net income of such Lender by the
jurisdiction in which such Lender has its principal office (or
any lending office) or by any political subdivision or taxing
authority therein);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or other similar
requirement against assets of, deposits with or for the
account of, or other extensions of credit by, any office of
such Lender (which requirement is not otherwise included in
the determination of the Eurodollar Rate); or
(iii) shall impose on such Lender any other condition
affecting this Agreement or Eurodollar Loans made by such
Lender;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans, or to
reduce any amount receivable hereunder in respect thereof by an amount
deemed by such Lender to be material, then, in any such case, the
Borrower shall pay to such Lender, any additional amounts necessary to
compensate such Lender for such increased cost incurred or reduction
suffered. If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall promptly notify the
Borrower, through the Administrative Agent, of the event by reason of
which it has become so entitled. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) If Lender shall have determined that the applicability of
any law, rule, regulation or guideline adopted after the date hereof
pursuant to or arising out of the July 1988 report of the Basic
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards", or the adoption after the date hereof of any other law,
rule, regulation or guideline regarding capital adequacy, or any change
in any of the foregoing or in the interpretation or administration of
any of the foregoing by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender or any Lender's holding company
with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's or such holding company's
capital as a consequence of its obligations hereunder to a level below
that which such Lender or
40
such holding company could have achieved but for such adoption, change
or compliance (taking into consideration such Lender's or such holding
company's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the
Administrative Agent) of a written request therefor, the Borrower shall
pay to such Lender such additional amount or amounts as will compensate
such Lender for any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding
company as specified in paragraph (a) or (b) above, as the case may be,
shall be delivered to the Borrower (with a copy to the Administrative
Agent) 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 twenty Business Days after its receipt of the
same.
5.10 Taxes.
(a) All payments made by the Borrower under this Agreement and
the Notes shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future taxes, levies,
imposts, charges, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority,
excluding (i) net income taxes, franchise taxes, or any other taxes
imposed on or measured by the net income or profits of the
Administrative Agent or such Lender, in each case by the jurisdiction
under the laws of which the Administrative Agent or such Lender is
organized or any political subdivision thereof or by the jurisdiction
in which any lending or issuing office of the Administrative Agent or
such Lender is located or any political subdivision thereof and (ii)
U.S. withholding taxes payable with respect to payments hereunder under
laws (including any treaty, ruling, determination or regulation) in
effect on the date hereof, but not any increase in U.S. withholding tax
not otherwise covered by subsection (i), resulting from any subsequent
change in such laws occurring (x) after the date hereof in the case of
the Administrative Agent and any Lender as of the date of this
Agreement, and (y) in the case of any other Lender, the date of
assignment and acceptance pursuant to which it became a Lender (all
such non-excluded taxes, levies, imposts, charges, deductions and
withholdings the "Non-Excluded Taxes"). 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 that arise
from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement ("Other
Taxes"). If any Non-Excluded Taxes or Other Taxes are required by law
to be withheld from any amounts payable to the Administrative Agent or
any Lender hereunder or under the Notes, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent or such Lender interest
or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes. Whenever any
Non-Excluded Taxes or Other Taxes are payable by the Borrower, upon
receipt thereof the Borrower shall send to the Administrative Agent for
its own account or for the account of such Lender, as the case may be,
a certified copy of any original
41
official receipt received by the Borrower showing payment thereof. The
Borrower shall indemnify the Administrative Agent and the Lenders for
the full amount of Non-Excluded Taxes, Other Taxes and any taxes
imposed by any jurisdiction on amounts payable under this subsection
5.10(a) that are paid by such Lender or Administrative Agent,
(including penalties, interest and expenses arising therefrom or with
respect thereto). If the Borrower determines in good faith that a
reasonable basis exists for contesting any Non-Excluded Taxes or Other
Taxes, such Lender or the Administrative Agent shall cooperate with the
Borrower in challenging such Non-Excluded Taxes or Other Taxes at the
Borrower's expense if requested by the Borrower (it being understood
and agreed that the Administrative Agent or such Lender shall have no
obligation to contest or responsibility for contesting such
Non-Excluded Taxes or Other Taxes). If any Lender receives a refund in
respect of any Non-Excluded Taxes or Other Taxes for which such Lender
has received payment from the Borrower hereunder, such Lender shall,
within 30 days of receipt by such Lender, repay such refund to the
Borrower, provided that the Borrower, upon the request such Lender,
agrees to return such refund (plus any penalties, interest or other
charges) to the Lender in the event such Lender is required to repay
such refund. The agreements in this subsection shall survive the
Termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) in the case of a Lender that is a "bank" under
Section 881(c)(3)(A) of the Code:
(A) on or before the date of the first
payment to such Lender pursuant to this Agreement
following the Closing Date or on or before the
effective date of the Assignment and Acceptance,
deliver to the Borrower and the Administrative Agent
(x) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and
(y) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
(B) deliver to the Borrower and the
Administrative Agent two further copies of any such
form or certification on or before the date that any
such form or certification expires or becomes
obsolete and promptly upon the occurrence of any
event requiring a change in the most recent form
previously delivered by it to the borrower; and
(C) obtain such extensions of the time for
filing and complete such forms or certifications as
may reasonably be requested by the Borrower or the
Administrative Agent; or
42
(ii) in the case if a Lender that is not a "bank"
under Section 881(c)(3)(A) of the Code:
(A) deliver to the Borrower and the
Administrative Agent (I) a statement under penalties
of perjury that such Lender (x) is not a "bank" under
Section 881(c)(3)(A) of the Code, is not subject to
regulatory or other legal requirements as a bank in
any jurisdiction, and has not been treated as a bank
for purposes of any tax, securities law or other
filing or submission made to any Governmental
Authority, any application made to a rating agency or
qualification for any exemption from tax, securities
law or other legal requirements, (y) is not a
10-percent shareholder within the meaning of Section
881(c)(3)(B) of the Code and (z) is not a controlled
foreign corporation receiving interest from a related
person within the meaning of Section 881(c)(3)(C) of
the Code and (II) an Internal Revenue Service Form
W-8;
(B) deliver to the Borrower and the
Administrative Agent a further copy of said Form W-8,
or any successor applicable form or other manner of
certification on or before the date that any such
Form W-8 expires or becomes obsolete or after the
occurrence of any event requiring a change in the
most recent form previously delivered by such Lender;
and
(C) obtain such extensions of time for
filing and complete such forms or certifications as
may be reasonably requested by the Borrower or the
Administrative Agent;
unless in any such case an event (including, without limitation, any
challenge in treaty, law or regulation) has occurred prior to the date
on which any such delivery would otherwise be required which renders
any such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Administrative Agent. Such
Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the
case of a Form W-8 or W-9, that it is entitled to exemption from United
States backup withholding tax. Each Person that shall become a
Participant pursuant to subsection 12.6 shall, upon the effectiveness
of the related transfer, be required to provide all of the forms and
statements required pursuant to this subsection to the Lender from
which the related participation shall have been purchased.
5.11 Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto or (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked), then, in any
such event, the Borrower shall compensate each Lender for the Eurodollar
Breakage Costs. A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall
43
be delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
5.12 Change of Lending Office. Each Lender agrees that it will use all
reasonable efforts (so long as such designation would not be adverse to it, as
determined in its sole judgment) to designate a lending office or a different
lending office if the making of such a designation would reduce or obviate the
need for the Borrower to make payments under subsection 5.9 or 5.10(a), or would
eliminate or reduce the effect of any adoption or change described in subsection
5.8.
5.13 Increased Payments by Borrower. For purposes of subsection 5.8(a),
and 5.9 and 5.10, in the event that the amount that the Borrower is required to
pay to or for the account of any Lender is increased in any material respect as
a result of any payments required to be made by the Borrower, the Borrower shall
have the right, upon notice to such Lender (with a copy to the Administrative
Agent), to either (i) require such Lender to assign to one or more assignees
specified by the Borrower, and acceptable to the Administrative Agent, who are
willing to so purchase from such Lender all (but not less than all) of such
Lender's rights and obligations under this Credit Agreement provided that such
assignee or assignees shall pay to such Lender, in consideration for such
assignment, an amount equal to all principal, interest, fees and other amounts
owing to such Lender as of the date of such assignment or (ii) upon the approval
of the majority of the Lenders, prepay the principal amount of the Loans held by
such Lender plus all interest, fees and other amounts owing to such Lender as of
the date of such prepayment, with the Commitments of all of the Lenders reduced
pro rata by the amount of the Commitment of such Lender.
SECTION 6. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent, the Issuing Bank, the Swingline
Bank and the Lenders to enter into this Agreement, to make the Loans and to
issue Letters of Credit, the Borrower hereby represents and warrants to the
Administrative Agent, the Issuing Bank, the Swingline Bank and each Lender that:
6.1 Corporate Existence; Compliance with Law. Each Loan Party (a) is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate power and authority to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except where the failure to so qualify
would not have a Material Adverse Effect and (d) is in compliance in all
material respects with all Requirements of Law except for such failures in
compliance that could not reasonably be expected to have a Material Adverse
Effect.
6.2 Corporate Power, Authorization; Enforceable Obligations. Each Loan
Party has the corporate power and authority to make, deliver and perform the
Loan Documents to which it is a party, in the case of the Borrower, to borrow
hereunder and taken all necessary corporate action to authorize the borrowings
on the terms and conditions of this Agreement and any Notes
44
and to authorize the execution, delivery and performance of the Loan Documents
to which it is a party. No consent, approval or authorization of, filing with,
notice to or other act by any Governmental Authority of any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery and performance of the Loan Documents to which any Loan Party is a
party or in connection with the transactions contemplated thereby, other than
(a) filings and recordings in order to perfect the Liens in favor of the
Administrative Agent for the benefit of the Lenders created by the Mortgages and
the recording of the Mortgages in the appropriate recording office, (b) such
orders, consents, approvals and authorizations of, and all notices and all
written assumptions of obligations to, Governmental Authorities and any other
Persons with respect to which the Loan Parties are to be indemnified or which
have been heretofore obtained, made or given and are in full force and effect,
and complete and correct copies of which have heretofore been furnished to the
Administrative Agent, (c) filings of Uniform Commercial Code financing
statements listed in Schedule 6.18 or, for other types of collateral with
respect to which such filings would not be effective to perfect a security
interest, other documents, in the appropriate filing offices in the appropriate
jurisdictions in favor of the Administrative Agent for the benefit of the
Lenders, (d) filings related to any trademarks of the Borrower or its
Subsidiaries to perfect the Liens of the Administrative Agent for the benefit of
the Lenders created by any Subsidiary Trademark Security Agreement and (e) such
consents as may be required for the granting of Leasehold Mortgages and
Leasehold Encumbrances as listed in Schedule 6.2. This Agreement has been, and
each other Loan Document to which any Loan Party is or will be a party will be,
duly executed and delivered on behalf of such Loan Party that is a party
thereto. This Agreement constitutes, and each other Loan Document to which any
Loan Party is or will be a party when executed and delivered will constitute, a
legal, valid and binding obligation of each Loan Party thereto enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles, (whether enforcement is sought by proceedings in equity or
at law).
6.3 No Legal Bar. The execution, delivery and performance of the Loan
Documents to which any Loan Party is a party, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
indenture, agreement or other instrument to which any Loan Party is a party or
by which it or any of its property is bound, will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any such Requirement of Law or any such indenture,
agreement or other instrument and all applicable waiting periods pursuant to any
Requirement of Law shall have expired without any occurrence of any adverse
action or omission by any competent authority.
6.4 No Material Litigation. Except as set forth on Schedule 6.4, no
action, suit, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or against any Loan Party or against any of their
respective properties or revenues (a) with respect to any of the Loan Documents
or any of the transactions contemplated hereby or thereby, (b) which purports to
affect the Commitments, or the rights of, or the remedies available to, the
Lenders, or (c) which could reasonably be expected to have a Material Adverse
Effect.
45
6.5 Financial Condition.
(a) (i) The unaudited pro forma combined and combining balance
sheets of the Borrower as of September 30, 1999 and the related
statements of income, shareholders' equity and cash flows for the
nine-month period ended on such date (all such pro forma financial
statements, the "Borrower Pro Forma Financial Statements"), copies of
which have heretofore been furnished to each Lender, have been
certified by a Responsible Officer and were prepared based on good
faith assumptions and on the best information available to the Borrower
as of the date of delivery thereof and fairly present on a pro forma
basis the consolidated financial positions of the Borrower as of
September 30, 1999. (ii) The consolidated audited balance sheet of the
Borrower as of December 31, 1998 and the unaudited balance sheet of
Borrower as of September 30, 1999 and the related statements of income,
shareholders' equity and cash flows for the year and nine-months
periods ended on such dates; copies of which have heretofore been
furnished to each Lender, have been certified by a Responsible Officer
and were prepared based on good faith assumptions and on the best
information available to the Borrower as of the date of delivery
thereof and fairly present the consolidated financial positions of
Borrower and its consolidated Subsidiaries as of December 31, 1998 and
September 30, 1999.
(b) Neither Borrower nor its Subsidiaries had at September 30,
1999 any liability or obligation pursuant to any contract or agreement
that would be required to be reflected on a balance sheet prepared on
such date in accordance with GAAP, or any other material obligation or
liability, including, without limitation, any Guarantee Obligation,
contingent liability or liability for taxes, or any long term lease or
unusual forward or long-term commitment, including, without limitation,
any Interest Rate Agreement or foreign currency swap or exchange,
which, in any of the foregoing cases, is not reflected in the foregoing
financial statements or disclosed on Schedule 6.5(b)(1). Except as set
forth on Schedule 6.5(b)(2), during the period September 30, 1999 to
and including the date hereof there has been no sale, transfer or other
disposition by any of Borrower or any of its Subsidiaries of any
material part of their businesses or property and no purchase or other
acquisition of any business or property (including any capital stock of
any other Person) material in relation to the consolidated financial
statements of the Borrower at September 30, 1999.
6.6 No Material Adverse Change. Since September 30, 1999, there has
been no material adverse change, in the aggregate, in the business, operations,
properties, assets, liabilities or condition (financial or otherwise) or
prospects of Borrower and its Subsidiaries, taken as a whole.
6.7 No Default. Except for the matters relating to the Excluded
Businesses for which the Loan Parties will be indemnified and the matters
identified on Schedule 6.7 hereto, no Loan Party is in default under or with
respect to any indenture, agreement or other instrument to which such Loan Party
is a party or by which it or any of its property is bound in any respect which
could reasonably be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.
46
6.8 Ownership of Property; Liens. Each Loan Party has good record and
marketable title (except for such encumbrances or restrictions arising in the
ordinary course of business which do not materially restricted the intended use
of such property) in fee simple to, or a valid leasehold interest in, all its
real property, and good title to, or a valid leasehold interest in, all its
other material property except for the Excluded Businesses and such minor
defects in title that do not affect the ability to use such property in the
conduct of its business, and none of such property is subject to any Lien except
as set forth on Schedule 6.8 or as permitted by subsection 9.3.
6.9 Conduct of Business. At the date hereof, the Borrower and its
Subsidiaries hold all authorizations, consents, approvals, registrations,
franchises, licenses and permits, with or from Governmental Authorities and
other Persons as are required or necessary for them to own their properties and
conduct their business as now conducted, except where the failure to hold any
such authorization, consent, approval, registration, franchise, license or
permit is not, in any one case or in the aggregate, reasonably expected to have
a Material Adverse Effect.
6.10 Intellectual Property. Each Loan Party owns, or is licensed to use,
all trademarks, tradenames, copyrights, technology, know-how and processes
necessary for the conduct of its business as currently conducted except for
those the failure to own or license which could not reasonably be expected to
have a Material Adverse Effect (the "Intellectual Property"). To the knowledge
of the Borrower or any Subsidiary, no claim has been asserted or is pending by
any Person challenging or questioning the use of any such Intellectual Property
by any Loan Party or the validity or effectiveness of any such Intellectual
Property except for such claims which even if successful could not reasonably be
expected to have a Material Adverse Effect, nor does the Borrower or any
Subsidiary know of any valid basis for any such claim. The use of such
Intellectual Property by any Loan Party does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
6.11 Taxes. Each Loan Party has filed or caused to be filed all federal,
state and local tax returns which, to the knowledge of the Borrower or any
Subsidiary, are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other material taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any the amount or
validity of which are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of such Loan Party).
6.12 Federal Regulations. No part of the proceeds of any Loan will be used
to purchase or carry, or to reduce or retire or refinance any credit incurred to
purchase or carry, or extend credit to others for the purpose of purchasing or
carrying, any "margin stock" as defined in Regulation U of the Board of
Governors of the Federal Reserve System. The making of the Loans hereunder and
the use of the proceeds thereof as contemplated hereby will not violate or be
inconsistent with any of the provisions of Regulation U, T or X of the Board of
Governors.
6.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA and whether or not waived) has occurred during the five-year period prior
to the date on which this representation is
47
made or deemed made with respect to any Plan that remains outstanding in any
respect and that could reasonably be expected to have a Material Adverse Effect,
and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code. Neither the Company nor any of its
subsidiaries has provided, or is required to provide, security to any pension
plan or to any Single-Employer Plan of an ERISA Affiliate pursuant to Section
401(a)(29) of 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 such five-year
period that resulted in any material liability. The present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits. Neither the Borrower nor
any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither the Borrower nor any Commonly Controlled Entity
would become subject to any liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made and, to the knowledge of the Borrower or
any of its Subsidiaries, no such Multiemployer Plan is in Reorganization or
Insolvent, except in each instance where such liability, reorganization or
insolvency could not reasonably be expected to have a Material Adverse Effect.
Except as disclosed on Schedule 6.13, the present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Borrower for
post retirement benefits to be provided to its current and former employees
under Plans which are welfare benefit plans (as defined in Section 3(1) of
ERISA) does not, in the aggregate, exceed the assets under all such Plans
allocable to such benefits by an amount which could reasonably be expected to
have a Material Adverse Effect. Each Commonly Controlled Entity that has
liability for post-retirement benefits has adopted Financial Accounting Standard
No. 106.
6.14 Investment Company Act; Other Regulations. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940 as amended. The
Borrower is not subject to regulation under any federal or state statute or
regulation which limits its ability to incur Indebtedness.
6.15 Subsidiaries. The Persons listed on Schedule 6.15 constitute all the
Subsidiaries of the Borrower at the date of the Amendment. Such Schedule
identifies the state or country of incorporation of each such Subsidiary and, if
such Subsidiary is not a direct wholly-owned Subsidiary of the Borrower, the
percentage ownership of such Subsidiary directly or indirectly owned by the
Borrower and the ownership chain for such Subsidiary. In each case, such direct
or indirect ownership is free and clear of any Lien, charge or other
encumbrance.
6.16 Environmental Matters.
(a) Except as disclosed on Schedule 6.16, no real estate currently
or formerly owned or leased by the Borrower or any of its Subsidiaries
contains, and, to the knowledge of the Borrower or any Subsidiary, has
previously contained, any Materials of Environmental Concern in amounts or
concentrations which could reasonably be
48
expected to give rise to a material liability to Borrower or any of its
Subsidiaries under any Environmental Law.
(b) Except as disclosed in Schedule 6.16, all real estate currently
or formerly owned or leased by the Borrower and its Subsidiaries and all
operations thereon are in material compliance with all applicable
Environmental Laws, and, to the knowledge of the Borrower or any
Subsidiary, there is no contamination at, under or about such real estate
or violation of any Environmental Law with respect to such real estate or
the business operated by any Loan Party (the "Business") which could
reasonably be expected to have a Material Adverse Effect or interfere with
the continued operation of such real estate.
(c) Except as disclosed in Schedule 6.16, there are no existing or,
to the knowledge of the Borrower or any Subsidiary, potential
Environmental Claims against the Borrower or any of its Subsidiaries, and
neither the Borrower nor any of its Subsidiaries has received any notice
of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental
Laws with regard to any of the real estate currently or formerly owned,
leased or operated by the Borrower or any of its Subsidiaries or the
Business which could reasonably be expected to have a Material Adverse
Effect.
(d) Except as disclosed in Schedule 6.16, Materials of Environmental
Concern have not been transported or disposed of from the real estate
currently or formerly owned, leased or operated by the Borrower or any of
such Subsidiaries in violation of, or in a manner or to a location which
could give rise to material liability under, any Environmental Law, nor
have any Materials of Environmental Concern been generated, treated,
released, stored or disposed of at, on or under any of such real estate in
violation of, or in a manner that could reasonably be expected to give
rise to material liability under, any applicable Environmental Law.
(e) Except as disclosed in Schedule 6.16, no judicial proceeding or
governmental or administrative action is pending or, to the knowledge of
the Borrower or any Subsidiary threatened, under any Environmental Law to
which any Loan Party is or will be named as a party with respect to any
real estate currently or formerly owned, leased or operated by the
Borrower or any of its Subsidiaries or the Business which could reasonably
be expected to have a Material Adverse Effect, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to such real estate or the Business
which could reasonably be expected to have a Material Adverse Effect.
(f) There have been no environmental investigations, studies,
audits, or other environmental assessments conducted by or which are in
the possession of any of the Loan Parties which have not been delivered to
the Administrative Agent, with a copy for each Lender.
49
(g) No matter disclosed on Schedule 6.16 nor any aggregation of such
matters could reasonably be expected to have a Material Adverse Effect.
6.17 Regulation H. No Mortgage encumbers improved real property which is
located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968.
6.18 Security Documents.
(a) The security interest created by the Pledge Agreements is
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Lenders, a legal, valid and enforceable security interest
in accordance with their respective terms in the pledged securities
described therein and proceeds thereof and, assuming that the
Administrative Agent took possession of and held the pledged securities in
good faith and had no notice of any adverse claim on the Closing Date or
such later date on which the Administrative Agent so took possession,
constitutes a perfected first lien on, and security interest in, all
right, title and interest of the pledgor party thereto in the pledged
securities described therein.
(b) The security interest created by the Mortgages is effective to
grant to the Administrative Agent, for the ratable benefit of the Lenders,
legal, valid and enforceable mortgage liens in accordance with their
respective terms on all of the right, title and interest of each Loan
Party thereto in the mortgaged property described therein. Such Mortgages,
when recorded in the appropriate recording office, will constitute
perfected first liens on, and security interest in, such mortgaged
property, subject to no other Liens, other than Permitted Liens.
(c) The security interest created by the Security Agreements is
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Lenders, a legal, valid and, assuming the filing of the
appropriate financing statements and continuation statements in the
appropriate filing offices identified on Schedule 6.18, enforceable fully
perfected security interest of first priority in accordance with their
respective terms in all right, title and interest of the Borrower and each
of the Borrower's Subsidiaries in the Collateral described therein,
subject to no other Liens, other than Permitted Liens.
6.19 Accuracy of Information. All written information relating to the
Borrower and its Subsidiaries which has been given to the Administrative Agent
or any Lender is to the best of the knowledge of the Borrower true and correct
in all material respects as of the date given, does not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading and, with respect to projections and
other forward looking information, is based on reasonable assumptions, in each
case, as of the date provided to the Administrative Agent or any Lender.
6.20 Insurance. All of the properties and operations of the Borrower and
its Subsidiaries of a character usually insured by companies of established
reputation engaged in the same or a similar business similarly situated are
adequately insured, by reputable insurers
50
reasonably believed to be financially sound, against loss or damage of the kinds
and in amounts customarily insured against by such Persons, and the Borrower and
its Subsidiaries carry, with such insurers in customary amounts, such other
insurance as is usually carried by companies of established reputation engaged
in the same or a similar business similarly situated. Schedule 6.20 lists all
insurance maintained by the Borrower and its Subsidiaries as of the Closing
Date.
6.21 Solvency. As of the Closing Date, giving effect to the
Recapitalization and the other transactions contemplated hereby, the Borrower
and the Loan Parties as a whole are Solvent.
6.22 Labor Relations. Except as listed in Schedule 6.22, neither the
Borrower nor any of its Subsidiaries is engaged in any unfair labor practice
that could reasonably be expected to have a Material Adverse Effect and there is
(i) no unfair labor practice complaint pending against the Borrower or any of
its Subsidiaries or, to the knowledge of the Borrower or any Subsidiary,
threatened against any of them, before the National Labor Relations Board, and
no material grievance or arbitration proceeding arising, out of or under any
collective bargaining agreement is so pending against the Borrower or any of its
Subsidiaries or, to the knowledge of the Borrower or any Subsidiary, threatened
against any of them that could reasonably be expected to have a Material Adverse
Effect, (ii) no strike, labor dispute, slow down or stoppage pending against the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower or any
Subsidiary, threatened against the Borrower or any of its Subsidiaries that
could reasonably be expected to have a Material Adverse Effect and (iii) to the
knowledge of the Borrower or any Subsidiary, no union representation proceeding
is pending with respect to the employees of the Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect.
6.23 Indebtedness. Schedule 6.23 sets forth a true and complete list of
all Indebtedness (excluding the Term Loans, the Revolving Credit Loans and the
Letter of Credit Outstanding) of the Borrower and its respective Subsidiaries as
of the initial Borrowing Date and which is to remain outstanding, in each case
showing the aggregate principal amount thereof and the name of the respective
borrower and any other entity which directly or indirectly guaranteed such debt.
6.24 Year 2000 Compliance. Except as disclosed on Schedule 6.24, the
Borrower has (i) completed a review and assessment of all areas within the
business and operations of the Borrower and each of its Subsidiaries other than
Exempted Subsidiaries (including those areas affected by suppliers and vendors)
that could be adversely affected by the "YEAR 2000 PROBLEM" (that is, the risk
that computer applications used by it or any of its Subsidiaries other than
Exempted Subsidiaries (or their respective suppliers and vendors) may be unable
to properly recognize and perform date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis and (iii) to
date, implemented such plan in accordance with such timetable. The Borrower
reasonably believes that all computer applications (including those of suppliers
and vendors) that are material to the business or operations of the Borrower or
any of its Subsidiaries other than Exempted Subsidiaries will on a timely basis
be able to properly perform date-sensitive functions for all dates before and
from and after January 1, 2000 (that is, be "YEAR 2000 COMPLIANT"), except to
the extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
51
SECTION 7. CONDITIONS PRECEDENT
7.1 Conditions to Initial Loans. The agreement of each Lender to make the
initial Loans requested to be made by it and of the Issuing Bank to issue the
initial Letters of Credit requested to be issued hereunder are subject to the
satisfaction, immediately prior to or concurrently with the making of any such
Loan on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
this Agreement, executed and delivered by a duly authorized officer of the
Borrower, with a counterpart for each Lender, (ii) for the account of each
Revolving Credit Lender, a Revolving Credit Note conforming to the
requirements hereof and executed by a duly authorized officer of the
Borrower, (iii) for the account of each Tranche A Lender, a Tranche A Term
Note conforming to the requirements hereof and executed by a duly
authorized officer of the Borrower, (iv) for the account of each Tranche B
Lender, a Tranche B Term Note conforming to the requirements hereof and
executed by a duly authorized officer of the Borrower, (v) each of the
Pledge Agreements, each executed and delivered by a duly authorized
officer of each Loan Party thereto, with a counterpart for the
Administrative Agent and a counterpart or a conformed copy for each
Lender, (vi) each of the Subsidiary Guarantees, each executed and
delivered by a duly authorized officer of each Loan party thereto, with a
counterpart for the Administrative Agent and a counterpart or a conformed
copy for each Lender and (vii) each of the Security Agreements, each
executed and delivered by a duly authorized officer of each Loan party
thereto, with a counterpart for the Administrative Agent and a counterpart
or a conformed copy for each Lender and (viii) each of the Mortgages
covering the Mortgaged Properties listed on Schedule II, each executed and
delivered by a duly authorized officer of each Loan party thereto, with a
counterpart for the Administrative Agent and a counterpart or a conformed
copy for each Lender. In the event that any Letters of Credit are to be
issued on the Closing Date, the Administrative Agent shall have received a
Letter of Credit Request from the Borrower with respect to each such
Letter of Credit as provided in Section 4.1.
(b) Closing Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, with appropriate insertions and
attachments, reasonably satisfactory in form and substance to the
Administrative Agent, executed by a Responsible Officer of the Borrower.
(c) Corporate Proceedings of the Borrower. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of the Borrower
authorizing (i) the execution, delivery and performance of this Agreement
and the other Loan Documents to which it is a party and the consummation
of the Recapitalization, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the Liens created pursuant to the Borrower
Security Documents, certified by a Responsible Officer, of the Borrower as
of the Closing Date, which certificate shall be in form and substance
reasonably satisfactory to the Administrative Agent and shall state
52
that the resolutions thereby certified have not been amended, modified,
revoked or rescinded.
(d) Borrower Incumbency Certificate. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, as to the incumbency and signature of
the officers of the Borrower executing any Loan Document, reasonably
satisfactory in form and substance to the Administrative Agent, executed
by a Responsible Officer of the Borrower.
(e) Corporate Proceedings of Subsidiaries. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance reasonably satisfactory to the
Administrative Agent, of the Board of Directors of each Subsidiary of the
Borrower which is a party to a Loan Document authorizing (i) the
execution, delivery and performance of the Loan Documents to which it is a
party and (ii) the granting by it of the Liens created pursuant to the
Subsidiary Security Documents to which it is a party, certified by a
Responsible Officer of each such Subsidiary as of the Closing Date, which
certificate shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified, revoked or rescinded.
(f) Subsidiary Incumbency Certificates. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of
each Subsidiary of the Borrower which is a Loan Party, dated the Closing
Date, as to the incumbency and signature of the officers of such
Subsidiaries executing any Loan Document, reasonably satisfactory in form
and substance to the Administrative Agent, executed by a Responsible
Officer of each such Subsidiary.
(g) Corporate Documents. The Administrative Agent shall have
received, with a copy for each Lender, true and complete copies of the
certificate of incorporation and by-laws of each Loan Party, certified as
of the Closing Date as complete and correct copies thereof by a
Responsible Officer of such Loan Party.
(h) Business Plan and Closing Financial Certificate. The
Administrative Agent shall have received, with a copy for each Lender, a
certificate of a Responsible Officer, substantially in the form of Exhibit
L.
(i) Corporate and Capital Structure. The corporate and pro forma
capital structure of the Borrower and each of its Subsidiaries after
giving effect to the consummation of the Recapitalization, the
transactions contemplated by this Agreement and the other transactions
contemplated hereby and thereby shall be as specified on Schedule 7.1(i)
or otherwise as shall be reasonably satisfactory to the Administrative
Agent.
(j) Consents, Approvals, etc. The Administrative Agent shall have
received, with a copy for each Lender, a certificate of a Responsible
Officer of the Borrower attaching a true and correct copy of each
Governmental Authority third party approval (other than landlord consents)
necessary in connection with the transactions contemplated
53
by the Loan Documents, or certifying that true and correct copies of all
such approvals have been delivered by the Borrower to the Administrative
Agent, with a copy for each of the Lenders, and that such approvals have
not been rescinded, amended or modified in any manner. Without limiting
the generality of the foregoing, the Administrative Agent shall have
received, with a copy for each Lender, a certificate of a Responsible
Officer of the Borrower certifying that the execution, delivery and
performance of the Loan Documents by the Loan Parties in accordance with
their respective terms (i) do not violate any provision of any debt
instrument, security agreement or other material contract to which the
Borrower or any Subsidiary (other than any Exempted Subsidiary) is a party
and (ii) do not constitute a default or event of default under such
contract.
(k) Fees and Expenses. The Administrative Agent shall have received
reasonably satisfactory evidence that the fees and expenses to be incurred
by the Borrower and its Subsidiaries in connection with the
Recapitalization and the transactions contemplated hereby and thereby will
not exceed $5,000,000.
(l) Filings. Except with respect to Leasehold Mortgages which have
not been delivered as of the Closing Date, all filings and other actions
required to create and perfect a first priority security interest in favor
of the Administrative Agent for the benefit of the Lenders on all
Collateral owned or to be owned by the Borrower and its Subsidiaries
(other than any Exempted Subsidiary) shall have been duly made or taken,
and all such Collateral shall be free and clear of other Liens except
Liens permitted under the Loan Documents. Except with respect to Leasehold
Mortgages which have not been delivered as of the Closing Date, to the
extent that all filings and other actions required to create and perfect a
first priority security interest in the Collateral are not made or taken
on or prior to the Closing Date, the Administrative Agent and the Lenders
shall be reasonably satisfied that the filings or other actions made or
taken on or prior to the Closing Date are sufficient to give the Lenders
the practical benefit of the Collateral and that all other filings and
other actions which have not been made or taken on or prior to the Closing
Date will be completed as soon as practicable after the Closing Date.
(m) Lien Searches. The Administrative Agent shall have received the
results of a recent search by a Person satisfactory to the Administrative
Agent, of the Uniform Commercial Code, judgment and tax lien filings which
may have been filed with respect to personal property of each Loan Party,
and the results of such search shall reveal no Liens on any of the assets
of the Borrower or its Subsidiaries except for Liens permitted under the
Loan Documents.
(n) Pledged Stock; Stock Powers. The Administrative Agent shall have
received the certificates representing the shares pledged pursuant to each
of the Pledge Agreements, together with an undated stock power for each
such certificate executed in blank by a duly authorized officer of the
pledgor thereof.
(o) Title Insurance Policy. The Administrative Agent shall have
received in respect of each parcel covered by each Mortgage to be
delivered on the Closing Date a mortgagee's title policy (or policies) or
marked up unconditional binder for such insurance dated the Closing Date.
Each such policy shall (i) be in an amount set forth on
54
Schedule 7.1(o), not to exceed the fair market value of such parcel; (ii)
be issued at ordinary rates; (iii) insure that the Mortgage insured
thereby creates a valid first Lien on such parcel free and clear of all
defects and encumbrances, except as set forth in Schedule 6.8; (iv) name
the Administrative Agent for the benefit of the Lenders as the insured
thereunder; (v) be in the form of ALTA Loan Policy-1970; (vi) contain such
endorsements and affirmative coverage as the Administrative Agent may
request and (vii) be issued by title companies reasonably satisfactory to
the Administrative Agent (including any such title companies acting as
co-insurers or reinsurers, at the option of the Administrative Agent). The
Administrative Agent shall have received evidence reasonably satisfactory
to it that all premiums in respect of each such policy, and all charges
for mortgage recording tax, if any, have been paid.
(p) Copies of Documents. The Administrative Agent shall have
received a copy of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies referred to in
subsection 7.1(r) and listed on Schedule 6.8 and a copy, certified by such
parties as the Administrative Agent may reasonably deem appropriate, of
all other documents affecting the property covered by each Mortgage to be
delivered on the Closing Date.
(q) Insurance. The Administrative Agent shall have received evidence
in form and substance reasonably satisfactory to it that all of the
requirements of subsection 8.6 and Section 4.1 of each of the Security
Agreements shall have been satisfied.
(r) Legal Opinions. The Administrative Agent shall have received,
with a counterpart for each Lender, the executed legal opinion of (i)
Jenner & Block, counsel to the Borrower and the other Loan Parties,
substantially in the form of Exhibit M and (ii) Borrower's special counsel
in California and Virginia in form and substance satisfactory to the
Administrative Agent.
(s) Administrative Agent's Fees. The Administrative Agent and the
other Lenders shall have received, or the Borrower shall have otherwise
provided for, to the satisfaction of the Administrative Agent, all accrued
fees, expenses (including, without limitation, fees and expenses of
counsel to the Administrative Agent and the local counsel) and other
consideration required to be paid or delivered on or prior to the Closing
Date.
(t) Outstanding Indebtedness. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of a
Responsible Officer of the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent, certifying that neither the
Borrower nor any of its Subsidiaries has any outstanding Indebtedness
other than as permitted by subsection 9.2.
7.2 Conditions to Each Loan. The agreement of each Lender to make any Loan
(that increases the amount of principal outstanding) requested to be made by it
on any date (including, without limitation, its initial Loan, but excluding at
all times Loans made pursuant to subsection 4.3), and of the Issuing Bank to
issue any Letter of Credit, is subject to (i) the making of such
55
Loans complying in all respects with the margin regulations of the Board of
Governors and (ii) the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made. by the Borrower or any of its Subsidiaries in or pursuant
to the Loan Documents shall be true and correct in all material respects
on and as of a time immediately prior to and a time immediately after
giving effect to, such Loan as if made on and as of such time (except that
so long as the representation and warranty in Section 6.24 is true and
correct in all material respects as of March 31, 2000, then such
representation shall not be renewed thereafter, and any other such
representation or warranty that is expressly stated as being made only as
of a specified earlier date shall be true and correct in all material
respects as of such earlier date).
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans
requested to be made on such date or to the issuance of the Letter of
Credit to be issued on such date.
(c) Additional Matters. The timely receipt of a notice of borrowing.
Each borrowing by the Borrower hereunder shall constitute a representation
and warranty by the Borrower as of the date of such Loan that the
conditions contained in this subsection 7.2 have been satisfied. Each
Lender agrees to make Loans in the circumstances contemplated by
subsection 4.3 whether or not the conditions contained in this subsection
7.2 have been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding,
any Loan remains outstanding and unpaid or any other amount is owing to any
Lender, the Issuing Bank, the Swingline Bank or the Administrative Agent
hereunder unless the Required Lenders, and the Issuing Bank if any Letter of
Credit shall be outstanding, shall have otherwise consented in writing, the
Borrower shall and (except in the case of delivery of financial information,
reports and notices) shall cause each of its Subsidiaries to:
8.1 Financial Statements. Furnish to the Administrative Agent, with
a copy for each Lender:
(a) as soon as available, but in any event within 110 days after the
end of each fiscal year of the Borrower, a copy of the consolidated and
consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related consolidated and
consolidating statements of income and retained earnings and of cash flows
for such year, setting forth in each case in comparative form the figures
for the previous year, reported on (other than with respect to
consolidating statements) without a "going concern" or like qualification
or exception, or qualification arising out of the scope of the audit, by
Ernst & Young LLP or other independent certified public accountants of
nationally recognized standing acceptable to the Administrative Agent;
56
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated and consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such quarter and the related unaudited consolidated and consolidating
statements of income and retained earnings and of cash flows for such
quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer as fairly presenting
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries (subject to normal year-end audit adjustments
and the absence of certain notes); and
(c) as soon as available, but in any event not later than 30 days
after the end of each month, unless such month is also the end of a fiscal
quarter then 45 days, the unaudited consolidated and consolidating balance
sheet of the Borrower and its consolidated Subsidiaries as at the end of
such month and the related unaudited consolidated and consolidating
statements of income and cash flow for such month and the portion of the
year through the end of such month, setting forth in each case in
comparative form the figures for the previous year, certified by a
Responsible Officer as fairly presenting the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries
(subject to normal year-end audit adjustments and the absence of notes).
All such financial statements shall be prepared in accordance with
generally accepted accounting principles (subject, in the case of interim
financial statements, to normal year-end audit adjustments and the absence of
certain notes) applied consistently throughout the periods reflected therein and
with prior periods (except as approved by such accountants or officer, as the
case may be, and disclosed therein).
8.2 Certificates; Other Information. Furnish to the Administrative
Agent, with a copy for each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 8.1(a), a written statement of the independent
certified public accountants reporting on such financial statements
(unless such accountants are prohibited by law or the Financial Accounting
Standards Board (or any successor) from providing such statement) to the
effect that in the course of the audit upon which their certification of
such financial statements was based (but without any special or additional
audit procedures for the purpose) they obtained knowledge of no condition
or event relating to financial matters which constitutes a Default or an
Event of Default or, if such accountants shall have obtained in the course
of such audit knowledge of any Default or Event of Default, disclosing in
such written statement the nature and period of existence thereof, it
being understood that such accountants shall be under no liability,
directly or indirectly, to the Lenders for failure to obtain knowledge of
any such condition or event;
(b) (b) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a) and 8.1(b), a certificate of a
Responsible Officer substantially in the form of Exhibit N hereto (the
"Compliance Certificate") with respect to observance,
57
performance or satisfaction of covenants contained in this Agreement and
the other Loan Documents and knowledge of any Default or Event of Default;
(c) concurrently with the delivery of the financial statements
referred to in subsections 8.1(a) and 8.1(b), a Compliance Certificate
showing in detail satisfactory to the Administrative Agent (including,
where applicable, differences in the application of generally accepted
accounting principles used in such financial statements and the
application of GAAP) compliance by the Borrower with the covenants
contained in subsection 9.1, 9.6, 9.7 and 9.8 hereof and, to the extent
not otherwise required to be delivered pursuant to subsection 8.1 and 8.2,
statements of the Borrower's and its Subsidiaries' cash flows for the
periods covered by such covenants with respect to which compliance is to
be demonstrated in such Compliance Certificate, and a computation of the
amount of Borrower's and its Subsidiaries' capital expenditures made
during such period and during the portion of the fiscal year through the
end of the period covered by such Compliance Certificate;
(d) not later than 45 days after the end of each fiscal year of the
Borrower, subject to the provisions of subsection 12.16, a copy of the
projections by the Borrower of the operating budget and cash flow budget
of the Borrower and its Subsidiaries for the succeeding fiscal year, such
projections to be accompanied by a certificate of a Responsible Officer to
the effect that such projections have been prepared in good faith and
based upon reasonable assumptions;
(e) within ten days after the same are sent, copies of all financial
statements and other financial information, proxy materials and other
information and reports which the Borrower files with the SEC or any
securities exchange on which the Borrower's common stock is traded or
delivers to its stockholders or to holders of its Indebtedness (or any
trustee, Administrative Agent or other representative therefor);
(f) promptly after the receipt thereof by the Borrower or any of its
Subsidiaries, subject to the provisions of subsection 12.16, a copy of any
"management letter" received by any such Person from its certified public
accountants and the management's responses thereto;
(g) promptly upon, and in any event within ten Business Days after,
an officer of the Borrower or any of its Subsidiaries obtains knowledge
thereof, notice of one or more of the following environmental matters:
(i) any pending or threatened Environmental Claim against the
Borrower or any of its Subsidiaries or any real property owned or
operated by the Borrower or any of its Subsidiaries that is
reasonably likely to involve remediation costs or liability greater
than $500,000;
(ii) any condition or occurrence on or arising from any real
property currently or formerly owned or operated by the Borrower or
any of its Subsidiaries that (a) results in material noncompliance
by the Borrower or any of its Subsidiaries with any applicable
Environmental Law or (b) could reasonably
58
be expected to form the basis of an Environmental Claim against the
Borrower or any of its Subsidiaries or any such real property that
is reasonably likely to involve costs or liability greater than
$500,000;
(iii) any condition or occurrence on any real property
currently or formerly owned or operated by the Borrower or any of
its Subsidiaries that could reasonably be expected to cause such
real property to be subject to any restrictions on the ownership,
occupancy, use or transferability by the Borrower or any of its
Subsidiaries of such real property under any Environmental Laws that
is reasonably likely to involve costs or liability or affect the
value of such real property in an amount greater than $500,000; and
(iv) the taking of any removal or remedial action in response
to the actual or alleged presence of any Material of Environmental
Concern on any real property currently or formerly owned or operated
by the Borrower or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative agency
that is reasonably likely to involve remediation costs or liability
greater than $500,000; provided that in any event the Borrower shall
deliver to each Lender all notices received by it or any of its
Subsidiaries from any government or governmental agency under, or
pursuant to, CERCLA;
all such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and the Borrower's or such Subsidiary's response thereto. In addition, the
Borrower will provide the Lenders with copies of all material
communications with any government or governmental agency relating to
Environmental Laws, all communications with any Person (other than its
attorneys and the holders of the Claims Escrow Note or their respective
successors and assigns) relating to any Environmental Claim of which
notice is required to be given pursuant to this Section 8.2(h), and such
detailed reports (not subject to attorney-client or attorney work product
privileges) of any such Environmental Claim as may reasonably be requested
by the Lenders; and
(h) promptly, such additional financial and other information which
is in the Borrower's possession as any Lender may from time to time
reasonably request through the Administrative Agent.
8.3 Payment of Taxes and Other Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all of its taxes, assessments and other obligations of whatever nature,
except where the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with generally
accepted accounting principles with respect thereto have been provided on the
books of the Borrower or its Subsidiaries, as the case may be.
8.4 Conduct of Business and Maintenance of Existence. Continue to engage
in business of the same general type as now conducted by the Borrower and its
Subsidiaries, provided that the businesses conducted by the Exempted
Subsidiaries may be discontinued at any time) and preserve, renew and keep in
full force and effect its corporate existence and take all
59
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business except as otherwise permitted
pursuant to subsection 9.5; comply in all material respects with all
Requirements of Law and any indenture, agreement or other instrument to which
any Loan Party is a party or by which it or any of its property is bound which
is material to the Borrower or its Subsidiaries.
8.5 Maintenance of Records. (i) Keep proper books of record and account in
which full, true and correct entries will be made of all dealings or
transactions of or in relation to its business and affairs; and (ii) set up on
its books reserves with respect to all taxes, assessments, charges, levies and
claims. All determinations pursuant to this Section 8.5 shall be made in
accordance with, or as required by, GAAP consistently applied in the opinion of
such independent public accountants as shall then be regularly engaged by the
Borrower.
8.6 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in good working order and condition, normal wear and
tear excepted; maintain with financially sound and reputable insurance companies
insurance on all its property in at least such amounts and against at least such
risks (but including in any event public liability and business interruption) as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to each Lender which so requests, upon
reasonable written request, full information as to the insurance carried.
8.7 Inspection of Property, Books and Records; Discussions. Keep proper
books and records of accounts in conformity with generally accepted accounting
principles and applicable regulatory standards; and permit representatives of
any Lender, upon reasonable prior notice, to visit and inspect any of its
properties and examine and make abstracts from any of its books and records at
any reasonable time upon reasonable prior notice and as often as may be
reasonably required (but not to exceed two such visits per Lender in any fiscal
year, provided that such visits by the Administrative Agent shall not be limited
in number) and to discuss the business, operations, properties and financial and
other condition of the Borrower and its Subsidiaries with officers of the
Borrower and its Subsidiaries.
8.8 Notices. Promptly upon knowledge of the following, give written
notice to the Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any indenture,
agreement or other instrument to which any Loan Party is a party or by
which it or any of its property is bound which is material to the Borrower
and its Subsidiaries taken as a whole, or (ii) litigation, investigation
or proceeding which may exist at any time between any Loan Party and any
Governmental Authority, which in either case of clauses (i) or (ii) of
this paragraph (b), if not cured or if adversely determined, as the case
may be, could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Loan Party in which
the amount involved is $1,000,000 or more and not covered by insurance or
in which injunctive or similar relief is sought;
60
(d) the following events, as soon as possible and in any event
within 30 days after the Borrower knows or has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution to a Plan, the
creation of any lien (within the meaning of Section 4068 of ERISA) in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC
or the Borrower or any Commonly Controlled Entity or any Multiemployer
Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan;
(e) any development or event which in the reasonable judgment
of the Borrower has had or could reasonably be expected to have a
Material Adverse Effect; and
(f) any Environmental Claim asserted by any Governmental Authority
or third party or any discovery by Borrower or any Subsidiary of any
occurrence or condition with respect to any Material of Environmental
Concern that is reasonably likely to involve remediation costs or
liability greater than $500,000, unless such claim is insured or
indemnified against, in which case notice is to be given only if the
remediation costs or liability is reasonably likely to exceed $1,000,000.
Each notice pursuant to the foregoing paragraphs of this subsection shall be
accompanied by a statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower proposes to
take with respect thereto.
8.9 Environmental Law.
(a) Comply in all material respects with, and ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws (the "Remedial Work") and promptly comply in all
material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws, except to the
extent that the same are being contested in good faith and with due
diligence by appropriate proceedings and the pendency of such proceedings
could not reasonably be expected to have a Material Adverse Effect and
reserves in conformity with generally accepted accounting principles with
respect thereto have been provided on the books of the Borrower or the
applicable Subsidiary, as the case may be.
(c) If the Borrower or any of its Subsidiaries does not timely
commence and diligently prosecute to completion the Remedial Work, and is
not contesting the need to perform Remedial Work as provided in Section
8.9(b) above, the Administrative Agent may (but shall not be obligated
to), upon 30 days prior written notice to the Borrower of
61
its intention to do so, cause such Remedial Work to be performed. The
Borrower shall pay or reimburse the Administrative Agent on demand for all
expenses (including attorneys' fees and disbursements), reasonably
relating to or incurred by the Administrative Agent in connection with
monitoring, reviewing or performing any Remedial Work.
8.10 Maintenance of Liens of the Security Documents. Promptly, upon the
reasonable request of the Administrative Agent, at the Borrower's expense,
execute, acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record, or cause to be registered,
filed or recorded, in an appropriate governmental office, any document or
instrument supplemental to or confirmatory of the Security Documents or
otherwise reasonably deemed by the Administrative Agent necessary or desirable
for the continued validity, perfection and priority of the Liens on the
Collateral covered thereby.
8.11 Pledge of After Acquired Property.
(a) If at any time following the Closing Date the Borrower or any of
its Subsidiaries (other than any Exempted Subsidiary) shall acquire at any
time property of any nature whatsoever which is intended to be covered by
the terms of the applicable Security Document and is not otherwise subject
to the Lien created by each Security Document, as soon as possible and in
no event later than 30 days after the relevant acquisition date and, to
the extent permitted by applicable law or contract in existence on the
date hereof, grant to the Administrative Agent for the ratable benefit of
the Lenders a Lien on such property as collateral security for the
Obligations (as defined in the Borrower Security Agreement) pursuant to
documentation reasonably satisfactory in form and substance to the
Administrative Agent. The Borrower, at its own expense, shall execute,
acknowledge and deliver, or cause the execution, acknowledgment and
delivery of, and thereafter register, file or record in an appropriate
governmental office, any document or instrument (including legal opinions,
title insurance, consents and corporate documents) and take all such
actions reasonably deemed by the Administrative Agent to be necessary or
desirable to ensure the creation, priority and perfection of such Lien.
The Borrower shall cause each Subsidiary of the Borrower created or
acquired after the date hereof, immediately upon such creation or
acquisition, to execute a Subsidiary Security Agreement and an instrument
in form and substance reasonably satisfactory to the Administrative Agent
pursuant to which such Subsidiary shall become a party to the
Subsidiaries' Guarantee as a guarantor thereunder, and the Borrower shall
execute and deliver a Supplement to the Borrower Pledge Agreement in form
and substance reasonably satisfactory to the Administrative Agent, or
shall cause the Subsidiary of the Borrower which holds the Capital Stock
of such Subsidiary to execute and deliver a Subsidiary Pledge Agreement or
a Supplement to the Subsidiary Pledge Agreement to which it is a party,
providing for the pledge of 100% of the issued and outstanding Capital
Stock of such Subsidiary owned by Borrower or its Subsidiary to the
Administrative Agent for the benefit of the Lenders (65% in the case of a
Foreign Subsidiary), and the Borrower shall deliver to the Administrative
Agent the stock certificates evidencing such Capital Stock together with
undated stock powers for each such certificate, duly executed in blank
(or, in the case of a Foreign Subsidiary, take such other action as has
the same substantive effect under applicable law).
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(b) Without limiting the foregoing, Borrower and the Subsidiary
Guarantors agree to use their commercially reasonable efforts:
(i) to the extent that some or all Leasehold Encumbrances are
not generally permitted pursuant to agreements creating each
leasehold interest in the San Francisco Property, to obtain, any
amendments, waivers, consents or approvals necessary to permit the
Administrative Agent, for the ratable benefit of the Lenders, to
obtain the most favorable Leasehold Encumbrances available under the
circumstances (as determined upon consultation with the
Administrative Agent) for such property.
(ii) to the extent that some or all Leasehold Encumbrances are
not generally permitted pursuant to agreements creating each
leasehold interest in the San Xxxxx Property, to obtain, any
amendments, waivers, consents or approvals necessary to permit the
Administrative Agent, for the ratable benefit of the Lenders, to
obtain the most favorable Leasehold Encumbrances available under the
circumstances (as determined upon consultation with the
Administrative Agent) for such property.
(iii) to obtain any amendments, waivers, consents or approvals
necessary to permit the Administrative Agent, for the ratable
benefit of the Lenders, to obtain the most favorable Leasehold
Encumbrances available under the circumstances (as determined upon
consultation with the Administrative Agent) for the Ingleside
Property.
(iv) to enter into, execute and deliver to the Administrative
Agent, for the ratable benefit of the Lenders, the Leasehold
Encumbrances and to cooperate and assist in the preparation,
execution and filing of all financing statements, deeds of trust,
mortgages and any other documents necessary or helpful for the
perfection and maintenance of Administrative Agent's security
interest under the Leasehold Encumbrances.
Any other provisions of this Agreement to the contrary notwithstanding, failure
to obtain leases or Leasehold Encumbrances pursuant to subsection 8.11(b) shall
not constitute a Default or Event of Default hereunder.
8.12 Pledge During Event of Default. At any time after the occurrence and
during the continuance of an Event of Default, upon the request of the
Administrative Agent, promptly deliver such security agreements, mortgages,
pledges, guarantees and other security documents as the Administrative Agent may
reasonably request to grant to the Administrative Agent for the ratable benefit
of the Lenders, to the extent permitted by applicable law, a fully perfected
first Lien on all right, title and interest of any Loan Party in any
unencumbered property of any Loan Party of any nature whatsoever, as collateral
security for the Obligations, pursuant to documentation reasonably satisfactory
to the Administrative Agent and take all such actions (including obtaining
releases of existing Liens) and deliver all such other documents (including
legal opinions, title insurance, consents and corporate documents) as the
Administrative Agent shall reasonably require to ensure the priority and
perfection of such Lien.
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8.13 Collateral Account. In the event that the Borrower or any of its
Subsidiaries (a) receives any insurance proceeds (other than the proceeds of
business interruption or similar insurance or any proceeds required to pay any
third party claim or any fees and expenses incurred in connection with a
Casualty Loss or related claims) on account of Casualty Losses in excess of
$2,000,000 in the aggregate in any fiscal year and there is no Event of Default
(provided that such first $2,000,000 shall be used solely to repair or replace
the asset subject to such Casualty Loss within six months after the date
received or be deposited in the Collateral Account), (b) receives any insurance
proceeds (other than the proceeds of business interruption or similar insurance
or any proceeds required to pay any third party claim or any fees and expenses
incurred in connection with a Casualty Loss or related claims) on account of
Casualty Losses in excess of $1,000 and there is an Event of Default (provided
that the Administrative Agent shall have the right to such amounts as provided
in the Security Agreements) or (c) is required to deposit cash in a cash
collateral account on account of the Letters of Credit as contemplated herein,
all such proceeds and payments shall promptly be deposited in a bank account or
accounts (the "Collateral Account") maintained by, and under the control of, the
Administrative Agent all as provided in the Security Agreement. The amounts
deposited into the Collateral Account pursuant to clause (a) shall be released
to the Borrower upon receipt by the Administrative Agent of a certificate from
the Borrower certifying that such amounts shall be used immediately upon receipt
to repair or replace property subject to a Casualty Loss or used to pay any
third party claims or any fees or expenses incurred in connection with a
Casualty Loss or related claims against an insurer. Any Qualifying Insurance and
Other Proceeds in the Collateral Account shall be applied in accordance with
Section 5.1(c).
8.14 Interest Rate Protection. Within 90 days following the Closing Date,
enter into and thereafter maintain at all times an Interest Rate Agreement or
Agreements providing to the Borrower interest rate protection reasonably
satisfactory to the Administrative Agent with respect to not less than 50% of
the aggregate outstanding principal amount of the Term Loans, and having an
expiry date from the Closing Date acceptable to the Administrative Agent, and
the Borrower agrees and confirms that the Borrower Security Agreement grants to
the Administrative Agent, for the benefit of the Lenders, a first priority
perfected security interest in its rights under any such Interest Rate
Agreements.
SECTION 9. NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date, so long
as the Commitments remain in effect, any Letter of Credit remains outstanding,
any Loan remains outstanding and unpaid or any other amount is owing to any
Lender, the Issuing Bank, the Swingline Bank or the Administrative Agent
hereunder, unless the Required Lenders, and the Issuing Bank if any Letter of
Credit is outstanding, shall have otherwise consented in writing the Borrower
shall not, and (except with respect to subsection 9.1) shall not permit any of
the Borrower's Subsidiaries to, directly or indirectly:
9.1 Financial Condition Covenants.
(a) EBITDA Maintenance. Permit EBITDA of the Borrower and its
consolidated Subsidiaries for any period of four consecutive fiscal
quarters ending on a date specified below to be less than the amount set
forth opposite such period below:
64
Period Ending Amount (in thousands)
------------- ---------------------
March 31, 2000 $30,000
June 30, 2000 30,000
September 30, 2000 30,000
December 31, 2000 30,000
March 31, 2001 31,000
June 30, 2001 32,000
September 30, 2001 32,500
December 31, 2001 33,000
March 31, 2002 34,000
June 30, 2002 35,000
September 30, 2002 36,000
December 31, 2002 37,000
March 31, 2003 37,500
June 30, 2003 38,500
September 20, 2003 39,500
December 31, 2003 40,000
March 31, 2004 40,000
June 30, 2004 40,000
September 30, 2004 40,000
December 31, 2004 40,000
March 31, 2005 40,000
June 30, 2005 40,000
September 30, 2005 40,000
December 31, 2005 40,000
March 31, 2006 40,000
June 30, 2006 40,000
September 30, 2006 40,000
(b) Net Debt Ratio. Permit the ratio of Net Debt of the Borrower and
its consolidated Subsidiaries outstanding as of the last day of each
fiscal quarter during any period set forth below to EBITDA of the Borrower
and its consolidated Subsidiaries for the period of four consecutive
fiscal quarters of the Borrower and its consolidated Subsidiaries ended on
such date to exceed the ratio set forth opposite such period below:
Period Ending Ratio
------------- -----
March 31, 2000 5.00x
June 30, 2000 5.00x
September 30, 2000 5.00x
December 31, 2000 4.75x
March 31, 2001 4.50x
June 30, 2001 4.50x
September 30, 2001 4.25x
December 31, 2001 4.25x
65
Period Ending Ratio
------------- -----
March 31, 2002 4.00x
June 30, 2002 4.00x
September 30, 2002 3.75x
December 31, 2002 3.75x
March 31, 2003 3.50x
June 30, 2003 3.50x
September 30, 2003 3.25x
December 31, 2003 3.00x
March 31, 2004 3.00x
June 30, 2004 2.75x
September 30, 2004 2.75x
December 31, 2004 2.75x
March 31, 2005 2.50x
June 30, 2005 2.50x
September 30, 2005 2.25x
December 31, 2005 2.25x
March 31, 2006 2.00x
June 30, 2006 2.00x
September 30, 2006 2.00x
(c) Interest Expense Ratio. Permit the ratio of EBITDA of the
Borrower and its consolidated Subsidiaries for any period of four
consecutive fiscal quarters ending on a date specified below of the
Borrower and its consolidated Subsidiaries to Cash Interest Expense of the
Borrower and its consolidated Subsidiaries for such period to be less than
the ratio set forth opposite the applicable period below:
Period Ending Ratio
------------- -----
March 31, 2000 1.75x
June 30, 2000 1.75x
September 30, 2000 1.75x
December 31, 2000 1.75x
March 31, 2001 2.00x
June 30, 2001 2.00x
September 30, 2001 2.00x
December 31, 2001 2.00x
March 31, 2002 2.25x
June 30, 2002 2.25x
September 30, 2002 2.25x
December 31, 2002 2.25x
March 31, 2003 2.50x
June 30, 2003 2.50x
September 30, 2003 2.50x
December 31, 2003 2.50x
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Period Ending Ratio
------------- -----
March 31, 2004 3.00x
June 30, 2004 3.00x
September 30, 2004 3.00x
December 31, 2004 3.00x
March 31, 2005 3.50x
June 30, 2005 3.50x
September 30, 2005 3.50x
December 31, 2005 3.50x
March 31, 2006 3.50x
June 30, 2006 3.50x
September 30, 2006 3.50x
For purposes of this subsection 9.1(c), Cash Interest Expense for any four
fiscal quarter period during which the Borrower or any of its Subsidiaries
completes a Permitted Acquisition shall be calculated by giving pro forma
effect to such Permitted Acquisition as of the first day of such four
fiscal quarter period.
(d) Fixed Charge Ratio. Permit the ratio of EBITDA of the Borrower
and its consolidated Subsidiaries for any period of four consecutive
fiscal quarters ending on the date specified below less the Capital
Expenditures of the Borrower and its consolidated Subsidiaries for such
period to Debt Service of the Borrower and its consolidated Subsidiaries
for such period to be less than the ratio set forth opposite the
applicable period below:
Period Ending Ratio
------------- -----
March 31, 2000 1.00x
June 30, 2000 1.00x
September 30, 2000 1.00x
December 31, 2000 1.00x
March 31, 2001 1.00x
June 30, 2001 1.00x
September 30, 2001 1.00x
December 31, 2001 1.25x
March 31, 2002 1.25x
June 30, 2002 1.25x
September 30, 2002 1.25x
December 31, 2002 1.25x
March 31, 2003 1.25x
June 30, 2003 1.25x
September 30, 2003 1.25x
December 31, 2003 1.25x
March 31, 2004 1.25x
June 30, 2004 1.25x
September 30, 2004 1.25x
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Period Ending Ratio
------------- -----
December 31, 2004 1.25x
March 31, 2005 1.00x
June 30, 2005 0.75x
September 30, 2005 0.75x
December 31, 2005 0.50x
March 31, 2006 0.50x
June 30, 2006 0.50x
September 30, 2006 0.50x
For purposes of this subsection 9.1(d), Debt Service for any four fiscal
quarter period during which the Borrower and any of its Subsidiaries
completes a Permitted Acquisition shall be calculated by giving pro forma
effect to such Permitted Acquisition as of the first day of such four
fiscal quarter period.
9.2 Limitation on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness (i) of the Borrower to any Subsidiary and (ii) of
any wholly-owned Subsidiary of the Borrower to the Borrower or any other
Subsidiary, provided that any such Indebtedness referred to in clause (i)
of this subsection 9.2(b) or of any such wholly-owned Subsidiary to any
other Subsidiary shall be expressly subordinated to the Loans and the
Guarantees on terms and conditions reasonably satisfactory to the
Administrative Agent.
(c) Indebtedness of the Borrower and any of its wholly-owned
Subsidiaries incurred to finance the acquisition of fixed or capital
assets (whether pursuant to a loan, Financing Lease or otherwise, but
excluding pursuant to operating leases) in an aggregate principal amount
not exceeding as to the Borrower and its subsidiaries $2,500,000 at any
time outstanding;
(d) Indebtedness under Interest Rate Agreements;
(e) Indebtedness of a Person which becomes a wholly-owned
Subsidiary or which is assumed in connection with the purchase of assets
from any Person by the Borrower or any wholly-owned Subsidiary after the
date hereof, provided that (i) such Indebtedness existed at the time such
Person became a wholly-owned Subsidiary or such assets were purchased as
the case may be, and was not created in anticipation thereof, except that
Indebtedness created to provide a portion of the consideration payable to
such Person (commonly called "seller paper") which contains terms of
subordination to the Loans and other obligations and liabilities of the
Borrower to the Lenders and other terms and conditions satisfactory to the
Administrative Agent and the Required Lenders shall be permitted and (ii)
immediately after giving effect to the acquisition of such Person by the
Borrower no Default or Event of Default shall have occurred and be
continuing;
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(f) Indebtedness under the Claims Escrow Note;
(g) Indebtedness as listed on Schedule 6.23;
(h) Intentionally omitted.
(i) Unsecured Indebtedness in an aggregate amount of up to
$2,500,000 outstanding at any time;
(j) Indebtedness payable to employees or former employees of Loan
Parties in connection with the purchase of Capital Stock of the Borrower
from such employees or former employees of any of the Loan Parties in an
aggregate amount not to exceed $6,000,000;
(k) Indebtedness represented by surety and performance bonds
given in the ordinary course of business;
(l) Indebtedness up to the amount of, and secured only by, the
cash surrender value of the COLIs; and
(m) Letters of credit secured by one or more Letters of Credit
issued hereunder in an aggregate amount not to exceed $1,000,000.
(n) Indebtedness incurred from the extension or refinancing of
Indebtedness provided for in clauses (a) through (m) of this subsection;
provided that no Indebtedness incurred pursuant to this clause shall have
(A) a maturity date prior to the maturity date of the Indebtedness being
refinanced, (B) an interest rate which exceeds the then-prevailing market
rates for debt having characteristics similar to the Indebtedness being
refinanced or (C) a principal amount which exceeds the Indebtedness being
refinanced;
9.3 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for the following (collectively, the "Permitted Liens"):
(a) Lien for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with generally accepted
accounting principles;
(b) Carriers', warehousemen's, mechanics', materialmen's,
repairmen's, lessors', landlords' or other like Liens arising in the
ordinary course of business which are not overdue for a period of more
than 60 days or which are being contested in good faith by appropriate
proceedings;
(c) pledge or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
69
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds, liens on progress payments and other
obligations of a like nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or such Subsidiary;
(f) Liens securing Indebtedness of the Borrower and its wholly-owned
Subsidiaries permitted by subsection 9.2(c) incurred to finance the
acquisition of fixed or capital assets, provided that (i) such Liens shall
be created substantially simultaneously with the acquisition of such fixed
or capital assets, (ii) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness, (iii) the
amount of Indebtedness secured thereby is not increased and (iv) the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed 100% the original purchase price of such property;
(g) Liens granted to Lenders and securing Indebtedness
permitted by subsection 9.2(d);
(h) Liens on the property or assets of a corporation which becomes a
wholly-owned Subsidiary or on assets purchased from any Person after the
date hereof securing Indebtedness permitted by subsection 9.2(e), provided
that (i) such Liens existed at the time such corporation became a
wholly-owned Subsidiary and were not created in anticipation thereof, (ii)
any such Lien is not granted to cover any property or assets of such
corporation after the time such corporation becomes a wholly-owned
Subsidiary, and (iii) the amount of Indebtedness secured thereby is not
increased;
(i) Liens securing Indebtedness permitted by subsection 9.2(n) to
the extent that such Liens are levied on assets that were permitted to be
subject to Liens securing the prior Indebtedness extended or refinanced
pursuant to subsection 9.2(n);
(j) Liens created pursuant to the Security Documents;
(k) any Lien arising by operation of law pursuant to Section 107(1)
of CERCLA or pursuant to analogous state law, for costs or damages (i)
which are not yet due (by virtue of a written demand for payment by a
Governmental Authority) or (ii) which are being contested in good faith by
appropriate proceedings or (iii) which are on property that the Borrower
or one of its Subsidiaries has determined to abandon if the sole recourse
for such costs or damages is such property, provided, in any case, that
the liability of the Borrower (or the Subsidiary of the Borrower that
directly owns or operates the affected property) with respect to the
matter giving rise to such Lien shall not, in the reasonable estimate of
the Administrative Agent (in light of all attendant circumstances,
70
including the likelihood of contribution by third parties), exceed
$1,000,000 for all such Liens;
(l) Liens listed on Schedule 6.8;
(m) Liens on cash surrender value of the COLIs in favor of the
lenders of the Indebtedness described in subsection 9.2(1) hereof; and
(n) Liens securing Indebtedness permitted by subsections 9.2(g)
and 9.2(m).
9.4 Limitation on Guarantee Obligations. Create, incur, assume or
suffer to exist any Guarantee Obligation except:
(a) the Guarantees, including any Guarantee Obligations arising
under any rights of contribution thereunder; and
(b) guarantees made in the ordinary course of its business by the
Borrower of Indebtedness or liabilities of any wholly-owned Subsidiary.
9.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, except:
(a) any wholly-owned Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall
be the continuing or surviving corporation) or with or into any one or
more wholly-owned Subsidiaries of the Borrower;
(b) any wholly-owned Subsidiary may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation
or otherwise) to the Borrower or any other wholly-owned Subsidiary of the
Borrower that is a Guarantor;
(c) until the Tranche B Maturity Date, the Borrower may purchase or
acquire (by merger or otherwise) without the consent of the Administrative
Agent or Lenders assets or properties which do not exceed an aggregate
purchase price of $30,000,000, if each of the following conditions are
satisfied: (i) such acquisitions are of assets or properties which are in
the same line of business or logical extensions thereof in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement,
(ii) such acquisitions are of assets or properties, which, on a Pro Forma
Basis after giving effect to such acquisition, would not have caused the
Borrower to be in violation of any of the covenants or agreements in this
Agreement as of the date of such acquisition provided that in the case of
covenants or agreements which must be met as of a specified period or date
either (A) as of the latest relevant period or date prior to the date of
such acquisition, if at least one such period or date shall have passed on
the date of such acquisition, or (B) as of the first relevant period or
date after the date of such acquisition, if no such period of date shall
have passed on the date of such acquisition, (iii) such acquisitions are
of assets or properties which cause the EBITDA of the Borrower on a Pro
Forma Basis
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after giving effect to such acquisition for the twelve (12) month period
prior to such acquisition to exceed EBITDA of the Borrower for the twelve
(12) month period prior to such acquisition without giving effect to such
acquisition, and (iv) up to $10,000,000 of net proceeds of any investment
by any of the Equity Investors may be used to finance a portion of the
aggregate purchase price, but no more than $20,000,000 of such aggregate
purchase price may be funded by any Revolving Credit Loan (for purposes of
clauses (ii) and (iii) of this subsection (c), "Pro Forma Basis" shall be
defined as giving effect to the relevant acquisition, adjusted for any
synergies, economies of scale and other similar benefits which may accrue
to the Borrower or its Subsidiaries as a result of such acquisition, all
as determined by the Administrative Agent); and
(d) the sale of each of the Exempted Subsidiaries or all or
substantially all of their respective assets.
9.6 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), whether now owned or hereafter
acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary's Capital Stock to any Person other than the Borrower or any
wholly-owned Subsidiary that is a Guarantor, except:
(a) the sale of inventory, scrap and excess materials in the
ordinary course of business;
(b) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof;
(c) as permitted by subsection 9.5(b);
(d) sales of equipment and other property, including leasehold
interests, in the ordinary course of business in an amount not exceeding
$1,000,000 of aggregate fair market value in any fiscal year, commencing
January 1, 2000;
(e) the sale, transfer or other disposition of any asset in the
ordinary course of business which is obsolete for its intended use;
(f) the sale of any equipment for consideration not less than the
fair market value thereof at such time if not less than 80% of the
purchase price is paid in cash and such cash proceeds are applied to the
Revolving Credit Loans, or, in accordance with Section 5.1(c), to the Term
Loans;
(g) the Indebtedness described in subsection 9.2(1) hereof;
(h) the sale of each of the Exempted Subsidiaries or all or
substantially all of their respective assets; and
(i) the sale of the passenger vessel known as the Sequoia.
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9.7 Restricted Payments. Except for the Special Distribution and Bonus,
declare or pay any dividend (other than dividends payable solely in common stock
of the Borrower and other than dividends payable by any Subsidiary to the
Borrower, directly or indirectly) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of the Borrower or any warrants or options to purchase
any such Capital Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Borrower or any Subsidiary, except
purchases of Capital Stock of the Borrower from employees or former employees of
any of the Loan Parties in an amount not to exceed $6,000,000 in the aggregate.
9.8 Limitation on Capital Expenditures. Make or commit to make (by way of
the acquisition of securities of a Person or otherwise) any Capital Expenditures
(other than Capital Expenditures of the Borrower or any of its Subsidiaries
attributable to the consummation of a Permitted Acquisition in excess of, in the
aggregate for the Borrower and its consolidated Subsidiaries, an amount equal to
$12,000,000 for the fiscal year ending December 31, 2000, and $6,000,000 for
each subsequent fiscal year, provided that up to 100% of any such amount, if not
so expended in the fiscal year for which it is permitted above, may be carried
over for expenditure in the next fiscal year.
9.9 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities of or any assets constituting a business
unit of, or make any other investment in, any Person (collectively,
"Investments"), except:
(a) extensions of trade credit and. accounts receivable and
advances to employees for business expenses generated in the ordinary
course of business;
(b) Investments in Cash Equivalents;
(c) Investments by the Borrower in its wholly-owned Subsidiaries
other than any Exempted Subsidiary, and Investments by such Subsidiaries
in the Borrower and in other wholly-owned Subsidiaries other than any
Exempted Subsidiary; provided, however, that the Borrower or any of its
Subsidiaries may make Investments in Capital Air Services, Inc. not to
exceed an aggregate of $2,000,000 per year (such amount to be reduced by
any cash payments received pursuant to allocations made in accordance with
Section 9.11(ii)) to the extent required to fund its ordinary course
operations;
(d) acquisitions of promissory notes and shares of Capital
Stock in consideration for Asset Sales;
(e) loans to employees for up to $2,000,000, for the purpose of
acquiring stock of the Borrower;
(f) securities acquired in lieu of payment from a customer or
supplier and securities acquired in a transaction permitted by
subsection 9.6(f);
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(g) Permitted Acquisitions; and
(h) Capital Expenditures permitted under Section 9.8.
9.10 Limitation on Optional Payments and Modifications of Debt Instruments
and Capital Stock. (a) Make any optional payment or prepayment or any purchase
or redemption of any Indebtedness for borrowed money (other than the Loans) or
(b) amend, modify or change, or consent or agree to any amendment, modification
or change to any of the terms of any such Indebtedness for borrowed money (other
than any such amendment, modification or change which would extend the maturity
or reduce the amount of any payment of principal thereof or which would reduce
the rate or extend the date for payment of interest thereon) or (c) amend the
Certificate of Incorporation or by-laws or equivalent documents of the Borrower
or any of its Subsidiaries if said amendment affects any of Lender's rights
under this Agreement.
9.11 Limitation on Transactions with Affiliates. Except as set forth in
Schedule 9.11, enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of the Borrower's or such Subsidiary's
business and (c) upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's-length transaction with a Person which is not an Affiliate,
provided that the foregoing restriction shall not apply to (i) the
indemnification of directors of the Borrower and its Subsidiaries in accordance
with customary practice and (ii) reasonable allocations of general and
administrative expense in the ordinary course of business, including without
limitation, up to $2,000,000 per year for the expenses of operating an aircraft
leased by Capital Air Services, Inc.
9.12 Limitation on Negative Pledge Clauses. Enter into with any Person any
agreement after the Closing Date, other than (a) this Agreement, (b) operating
leases with respect to any leased asset, (c) purchase money mortgages or
Financing Leases permitted by this Agreement (in which cases, any prohibition or
limitation shall only be effective against the assets financed thereby), which
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired or of any of the
Subsidiaries to declare or pay dividends or to make loans or other advances to
the Borrower, directly or indirectly.
9.13 Limitation on Lines of Business. Enter into any business either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries and the Exempted Subsidiaries are engaged on the
date of, or which are logical extensions thereof.
9.14 Limitation on Issuance of Capital Stock by Subsidiaries. Permit any
direct or indirect Subsidiary (other than an Exempted Subsidiary) of the
Borrower to issue or grant any Capital Stock of such Subsidiary to any Person,
other than the Borrower or a wholly-owned Subsidiary of the Borrower.
9.15 Limitation on Transfers to Exempted Subsidiaries. Make any
contribution or loan of any money or property to, or enter into any sale, lease
or similar transaction with, or otherwise transfer or cause to be transferred
any asset of Borrower or its Subsidiaries (other than an
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Exempted Subsidiary) to any Exempted Subsidiary, or permit any Subsidiary (other
than an Exempted Subsidiary) to do any of the foregoing.
SECTION 10. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing ("Event of
Default"):
(a) The Borrower shall fail to pay any principal of any Loan when
due in accordance with the terms thereof or hereof; or the Borrower shall
fail (i) to reimburse any drawing on any Letter of Credit when due in
accordance with the terms hereof or (ii) to provide any or all of the cash
collateral required to be deposited with the Issuing Bank pursuant to a
Letter of Credit Request strictly in accordance with the terms thereof; or
the Borrower shall fail to pay any interest on any Loan, or any fee or
other amount payable hereunder, within five Business Days after any such
interest, fees or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by the
Borrower or any other Loan Party herein or in any other Loan Document or
which is contained in any certificate, document or financial or other
statement furnished by it pursuant to the Loan Documents shall prove to
have been false or misleading in any material respect on or as of the date
made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 9, Section
5 of each of the Stock Pledge Agreements or Sections 4.1 and 4.5 of each
of the Security Agreements; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower; or
(e) Any Loan Party shall (i) default in any payment of principal of
or interest on any Indebtedness (other than the Loans) or in the payment
of any Guarantee Obligation, beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness or Guarantee
Obligation was created, if the aggregate amount of the Indebtedness and/or
Guarantee Obligations in respect of which such default or defaults shall
have occurred is at least $6,000,000; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event (including, without
limitation, any mandatory prepayment event) shall occur or condition
exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a
trustee or Administrative Agent on behalf of such holder or holders) to
cause, with the giving of notice if required, such Indebtedness to become
due (whether by acceleration, mandatory prepayment or otherwise) prior to
its stated maturity, in each case, if the
75
aggregate amount of such Indebtedness in respect of which such default or
defaults shall have occurred is at least $6,000,000; or
(f) (i) Any Loan Party shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief
of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts,
or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Loan Party shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against any Loan Party
any case, proceeding or other action of a nature referred to in clause (i)
above which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (iii) there shall be commenced
against any Loan Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) any Loan Party shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence
in any of the acts set forth in clause (i), (ii), or (iii) above; or (v)
any Loan Party shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 or 407 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (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, or (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 Insolvency or Reorganization of, a Multiemployer Plan and in
each case in clauses (i) through (v) above, such event or condition,
together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against any
Loan Party involving in the aggregate a liability (to the extent not paid
or covered by insurance or indemnification by the Claims Escrow or a
financial responsible party which has acknowledged its liability therefor)
of $6,000,000 or more, and all such judgments or
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decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 60 days from the entry thereof; or
(i) (i) Except in connection with an Asset Sale permitted under
subsection 9.6, any of the Security Documents shall cease, for any reason,
to be in full force and effect, or the Borrower or any other Loan Party
which is a party to any of the Security Documents shall so assert or (ii)
the Lien created by any of the Security Documents shall cease to be
enforceable and of the same effect and priority purported to be created
thereby (except as expressly provided by such Security Document or in
connection with the priority of Liens (obtained by persons other than the
Administrative Agent) on the COLIs as security for the Indebtedness
described in Section 9.2(l)); or
(j) Any Subsidiary Guarantee shall cease, for any reason (except as
expressly provided in such Subsidiary Guarantee), to be in full force and
effect or any Subsidiary Guarantor shall so assert; or
(k) A Change of Control shall have occurred;
then, and in any such event and at any time thereafter during the continuation
of such an Event of Default, (A) if such event is an Event of Default specified
in paragraph (f) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement shall
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by written
notice to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Lenders, the Administrative Agent may, or upon the request of
the Required Lenders, the Administrative Agent shall, by written notice to the
Borrower, declare the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement to be due and payable forthwith,
whereupon the same shall immediately become due and payable. Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived.
In addition, upon demand by the Issuing Bank, the Administrative Agent or
the Required Revolving Credit Lenders after the occurrence of any Event of
Default, the Borrower shall deposit with the Administrative Agent for the
benefit of the Revolving Credit Lenders with respect to each Letter of Credit
then outstanding, promptly upon such demand, cash or Cash Equivalents in an
amount equal to the greatest amount for which such Letter of Credit may be
drawn. Such deposit shall be held by the Administrative Agent for the benefit of
the Issuing Bank and the Revolving Credit Lenders as security for, and to
provide for the payment of, the Letter of Credit Outstanding.
SECTION 11. THE ADMINISTRATIVE AGENT
11.1 Appointment. Each Lender hereby irrevocably designates and appoints
Credit Lyonnais New York Branch as the Administrative Agent of such Lender under
this Agreement
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and the other Loan Documents, and each such Lender irrevocably authorizes Credit
Lyonnais New York Branch, as the Administrative Agent for such Lender, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to the Administrative Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
11.2 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through
administrative agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any
administrative agents or attorneys-in-fact selected by it with reasonable care.
11.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
its officers, directors, employees, administrative agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Borrower.
11.4 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any Note,
writing, resolution, notice, consent, certificate, affidavit, letter, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent shall treat the payee of any Note as the owner thereof for
all purposes unless the assignment or transfer shall have been recorded in the
Register. The Administrative Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate or it shall first be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this
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Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
11.5 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
11.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representations or warranties to it and that no act by the Administrative
Agent hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender confirms to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also confirms that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement and the other Loan Documents
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates.
11.7 Indemnification. The Lenders agree to indemnify the Administrative
Agent in its capacity as such (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
their respective Commitment Percentages in effect on the date on which
indemnification is sought under this subsection (or, if indemnification is
sought after the date upon which the Commitments shall have terminated and the
Loans shall have been paid in full, ratably in accordance with their Commitment
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind
79
whatsoever which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement, any of the other Loan Documents or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or willful misconduct
(as determined in a final, non-appealable judgment by a court of competent
jurisdiction). The agreements in this subsection shall survive the payment of
the Notes and all other amounts payable hereunder.
11.8 Administrative Agent in Its Individual Capacity. The Administrative
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower as though the Administrative
Agent were not the Administrative Agent hereunder and under the other Loan
Documents. With respect to its Loans made or renewed by it, the Administrative
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not the
Administrative Agent and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
11.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 30 days' written notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall, with the consent
of the Borrower (which consent shall not be unreasonably withheld), appoint from
among the Lenders a successor Administrative Agent for the Lenders, whereupon
such successor Administrative Agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor Administrative Agent effective upon such appointment and
approval, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this subsection
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.
SECTION 12. MISCELLANEOUS
12.1 Amendments and Waivers. Neither this Agreement, any Note or any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, with the consent of the Administrative Agent or, with the
written consent of the Required Lenders, the Administrative Agent may, from time
to time, (a) enter into with the Borrower written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Borrower hereunder or thereunder or
(b) waive, on such terms and conditions as the Required Lenders or the
Administrative Agent, as the case may
80
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Loan or of any installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date of
any payment thereof or increase the aggregate amount or extend the expiration
date of any Lender's Commitments, in each case without the consent of each
Lender affected thereby, (ii) amend, modify or waive any provision of subsection
2.2, 2.3, 2.4, 3.3, 3.5 or 12.1 or reduce the percentage specified in the
definition of Required Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents or release all or substantially all of the Collateral in each
case without the written consent of all the Lenders, the Issuing Bank and the
Swingline Bank, (iii) amend, modify or waive any provision of Section 2 or the
order of application of prepayments in subsection 5.1 without the written
consent of the Required Tranche A Lenders or reduce the percentage in the
definition of Required Tranche A Lenders without the consent of all the Tranche
A Lenders, (iv) amend, modify or waive any provision of Section 2 or the order
of application of prepayments in subsection 5.1 without the written consent of
the Required Tranche B Lenders or reduce the percentage in the definition of
Required Tranche B Lenders without the consent of all the Tranche B Lenders, (v)
amend, modify or waive any provision of Section 3 or the order of application of
prepayments in subsection 5.1 without the prior written consent of the Required
Revolving Credit Lenders or reduce the percentage in the definition of Required
Revolving Credit Lenders without the consent of all the Revolving Credit
Lenders, (vi) amend, modify or waive any provision of subsection 3.4 without the
prior written consent of the Swingline Bank, (vii) amend, modify or waive any
provision of Section 4 without the prior written consent of both the Issuing
Bank and the Required Revolving Credit Lenders or (viii) amend, modify or waive
any provision of Section 11 without the written consent of the then
Administrative Agent (provided that the rights of any prior Administrative Agent
or Administrative Agents shall not be adversely affected thereby) and provided
further that the Administrative Agent may waive compliance with, or extend time
deadlines under, the provisions of subsection 8.11(b). Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and the Issuing Bank, and shall be binding upon the Borrower, the
Lenders, the Issuing Bank and the Administrative Agent. In the case of any
waiver, the Borrower, the Lenders, the Issuing Bank and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Notes and any other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. For purposes of subsection 12.1, in the
event that any Lender refuses to accept the amendment or waiver entered into
between the Administrative Agent and the Borrower, the Borrower shall have the
right, upon notice to such Lender (with a copy to the Administrative Agent), to
either (i) require such Lender to assign to one or more assignees specified by
the Borrower, and acceptable to the Administrative Agent, who are willing to so
purchase from such Lender all (but not less than all) of such Lender's rights
and obligations under this Agreement provided that such assignee or assignees
shall pay to such Lender, in consideration for such assignment, an amount equal
to all principal, interest, fees and other amounts owing to such Lender as of
the date of such assignment or (ii) upon the approval of the Required Lenders,
prepay the principal amount of the Loans held by such Lender plus all
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interest, fees, and other amounts owing to such Lender as of the date of such
prepayment, with the Commitments of all of the Lenders reduced pro rata by the
amount of the Commitment of such Lender.
12.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy); and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or five Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in Schedule I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto and any future holders of the Notes:
The Borrower: United States Marine Repair, Inc.
The Carlyle Group
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
Jenner & Block
Xxx XXX Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent: Credit Lyonnais New York Branch
1301 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attention: Leveraged Finance (Xxxx Xxxxxxx)
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 3.2, 3.4, 3.6, 4.1, 5.1, 5.2 or 5.7 shall
not be effective until received.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
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12.4 Survival of Representations and Warranties. All representations and
warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
12.5 Payment of Expenses and Taxes. The Borrower agrees, irrespective of
whether or not any of the transactions contemplated hereby are consummated, (a)
to pay or reimburse the Administrative Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation and
execution of, and any amendment, supplement, modification or waiver to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, including, without limitation, the reasonable
fees and disbursements of Xxxxxxxx & Xxxxxxxx, special counsel to the
Administrative Agent, as well as local and foreign counsel to the Administrative
Agent; (b) to pay or reimburse the Administrative Agent for all costs and
expenses incurred in connection with the administration of the documentation of
Loans; (c) to pay or reimburse each Lender, the Issuing Bank and the
Administrative Agent for all its costs and expenses incurred in connection with
the enforcement or preservation of any rights under this Agreement, the other
Loan Documents and any such other documents, including, without limitation, the
fees and disbursements of counsel to the Administrative Agent and to each
Lender; (d) to pay, indemnify, and hold each Lender, the Issuing Bank and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
documentary stamp, excise and other taxes, if any, which may be payable or
determined to be payable by reason of the execution and delivery of this
Agreement and the other Loan Documents and any such other documents, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect thereof; and (e) to indemnify, and hold each Lender, the Issuing Bank,
the Swingline Bank and the Administrative Agent and their respective affiliates,
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") harmless from and against any and all liabilities, obligations, losses
(other than lost profits resulting from lower reinvestment yields upon payment
of any of the Loans prior to their respective stated maturities except as
otherwise provided in Section 5.11 hereof), damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including legal fees and other charges) with respect to the
execution, delivery, performance (including the actual and proposed use of
proceeds hereunder) and consummation of this Agreement, the other Loan Documents
and any such other documents, including, without limitation, any of the
foregoing relating to, or arising out of (i) the preparation for a defense of,
or participation in, any investigation, litigation, proceeding or other action
related to or arising out of the Loan Documents or any other such documents, the
Recapitalization (whether or not such Indemnified Party is a party to such
proceeding or other action and whether any such investigation, litigation or
proceeding or other action is brought by the Borrower, its stockholders or
creditors or by any other Person), or (ii) the violation of, noncompliance with
or liability under, any Environmental Law applicable to the Borrower, any of its
Subsidiaries or any of the Mortgaged Properties (all the foregoing in this
clause (e), collectively, the "indemnified liabilities"), provided that the
Borrower shall have no obligation hereunder to an Indemnified Party with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of such Indemnified Party (as determined in a final non-appealable
judgment by a court of competent jurisdiction). The agreement in this subsection
shall survive repayment of the Loans and all other amounts payable hereunder.
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12.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrower, the Lenders, the Issuing Bank, the Administrative Agent and
their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender and the Issuing Bank.
(b) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any Loan owing
to such Lender, any Commitment of such Lender or any other interest of
such Lender hereunder and under the other Loan Documents. In the event of
any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to
this Agreement shall remain unchanged, such Lender shall remain solely
responsible to the other parties for the performance thereof, including
the right to approve any modification, amendment or waiver of any
provision of this Agreement, such Lender shall remain the holder of any
such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents
provided that, such Participant may be granted the right to approve any
modification, amendment or waiver of this Agreement described in clauses
(i) through (vi) of Section 12.1. The Borrower also agrees that each
Participant shall be entitled to the benefits of subsections 5.9, 5.10 and
5.11 with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided that the
Borrower shall have the rights under Section 5.13 with respect to such
Participants.
(c) Any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time and from time to time assign
to any Lender or any affiliate thereof or, with the consent of the
Administrative Agent, the Issuing Bank, the Swingline Lender and the
Borrower (which consents shall not be unreasonably withheld), to another
Person (an "Assignee") all or any part of its rights and obligations under
this Agreement and the other Loan Documents pursuant to an Assignment and
Acceptance, substantially in the form of Exhibit O, executed by such
Assignee, such assigning Lender (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Administrative Agent)
and delivered to the Administrative Agent for, its acceptance and
recording in the Register, provided that, in the case of any such
assignment to an additional Assignee, the sum of the aggregate principal
amount of the Loans and the aggregate amount of the unused Commitments
being assigned and, if such assignment is of less than all of the rights
and obligations of the assigning Lender, the sum of the aggregate
principal amount of the Loans and the aggregate amount of the unused
Commitments remaining with the assigning Lender must each be not less than
$5,000,000, provided further, that any consent of the Borrower otherwise
required under this paragraph shall not be required if an Event of Default
under Section 10(f)(i)-(iii) has occurred and is continuing. Upon such
execution, delivery, acceptance and recording, from and after the
effective date determined pursuant to such Assignment and
84
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein,
and (y) the assigning Lender thereunder shall, to the extent provided in
such Assignment and Acceptance, be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and
obligations under this Agreement, such assigning Lender shall cease to be
a party hereto). Notwithstanding any provision of paragraph (e) of this
subsection, unless requested by the Assignee and/or the assigning Lender,
Notes shall not be required to be executed and delivered by the Borrower,
for any assignment which occurs at any time when any of the events
described in Section 10(f)(i)-(iii) shall have occurred and be continuing.
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in
subsection 12.2 a copy of each Assignment and Acceptance delivered to it
and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amounts of
the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person
whose name is recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes of this
Agreement and the other Loan Documents, notwithstanding any notice to the
contrary. Any assignment of any Loan or other obligation hereunder shall
be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Administrative Agent)
together with payment by the Assignee or the assigning Lender to the
Administrative Agent of a registration and processing fee of $3,500, the
Administrative Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto
record the information contained therein in the Register and give notice
of such acceptance and recordation to the Lenders and the Borrower.
(f) Subject to the provisions of subsection 12.16, the Borrower
authorizes each Lender to disclose to any Participant or Assignee (each, a
"Transferee") and any prospective Transferee any and all financial
information in such Lender's possession concerning the Borrower, its
wholly-owned Subsidiaries and its Affiliates which has been delivered to
such Lender by or on behalf of the Borrower pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower, its
wholly-owned Subsidiaries and its Affiliates prior to becoming a party to
this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignment
of Loans and Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating
85
security interests, including, without limitation, any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law, provided that no such assignment shall
release a Lender from any of its obligations hereunder.
12.7 Adjustments; Set-off.
(a) If any Lender (a "Benefitted Lender") shall at any time receive
any payment of all or part of its Loans, or interest thereon, or receive
any Collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 10(f) or otherwise), in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of such
other Lender's Loans, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such Benefitted Lender to share the excess
payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefitted Lender,
such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest unless the
Benefitted Lender is required to pay interest thereon, in which case each
Lender returning funds to the Benefitted Lender shall pay its pro rata
share of such interest.
(b) In addition to any rights and remedies of the Lenders provided
by law, each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon any amount becoming due and
payable by the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against
such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held
or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off
and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and application.
12.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement in any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
12.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any
86
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
12.10 Integration. This Agreement and the other Loan Documents together
with the Fee Letter represent the agreement of the Borrower and the
Subsidiaries, the Administrative Agent, the Issuing Bank and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties of any party hereto relative to subject matter
hereof not expressly set forth or referred to herein or in the other Loan
Documents or in such Fee Letter. Any previous agreement with respect to the
subject matter hereof is superseded by this Agreement and the other Loan
Documents.
12.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
12.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts
of the State of New York, the courts of the United States of America for
the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to it at its
address set forth in subsection 12.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred
to in this subsection any special, exemplary, punitive or consequential
damages.
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12.13 Acknowledgments. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor the Issuing Bank nor the
Swingline Bank nor any Lender has any fiduciary relationship with or duty
to it arising out of or in connection with this Agreement or any of the
other Loan Documents, and the relationship between Administrative Agent,
Issuing Bank, Swingline Bank and Lenders, on the one hand, and it, on the
other hand, in connection herewith or therewith is solely that of debtor
and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders (including the Issuing Bank and the Swingline
Bank) or among it and the Lenders (including the Issuing Bank and the
Swingline Bank).
12.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT, THE
ISSUING BANK, THE SWINGLINE BANK AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
12.15 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 lawful rate (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 Note held by such Lender, together with all Charges payable to
such Lender, shall be limited to the Maximum Rate.
12.16 Confidentiality. The Lenders shall hold in confidence all non-public
information obtained pursuant to the requirements of this Agreement which has
been identified as such in writing by the Borrower, provided that any Lender may
make disclosure (i) reasonably required by any Transferee or prospective
Transferee pursuant to subsection 12.6 (subject to the execution by such
Transferee or prospective Transferee of a confidentiality letter of the same
scope as this subsection 12.16) or (ii) as required or requested by any
governmental agency or representative thereof or required by law, rule or
regulation or (iii) pursuant to legal process or (iv) to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions of
this Section 12.16); provided, further, that in no event shall any Lender be
obligated or required to return any materials furnished by the Borrower.
[Balance of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
UNITED STATES MARINE REPAIR INC.
By: /s/ B. Xxxxxx Xxxxx
-----------------------------------------
Name: B. Xxxxxx Xxxxx
Title: Chief Executive Officer
NORFOLK SHIPBUILDING AND DRYDOCK CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxxxx X. Xxxxxxx
Title: President
SOUTHWEST MARINE, INC.
By: /s/ B. Xxxxxx Xxxxx
-----------------------------------------
Name: B. Xxxxxx Xxxxx
Title: Chief Executive Officer
SAN FRANCISCO DRYDOCK, INC.
By: /s/ B. Xxxxxx Xxxxx
-----------------------------------------
Name: B. Xxxxxx Xxxxx
Title: Chief Executive Officer
CREDIT LYONNAIS NEW YORK BRANCH,
as Administrative Agent, Issuing Bank and
Swingline Bank
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
CITICORP USA, INC.
By: /s/ Xxxxx X. Wirdnam
-----------------------------------------
Name: Xxxxx X. Wirdnam
Title: Attorney in fact
XXXXXX COMMERCIAL PAPER INC.,
as Documentation Agent
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
THE BANK OF NOVA SCOTIA
By: /s/ Xxxx Xxxxx
-----------------------------------------
Name: Xxxx Xxxxx
Title: Managing Director
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxx X. Xxxxx
-----------------------------------------
Name: Xxx X. Xxxxx
Title: Vice President
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCH
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Assistant Vice President
By: /s/ Xxx Xxx
-----------------------------------------
Name: Xxx Xxx
Title: Assistant Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
KZH STERLING LLC
By: /s/ Xxxxx Xxxx
-----------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Agent
GALAXY CLO 1999-1, LTD.SAI INVESTMENT
ADVISER, INC. its Collateral Manager
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Agent
KZH SOLEIL-2 LLC
By: /s/ Xxxxx Xxxx
-----------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Agent
