Exhibit 10.24
EXECUTION
$345,000,000
AUTOTOTE CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of October 6,
2000, and entered into by and among AUTOTOTE CORPORATION, a Delaware corporation
("COMPANY"), THE LENDERS PARTIES HERETO (each individually referred to herein as
a "LENDER" and collectively as "LENDERS"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as
administrative agent for Lenders (in such capacity, "ADMINISTRATIVE AGENT"),
DLJ, as syndication agent for Lenders (in such capacity, "SYNDICATION AGENT"),
Lead Arranger and Sole Book Running Manager, XXXXXX COMMERCIAL PAPER INC.,
("LCPI"), as documentation agent for Lenders (in such capacity, "DOCUMENTATION
AGENT"), and XXXXXX BROTHERS INC. ("Xxxxxx") as Co-Arranger. Capitalized terms
used herein without definition shall have the meanings set forth therefor in
subsection 1.1.
PRELIMINARY STATEMENTS
o Company, Lenders, Administrative Agent, Syndication Agent, and
Documentation Agent are parties to that certain Credit Agreement
dated as of September 6, 2000 (the "CLOSING DATE CREDIT
AGREEMENT").
o Company, Lenders, Administrative Agent, Syndication Agent and
Documentation Agent desire to amend and restate the Closing Date
Credit Agreement in its entirety in order to, among other things,
(i) complete the syndication of the Lenders and (ii) provide that
the terms and provisions of the Closing Date Credit Agreement
shall otherwise be modified as set forth herein.
o Company agrees that its existing pledge and grant of a security
interest in substantially all of its present and future real and
personal property pursuant to the Security Agreement dated as of
September 6, 2000 by and among Company, certain of Company's
Subsidiaries and Administrative Agent shall be continued without
interruption and shall be amended and restated in its entirety.
o Each Subsidiary Guarantor agrees that its existing guaranty of
the Obligations of Company under the Closing Date Credit
Agreement pursuant to the Subsidiary Guaranty dated as of
September 6, 2000 entered into by the Subsidiary Guarantors in
favor of the Administrative Agent for the benefit of
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Lenders shall be continued without interruption and shall be
amended and restated in its entirety.
o All modifications to the Closing Date Credit Agreement and the
other Loan Documents made hereby require the concurrence of all
Lenders and the Loan Parties. The Lenders identified on the
signature pages hereof have acquired all of the loans and
commitments under the Closing Date Credit Agreement as indicated
in Schedule 2.1.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders, Administrative
Agent, Syndication Agent and Documentation Agent agree that the Closing Date
Credit Agreement shall be amended and restated, without novation, as follows:
SECTION 1. DEFINITIONS
o DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACQUIRED BUSINESS" has the meaning assigned to that term in the
definition of "Permitted Acquisition" in this subsection 1.1.
"ACQUISITION CO." means ATX Enterprises, Inc., a Delaware
corporation and wholly-owned Subsidiary of Company.
"ACQUISITION FINANCING REQUIREMENTS" means the aggregate of all
amounts necessary (i) to finance the purchase price for all of the outstanding
shares of Scientific Games Common Stock (and the retirement of all outstanding
stock options (including related withholding tax with respect to the exercise of
such options)) pursuant to the Merger in an aggregate amount of approximately
$307.7 million; (ii) to repay in full the Existing Company Bank Debt in an
aggregate principal amount of approximately $36.0 million; (iii) to repay
Existing Company Senior Notes in an aggregate principal amount of $110 million;
(iv) to repay the Existing Company Convertible Debt in an aggregate principal
amount of $35 million; (v) to pay the Tender Premiums in an amount not to exceed
$9.5 million; (vi) to repay in full the Existing Scientific Games Bank Debt in
an aggregate principal amount of approximately $25.0 million; (vii) to pay
accrued interest on existing Indebtedness in the approximate amount of $1.8
million; (viii) to cash collateralize the Existing Letters of Credit in an
aggregate amount not to exceed $1.4 million; and (ix) to pay Transaction Costs
in an amount not to exceed $30.1 million.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that
term in subsection 6.9B.
"ADDITIONAL MORTGAGE POLICY" has the meaning assigned to that term
in subsection 6.9B(iv).
"ADDITIONAL MORTGAGES" has the meaning assigned to that term in
subsection 6.9B(i).
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"ADJUSTED CONSOLIDATED NET INCOME" means, for any period, the net
income (or loss) of Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP; PROVIDED that there shall be excluded therefrom (i) the income (or loss)
of any Person (other than a Subsidiary of Company) in which any other Person
(other than Company or any of its Subsidiaries) has a joint interest, except to
the extent of the amount of dividends or other distributions actually paid to
Company or any of its Subsidiaries by such Person during such period, (ii)
except as otherwise expressly permitted under this Agreement, the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary or is
merged into or consolidated with Company or any of its Subsidiaries or that
Person's assets are acquired by Company or any of its Subsidiaries and (iii) the
income of any Subsidiary of Company to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary; provided that the foregoing clause
(iii) shall not apply with respect to the income of any Foreign Subsidiary to
the extent that the restriction on the declaration or payment of dividends or
similar distributions by that Foreign Subsidiary of that income is permitted by
subsection 7.2C(c) or 7.2D(d).
"ADJUSTED LIBO RATE" means, for any Interest Rate Determination Date
with respect to an Interest Period for a LIBO Rate Loan, the rate per annum
obtained by DIVIDING (i) the rate per annum (rounded upward to the nearest 1/16
of one percent) which appears on the British Bankers Association Telerate page
3750 (or such other comparable page as may, in the reasonable opinion of the
Administrative Agent with the consent of Company (which consent shall not be
unreasonably withheld or delayed), replace such page for the purpose of
displaying such rate), at which Dollar deposits with a maturity comparable to
such Interest Period as of approximately 11:00 a.m. (London time) on such
Interest Rate Determination Date BY (ii) a percentage equal to 100% MINUS the
stated maximum rate of all reserve requirements (including any marginal,
emergency, supplemental, special or other reserves) applicable on such Interest
Rate Determination Date to any member bank of the Federal Reserve System in
respect of "Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"AFFECTED CLASS" has the meaning assigned to that term in subsection
10.6.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
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"AGENTS" means, collectively, the Syndication Agent, the
Documentation Agent and the Administrative Agent and any Supplemental Collateral
Agents (as defined in subsection 9.1B).
"AGREEMENT" means this Amended and Restated Credit Agreement dated
as of October 6, 2000 and all the exhibits and schedules hereto, as it may be
amended, supplemented or otherwise modified from time to time.
"AGREEMENT OF JOINDER" means an Agreement of Joinder in
substantially the form of Exhibit XIV annexed hereto.
"ANNUALIZED" means (i) with respect to the Fiscal Quarter of Company
ending September 30, 2000, (x) the applicable amount for the period from and
including the Closing Date through and including September 30, 2000 MULTIPLIED
by (y) (i) 360 DIVIDED by (ii) the number of days from and including the Closing
Date through and including September 30, 2000, (ii) with respect to the Fiscal
Quarter of Company ending December 31, 2000, (x) the applicable amount for the
period from and including the Closing Date through and including December 31,
2000 MULTIPLIED by (y) (i) 360 DIVIDED by (ii) the number of days from and
including the Closing Date through and including December 31, 2000, and (iii)
with respect to the Fiscal Quarter of Company ending March 31, 2001, (x) the
applicable amount for the period from and including the Closing Date through and
including March 31, 2001 multiplied by (y) (i) 360 DIVIDED by (ii) the number of
days from and including the Closing Date through and including March 31, 2001.
"APPLICABLE BASE RATE MARGIN" means, as at any date of
determination, (i) with respect to Tranche B Term Loans, 3.00% per annum, and
(ii) with respect to Tranche A Term Loans and Revolving Loans, a percentage per
annum as set forth below opposite the applicable Consolidated Leverage Ratio
calculated on a Pro Forma Basis:
CONSOLIDATED LEVERAGE RATIO APPLICABLE BASE RATE MARGIN
------------------------------------------------------------------
greater than or equal to 2.50%
5.00:1.00
less than 5.00:1.00 but greater
than or equal to 4.50:1.00 2.25%
less than 4.50:1.00 but greater
than or equal to 4.00:1.00 2.00%
less than 4.00:1.00 but greater
than or equal to 3.50:1.00 1.75%
less than 3.50:1.00 but greater
than or equal to 3.00:1.00 1.50%
less than 3.00:1.00 1.25%
; PROVIDED that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1 (xviii) after the
six-month anniversary of the Closing Date, the Applicable Base Rate Margin for
Tranche A Term Loans and Revolving Loans shall be 2.25% per annum.
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"APPLICABLE LIBO RATE MARGIN" means, as at any date of
determination, (i) with respect to Tranche B Term Loans, 4.25% per annum, and
(ii) with respect to Tranche A Term Loans and Revolving Loans, a percentage per
annum as set forth below opposite the applicable Consolidated Leverage Ratio
calculated on a Pro Forma Basis:
CONSOLIDATED LEVERAGE RATIO APPLICABLE LIBO RATE MARGIN
------------------------------------------------------------------
greater than or equal to 5.00:1.00 3.75%
less than 5.00:1.00 but greater
than or equal to 4.50:1.00 3.50%
less than 4.50:1.00 but greater
than or equal to 4.00:1.00 3.25%
less than 4.00:1.00 but greater
than or equal to 3.50:1.00 3.00%
less than 3.50:1.00 but greater
than or equal to 3.00:1.00 2.75%
less than 3.00:1.00 2.50%
; PROVIDED that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1 (xviii) after the
six-month anniversary of the Closing Date, the Applicable LIBO Rate Margin for
Tranche A Term Loans and Revolving Loans shall be 3.50% per annum.
"APPROVED FUND" means any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of
an entity that administers or manages a Lender.
"ARRANGER" means DLJ Capital Funding, Inc. as Lead Arranger and Sole
Book Running Manager.
"ASSET SALE" means the sale, lease, assignment or other transfer
(whether voluntary or involuntary) for value (collectively, a "TRANSFER") by
Company or any of its Subsidiaries to any Person other than Company or any of
its wholly-owned Subsidiaries of (i) any of the equity ownership of any of
Company's Subsidiaries, (ii) substantially all of the assets of any division or
line of business of Company or any of its Subsidiaries, or (iii) any other
assets (whether tangible or intangible) of Company or any of its Subsidiaries
(other than (a) inventory sold in the ordinary course of business, (b) other
equipment transferred for not in excess of $2 million for any single transaction
or related series of transactions and $4 million in the aggregate for each
Fiscal Year, and (c) any such other assets to the extent that (x) the aggregate
value of such assets transferred in any single transaction or related series of
transactions is equal to $2 million or less and (y) the aggregate value of such
assets transferred in any Fiscal Year is equal to $4 million or less).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of EXHIBIT IX annexed hereto.
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"AUTHORIZED REPRESENTATIVE" means any of the President, the Chief
Financial Officer and the Treasurer (or any other senior executive officer
designated in writing by the Company to the Administrative Agent and reasonably
acceptable to the Administrative Agent).
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% plus the Federal Funds Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted LIBO Rate
or any LIBO Rate Loans, any day that is a Business Day described in clause (i)
above and that is also a day for trading by and between banks in Dollar deposits
in the London interbank market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a demand, time,
savings, passbook or like account with a bank, savings and loan association,
credit union or like organization, other than an account evidenced by a
negotiable certificate of deposit.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of not
less than $100 million; and (v) shares of any money market mutual fund that (a)
invests solely in the types of investments referred to in clauses (i) through
(iv) above or in substantially similar investments and (b) has a rating of no
less than "AAA" from Moody's and an equivalent rating from S&P.
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"CASH JUNIOR PAYMENT" has the meaning assigned to that term in the
definition of "Consolidated Fixed Charges" in this subsection 1.1.
"CERTIFICATE OF DESIGNATION" means the Certificate of Designations,
Preferences and Relative, Participating, Optional and Other Special Rights of
Preferred Stock and Qualifications, Limitations and Restrictions Thereof of
Series A Convertible Preferred Stock of Autotote Corporation dated as of
September 6, 2000.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially
in the form of EXHIBIT X annexed hereto delivered by a Lender to Administrative
Agent pursuant to subsection 2.7B(iii).
"CHANGE IN CONTROL" means:
(i) a change shall occur in the Board of Directors of Company so
that a majority of the Board of Directors of Company ceases to consist of
the individuals who constituted the Board of Directors of Company on the
Closing Date (or individuals whose election or nomination for election was
approved by a vote of at least a majority of the directors then in office
who either were directors on the Closing Date or whose election or
nomination for election was previously so approved); or
(ii) any Person or group (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission) (other than Olivetti or an affiliate
of Olivetti or a group in which Olivetti or an affiliate of Olivetti is
the largest beneficial owner of shares of the voting capital stock of
Company) shall become or be the owner, directly or indirectly,
beneficially or of record, of shares representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of Company on a fully diluted basis; or
(iii) a "Change of Control" occurs as that term is defined in the
Senior Subordinated Note Indenture or any other indenture or agreement
pursuant to which Subordinated Indebtedness has been issued.
"CLASS" means, as applied to Lenders, each of the following classes of
Lenders: (i) Lenders having Tranche A Term Loan Exposure; (ii) Lenders having
Tranche B Term Loan Exposure; (iii) Lenders having Revolving Loan Exposure; and
(iv) Lenders having exposure in additional commitments made in accordance with
clause (vi) of subsection 10.6A.
"CLOSING DATE" means September 6, 2000.
"CLOSING DATE CREDIT AGREEMENT" has the meaning assigned to that
term in paragraph A of the Preliminary Statements of this Agreement.
"CLOSING DATE MORTGAGED PROPERTY" has the meaning assigned to that
term in subsection 4.1G.
"CLOSING DATE MORTGAGE POLICIES" has the meaning assigned to that
term in subsection 4.1G(v).
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"CLOSING DATE MORTGAGES" has the meaning assigned to that term in
subsection 4.1G.
"COLLATERAL" means, collectively, all of the real, personal and
mixed property (including capital stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord agreement and
waiver, mortgagee agreement and waiver, bailee letter or any similar
acknowledgement or agreement of any landlord or mortgagee in respect of any Real
Property Asset where any Collateral is located or any warehouseman or other
bailee in possession of any Collateral of any Loan Party, substantially in the
form of EXHIBIT XV annexed hereto with such changes thereto as may be agreed to
by Administrative Agent in the reasonable exercise of its discretion.
"COLLATERAL DOCUMENTS" means the Security Agreement or any Mortgage
executed by Company or any of Company's Subsidiaries and granting a Lien on any
real, personal or mixed property of such Person to secure the Obligations and
all other instruments or documents delivered by any Loan Party pursuant to this
Agreement or any of the other Loan Documents in order to grant to Administrative
Agent, on behalf of Lenders, a Lien on any real, personal or mixed property of
that Loan Party as security for the Obligations.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or similar
instrument issued for the purpose of providing the primary payment mechanism in
connection with the purchase of any materials, goods or services of Company or
any of its Subsidiaries in the ordinary course of business of Company or such
Subsidiary.
"COMMITMENT FEE PERCENTAGE" means, as at any date of determination,
a percentage per annum as set forth below opposite the applicable Consolidated
Leverage Ratio calculated on a Pro Forma Basis.
CONSOLIDATED LEVERAGE RATIO COMMITMENT FEE PERCENTAGE
------------------------------------------------------------------
greater than or equal to 0.50%
3.50:1.00
less than 3.50:1.00 0.375%
; PROVIDED that until the delivery of the first Margin Determination Certificate
by Company to Administrative Agent pursuant to subsection 6.1(xviii) after the
six-month anniversary of the Closing Date, the Commitment Fee Percentage shall
be 0.50% per annum.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMPANY" has the meaning assigned to that term in the introduction
to this Agreement.
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"COMPANY EMPLOYEE BENEFIT PLAN" means any Employee Benefit Plan
which is maintained or contributed to by Company or any of its Subsidiaries.
"COMPANY PENSION PLAN" means any Pension Plan which is a Company
Employee Benefit Plan.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT V annexed hereto delivered to Administrative Agent and Lenders
by Company pursuant to subsection 6.1(iv).
"COMPUTATION DATE" has the meaning assigned to that term in
subsection 2.1F(i).
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold
Interest as to which the lessor (and all other parties having a consent right)
has agreed in writing for the benefit of Administrative Agent (which writing has
been delivered to Administrative Agent), whether under the terms of the
applicable lease, under the terms of a Landlord Consent and Estoppel, or
otherwise, to the matters described in the definition of "Landlord Consent and
Estoppel," which interest, if a subleasehold or sub-subleasehold interest, is
not subject to any contrary restrictions contained in a superior lease or
sublease.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum
of the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on a consolidated balance sheet of Company and its
Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Company and its Subsidiaries; PROVIDED that Consolidated Capital
Expenditures shall not include expenditures made in acquisitions constituting
Permitted Acquisitions; PROVIDED, FURTHER that all calculations of Consolidated
Capital Expenditures for any period that ends prior to the Closing Date or that
includes the Closing Date shall be made on a Pro Forma Basis assuming the Merger
was consummated on the first day of the Fiscal Quarter ending September 30, 2000
and the Merger was a Permitted Acquisition; PROVIDED, STILL FURTHER, that for
purposes of calculating Consolidated Capital Expenditures (on a Pro Forma Basis)
for the period ending (x) December 31, 2000, Consolidated Capital Expenditures
for the Fiscal Quarter deemed to have ended March 31, 2000 shall be deemed to be
$21.8 million and Consolidated Capital Expenditures for the Fiscal Quarter
deemed to have ended June 30, 2000 shall be deemed to be $19.9 million and (y)
March 31, 2001, Consolidated Capital Expenditures for the Fiscal Quarter deemed
to have ended June 30, 2000 shall be deemed to be $19.9 million; PROVIDED, STILL
FURTHER, that Consolidated Capital Expenditures shall not include Consolidated
Capital Software Expenditures.
"CONSOLIDATED CAPITAL SOFTWARE EXPENDITURES" means, for any period,
the sum of the aggregate of all expenditures by Company and its Subsidiaries
during that period to purchase or develop computer software or systems (but only
to the extent such expenditures are capitalized on a consolidated balance sheet
of Company and its Subsidiaries in conformity with GAAP); PROVIDED that
Consolidated Capital Software Expenditures shall not include expenditures made
in acquisitions constituting Permitted Acquisitions; PROVIDED, FURTHER that all
calculations of Consolidated Capital Software Expenditures for any period that
ends prior to the Closing Date or that includes the Closing Date shall be made
on a Pro Forma Basis assuming the
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Merger was consummated on the first day of the Fiscal Quarter ending September
30, 2000 and the Merger was a Permitted Acquisition; PROVIDED, STILL FURTHER,
that for purposes of calculating Consolidated Capital Software Expenditures (on
a Pro Forma Basis) for the period ending (x) December 31, 2000, Consolidated
Capital Software Expenditures for the Fiscal Quarter deemed to have ended March
31, 2000 shall be deemed to be $1.2 million and Consolidated Capital Software
Expenditures for the Fiscal Quarter deemed to have ended June 30, 2000 shall be
deemed to be $1.5 million and (y) March 31, 2001, Consolidated Capital Software
Expenditures for the Fiscal Quarter deemed to have ended June 30, 2000 shall be
deemed to be $1.5 million.
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period,
Consolidated Interest Expense for such period EXCLUDING, HOWEVER, any interest
expense not payable in Cash (including amortization of discount and amortization
of debt issuance costs).
"CONSOLIDATED CASH TAXES" means, for any period, federal, state,
local and foreign income taxes of Company and its Subsidiaries paid in Cash
during such period.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, but excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, but excluding the Revolving Loans and the current portion
of long term Indebtedness of Company (including the Term Loans).
"CONSOLIDATED EBITDA" means, for any period, the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) Consolidated Interest
Expense, (iii) provisions for taxes based on income, (iv) total depreciation
expense, (v) total amortization expense (including without limitation any
amortization of amounts referred to in subsection 2.3 payable to Arranger,
Agents and Lenders on or before the Closing Date), (vi) other non-cash items
reducing Consolidated Net Income LESS other non-cash items increasing
Consolidated Net Income, and (vii) in each case, to the extent (x) actually paid
in Cash by Company on or before the Closing Date and (y) resulting in a
reduction of Consolidated Net Income for the Fiscal Quarter ending September 30,
2000, (A) any fees paid by Company in connection with the placement of the
Convertible Preferred Stock and (B) the Tender Premiums, all of the foregoing as
determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP; PROVIDED that all calculations of Consolidated EBITDA for
any period that ends prior to the Closing Date or that includes the Closing Date
shall be made on a Pro Forma Basis assuming the Merger was consummated on the
first day of the Fiscal Quarter ending September 30, 2000 and the Merger was a
Permitted Acquisition; PROVIDED, FURTHER that for purposes of calculating
Consolidated EBITDA (on a Pro Forma Basis) and for purposes of each of the
Consolidated Fixed Charge Coverage Ratio, the Consolidated Leverage Ratio and
the Consolidated Interest Coverage Ratio, for the period ending (x) September
30, 2000, Consolidated EBITDA for the Fiscal Quarter deemed to have ended
December 31, 1999 shall be deemed to be $24.1 million, Consolidated EBITDA for
the Fiscal Quarter deemed to have ended March 31, 2000 shall be deemed to be
$24.2 million and
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Consolidated EBITDA for the Fiscal Quarter deemed to have ended June 30, 2000
shall be deemed to be $24.8 million, (y) December 31, 2000, Consolidated EBITDA
for the Fiscal Quarter deemed to have ended March 31, 2000 shall be deemed to be
$24.2 million and Consolidated EBITDA for the Fiscal Quarter deemed to have
ended June 30, 2000 shall be deemed to be $24.8 million, and (z) March 31, 2001,
Consolidated EBITDA for the Fiscal Quarter deemed to have ended June 30, 2000
shall be deemed to be $24.8 million.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital
Adjustment MINUS (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (net of any proceeds of any related financings
with respect to such expenditures), (c) Consolidated Capital Software
Expenditures, (d) amounts expended on Permitted Acquisitions, (e) Consolidated
Cash Interest Expense, (f) Consolidated Cash Taxes and (g) dividends paid in
cash.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, as of any date of
determination, the ratio computed for the four Fiscal Quarter period most
recently ended on or before such date of determination of (x) Consolidated
EBITDA to (y) Consolidated Fixed Charges.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Cash Interest
Expense, (ii) Consolidated Cash Taxes, (iii) the aggregate amount of scheduled
payments of principal on Indebtedness of Company and its Subsidiaries (including
that portion attributable to Capital Leases in accordance with GAAP) ("SCHEDULED
PRINCIPAL PAYMENTS") for such period, and (iv) the amount of Restricted Junior
Payments paid in cash during such period permitted under subsection 7.5 ("CASH
JUNIOR PAYMENTS"), all of the foregoing as determined on a consolidated basis
for Company and its Subsidiaries in conformity with GAAP; PROVIDED that all
calculations of Consolidated Fixed Charges for any period that ends prior to the
Closing Date or that includes the Closing Date shall be made on a Pro Forma
Basis assuming the Merger was consummated on the first day of the Fiscal Quarter
ending September 30, 2000 and the Merger was a Permitted Acquisition; PROVIDED,
FURTHER, that for purposes of calculating Consolidated Fixed Charges (on a Pro
Forma Basis) for the period ending (x) September 30, 2000, Consolidated Cash
Taxes for the Fiscal Quarter deemed to have ended December 31, 1999 shall be
deemed to be $1.5 million, Consolidated Cash Taxes for the Fiscal Quarter deemed
to have ended March 31, 2000 shall be deemed to be $1.5 million and Consolidated
Cash Taxes for the Fiscal Quarter deemed to have ended June 30, 2000 shall be
deemed to be $1.5 million, and Scheduled Principal Payments for the Fiscal
Quarter deemed to have ended December 31, 1999 shall be deemed to be $0.3
million, Scheduled Principal Payments for the Fiscal Quarter deemed to have
ended March 31, 2000 shall be deemed to be $0.3 million and Scheduled Principal
Payments for the Fiscal Quarter deemed to have ended June 30, 2000 shall be
deemed to be $0.3 million, (y) December 31, 2000 , Consolidated Cash Taxes for
the Fiscal Quarter deemed to have ended March 31, 2000 shall be deemed to be
$1.5 million and Consolidated Cash Taxes for the Fiscal Quarter deemed to have
ended June 30, 2000 shall be deemed to be $1.5 million and Scheduled Principal
Payments for the Fiscal Quarter deemed to have ended March 31, 2000 shall be
deemed to be $0.3 million and Scheduled Principal Payments for the Fiscal
Quarter deemed to have ended June 30, 2000 shall be deemed to be $0.3 million,
and (z) March 31, 2001, Consolidated Cash Taxes for the Fiscal
11
Quarter deemed to have ended June 30, 2000 shall be deemed to be $1.5 million
and Scheduled Principal Payments for the Fiscal Quarter deemed to have ended
June 30, 2000 shall be deemed to be $0.3 million; PROVIDED, STILL FURTHER, that
notwithstanding anything to the contrary contained in the first proviso to this
sentence, for purposes of the calculation of Consolidated Fixed Charges for the
period ending on September 30, 2000, December 31, 2000 and March 31, 2001,
Consolidated Cash Interest Expense and Cash Junior Payments for the Fiscal
Quarter ending September 30, 2000, December 31, 2000 and March 31, 2001 shall
NOT be determined on a Pro Forma Basis but shall be determined on an Annualized
basis.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio computed for the four Fiscal Quarter period most
recently ended on or before such date of determination of Consolidated EBITDA to
Consolidated Cash Interest Expense; PROVIDED that Consolidated Cash Interest
Expense for the Fiscal Quarters ending September 30, 2000, December 31, 2000 and
March 31, 2001, shall be determined on an Annualized basis.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum of
total interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Company and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Company
and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, the
amortization of any amounts referred to in subsection 2.3 payable to Arranger,
Agents and Lenders on or before the Closing Date.
"CONSOLIDATED LEVERAGE RATIO" means, as at any date of
determination, the ratio of (a) Consolidated Total Debt as of the last day of
the Fiscal Quarter for which such determination is being made to (b)
Consolidated EBITDA for the consecutive four Fiscal Quarters ending on the last
day of the Fiscal Quarter for which such determination is being made.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; PROVIDED
that there shall be excluded therefrom (i) the income (or loss) of any Person
(other than a Subsidiary of Company) in which any other Person (other than
Company or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Company or
any of its Subsidiaries by such Person during such period, (ii) except as
otherwise expressly permitted under this Agreement, the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary; provided that the foregoing clause (iii) shall
not apply with respect to the income of any Foreign Subsidiary to the extent
that the restriction on the declaration or payment of dividends or similar
distributions by that Foreign Subsidiary of that income is permitted by
subsection 7.2C(c) or 7.2D(d), (iv) any after-tax gains
12
or losses attributable to Asset Sales or returned surplus assets of any Pension
Plan, and (v) (to the extent not included in clauses (i) through (iv) above) any
net extraordinary gains.
"CONSOLIDATED NET WORTH" means, as of any date of determination, the
sum of the capital stock (including, without limitation, Convertible Preferred
Stock) and additional paid-in capital plus retained earnings (or minus
accumulated deficits) of Company and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate stated balance sheet amount of all Indebtedness of Company and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess (or deficit) of Consolidated Current Assets over
Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONSULTING AGREEMENT" means that certain Consulting Agreement dated
as of May 18, 2000 by and between Company and Xxxxxxx X. Xxxxxx, as such
agreement may be amended from time to time to the extent permitted under
subsection 7.14.
"CONTINGENT OBLIGATION", as applied to any Person, means, without
duplication, any direct or indirect liability, contingent or otherwise, of that
Person (i) with respect to any Indebtedness, lease, dividend or other obligation
of another if the primary purpose or intent thereof by the Person incurring the
Contingent Obligation is to provide assurance to the obligee of such obligation
of another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
13
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
material provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"CONVERTIBLE PREFERRED STOCK" means Company's Series A Convertible
Preferred Stock.
"CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT" means that certain
Preferred Stock Purchase Agreement dated as of August 31, 2000 by and among
Company, Olivetti and Tote Holdings, L.P., as Purchasers, providing for the
aggregate purchase and sale of shares of Convertible Preferred Stock in an
amount not to exceed $110 million, as such purchase agreement may be amended
from time to time to the extent permitted under subsection 7.14.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party.
"DLJ" means DLJ Capital Funding, Inc.
"DOCUMENTATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"DOLLAR EQUIVALENT" means, at any time, (x) as to any amount
denominated in Dollars, the amount thereof at such time, and (y) as to any
amount denominated in a currency other than Dollars, the equivalent amount in
Dollars as determined by Administrative Agent at such time on the basis of the
Exchange Rate for the purchase of Dollars with such currency on the most recent
Computation Date provided for in subsection 2.1F(i) or such other time as may be
reasonably specified by Administrative Agent.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"DOMESTIC SUBSIDIARY" means a direct or indirect Subsidiary of
Company that is incorporated or organized under the laws of a state of the
United States of America or the District of Columbia.
"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other person (other than a natural
Person) approved by the Administrative Agent, in the case of any assignment of a
Revolving Loan, the Issuing Lender, and, unless (X) such Person is taking
delivery of an assignment in connection with physical settlement of a credit
derivatives transaction or (Y) an Event of Default has occurred and is
continuing, Company (each such approval not to be unreasonably withheld or
delayed). If the consent of Company to an assignment or to an Eligible Assignee
is required hereunder (including a consent to an assignment which does not meet
the minimum assignment thresholds specified in subsection 10.1B(i)), Company
shall be deemed to have given its consent five (5) Business Days after the date
notice thereof has been delivered by the assigning Lender (through the
14
Administrative Agent) unless such consent is expressly refused by Company prior
to such fifth Business Day.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is, or during the last six years was, maintained
or contributed to by Company, any of its Subsidiaries or any of their respective
ERISA Affiliates. Any such plan of a former ERISA Affiliate of Company or any of
its Subsidiaries shall continue to be considered an Employee Benefit Plan within
the meaning of this definition solely with respect to the period during which
such former ERISA Affiliate was an ERISA Affiliate of Company or any of its
Subsidiaries with respect to liabilities for which Company or any of its
Subsidiaries could be liable under the Internal Revenue Code or ERISA.
"ENVIRONMENTAL CLAIM" means any investigation, written notice,
written notice of violation, claim, action, suit, proceeding, written demand,
abatement order or other order or directive (conditional or otherwise), by any
governmental authority or any other Person, arising (i) pursuant to or in
connection with any actual or alleged violation of any Environmental Law, (ii)
in connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged damage,
injury, threat or harm to health, safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all federal, state, foreign or
local statutes, ordinances, orders, rules, regulations, judgments, Governmental
Authorizations, binding and enforceable guidance documents, or any other
requirements of governmental authorities now or hereafter in effect relating to
(i) environmental matters, including those relating to any Hazardous Materials
Activity, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
in any manner applicable to Company or any of its Subsidiaries or any Facility,
including the Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C.ss.9601 ET SEQ.), the Hazardous Materials Transportation Act (49
U.S.C.ss.1801 ET SEQ.), the Resource Conservation and Recovery Act (42
U.S.C.ss.6901 ET SEQ.), the Federal Water Pollution Control Act (33
U.S.C.ss.1251 ET SEQ.), the Clean Air Act (42 U.S.C.ss.7401 ET SEQ.), the Toxic
Substances Control Act (15 U.S.C. ss.2601 ET SEQ.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C.ss.136 ET SEQ.), the Occupational Safety
and Health Act (29 U.S.C.ss.651 ET SEQ.), the Oil Pollution Act (33
U.S.C.ss.2701 ET SEQ.) and the Emergency Planning and Community Right-to-Know
Act (42 U.S.C.ss.11001 ET SEQ.), each as amended or supplemented, any analogous
state or local statutes or laws, now or hereafter in effect, and any regulations
promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor thereto.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation
15
described in clause (i) above or any trade or business described in clause (ii)
above is a member. Any former ERISA Affiliate of Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities for which Company or such Subsidiary could be liable
under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal, during any year for which it was a "substantial employer" (as
defined in Section 4001(a) of ERISA), by Company, any of its Subsidiaries or any
of their respective ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which would reasonably be expected to constitute grounds
under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by Company,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act
or omission which would reasonably be expected to give rise to the imposition on
Company or any of its Subsidiaries of material fines, penalties, taxes or
related charges under Chapter 43 of the Internal Revenue Code or under Section
409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any
Employee Benefit Plan; (ix) the occurrence of an act or omission which would
reasonably be expected to give rise to the imposition on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates of material fines,
penalties, taxes or related charges under Section 4071 of ERISA in respect of
any Employee Benefit Plan; (x) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Company, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan, which could reasonably be expected to result in a
liability to the Company, any of its Subsidiaries or any of their respective
ERISA Affiliates in excess of $500,000; (xi) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other Employee
Benefit Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify
16
under Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xii) the imposition of a Lien
pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or
pursuant to ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"EXCHANGE RATE" means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter of
Credit, the nominal rate of exchange of the applicable Issuing Lender in the New
York foreign exchange market for the purchase by such Issuing Lender (by cable
transfer) of such currency in exchange for Dollars at 12:00 noon (New York time)
one Business Day prior to such date, expressed as a number of units of such
currency per one Dollar.
"EXISTING COMPANY BANK DEBT" means the Indebtedness under (x) the
Credit Agreement dated as of July 28, 1997 by and among Company, the various
financial institutions named therein, and Xxxxxx Financial, Inc., as agent, (y)
the Term Loan Agreement dated as of May 28, 1998 by and among Company, the
various financial institutions named therein, and Xxxxxx Financial, Inc., as
agent, and (z) the Term Loan Agreement dated as of June 9, 2000 by and among
Company, the various financial institutions named therein, and DLJ, as agent,
each as amended, supplemented or otherwise modified through the Closing Date.
"EXISTING COMPANY CONVERTIBLE DEBT" means Company's 5-1/2%
Convertible Subordinated Debentures due 2001 in an aggregate principal amount of
$35 million.
"EXISTING COMPANY SENIOR NOTES" means Company's 10-7/8% Senior Notes
due 2004 in an aggregate principal amount of $110 million.
"EXISTING LETTERS OF CREDIT" means the letters of credit identified
as such in SCHEDULE 7.4 annexed hereto (but not any refinancings, renewals or
extensions thereof).
"EXISTING SCIENTIFIC GAMES BANK DEBT" means the Indebtedness under
(i) the Credit Agreement dated as of November 30, 1999 by and among Scientific
Games and Scientific Games, Inc., a Delaware corporation, as co-borrowers, the
lenders referred to therein and First Union National Bank, as administrative
agent thereunder, and (ii) the 364-Day Credit Agreement dated as of November 30,
1999 by and among Scientific Games and Scientific Games, Inc., as borrowers, and
First Union National Bank, as administrative agent, each as amended,
supplemented or otherwise modified through the Closing Date.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by Company, Scientific Games or any
of their respective Subsidiaries or any of their respective predecessors or
Affiliates.
17
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FINANCIAL CONDITION CERTIFICATE" means a Financial Condition
Certificate, substantially in the form of EXHIBIT VI annexed hereto, dated as of
the Closing Date.
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
4.1J(iv).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien has priority over any other Lien on such Collateral (other than Permitted
Encumbrances which as a matter of statutory law have priority over any other
Lien irrespective of the prior perfection or filing of such other Lien) and (ii)
such Lien is the only Lien (other than Permitted Encumbrances) to which such
Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of Company or its
Subsidiaries ending on January 31, April 30, July 31 and October 31 of each
calendar year; PROVIDED that, until the date on which Company changes its Fiscal
Year from a Fiscal Year ending on October 31 of each calendar year to a Fiscal
Year ending on December 31 of each calendar year pursuant to subsection 6.11,
"Fiscal Quarter" shall be deemed for all purposes hereunder to mean, unless the
context otherwise requires, a fiscal quarter of Company and its Subsidiaries
ending on March 31, June 30, September 30 and December 31 of each calendar year;
PROVIDED, FURTHER that, from and after the date on which Company changes its
fiscal year from a fiscal year ending on October 31 of each calendar year to a
fiscal year ending on December 31 of each calendar year, "Fiscal Quarter" shall
mean a fiscal quarter of Company and its Subsidiaries ending on March 31, June
30, September 30 and December 31 of each calendar year.
"FISCAL YEAR" means the fiscal year, in the case of Company and its
Subsidiaries (other than Scientific Games and its Subsidiaries), ending on
October 31 of each calendar year, and in the case of Scientific Games and its
Subsidiaries, ending on December 31 of each calendar year; PROVIDED that, until
Company changes its fiscal year from a fiscal year ending on October 31 of each
calendar year to a fiscal year ending on December 31 of each calendar year,
"Fiscal Year" of Company and its Subsidiaries shall be deemed for all purposes
hereunder to mean, unless context otherwise requires, a fiscal year of Company
deemed for all purposes hereunder to end on December 31 of each calendar year;
PROVIDED, FURTHER that, from and after the date on which Company changes its
fiscal year from a fiscal year ending on October 31 of each calendar year to a
fiscal year ending on December 31 of each calendar year, "Fiscal Year" shall
mean a fiscal year of Company and its Subsidiaries ending on December 31 each
calendar year.
18
"FLOOD HAZARD PROPERTY" means a Mortgaged Property located in an
area designated by the Federal Emergency Management Agency as having special
flood or mud slide hazards.
"FOREIGN SUBSIDIARY" means a direct or indirect Subsidiary of
Company which is incorporated or organized under the laws of any government or
sovereignty other than any state of the United States of America or the District
of Columbia.
"FUND" means any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
business.
"FUNDING AND PAYMENT OFFICE" means (i) the office of Administrative
Agent and Swing Line Lender located at 000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000 or
(ii) such other office of Administrative Agent and Swing Line Lender as may from
time to time hereafter be designated as such in a written notice delivered by
Administrative Agent and Swing Line Lender to Company and each Lender.
"FUNDING DATE" means the date of the funding of a Loan, which date
shall be a Business Day.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENTAL ACTS" has the meaning assigned to that term in
subsection 3.5A.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance
at the applicable time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "acutely hazardous waste", "radioactive waste", "biohazardous waste",
"pollutant", "toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or expression intended
to define, list or classify substances by reason of properties harmful to
health, safety or the indoor or outdoor environment (including harmful
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Laws); (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substances or explosives; (v) any radioactive materials; (vi)
any asbestos-containing materials; (vii) urea
19
formaldehyde foam insulation; (viii) electrical equipment which contains any oil
or dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and
(x) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, presence, storage, Release, threatened Release,
discharge, placement, generation, transportation, processing, construction,
treatment, abatement, removal, remediation, disposal, disposition or handling of
any Hazardous Materials, and any corrective action or response action with
respect to any of the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively, and not entered into for speculative purposes.
"INACTIVE SUBSIDIARY" means any Subsidiary of Company that does not
engage in any business activity, which Subsidiary, together with all other
Inactive Subsidiaries, (a) does not own assets with an aggregate value for all
such Inactive Subsidiaries of greater than $50,000, and (b) does not, together
with all other Inactive Subsidiaries, generate aggregate revenues of greater
than $50,000 in any single Fiscal Year; and all Inactive Subsidiaries shall be
designated as such on SCHEDULE 5.1.
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (i) all indebtedness for borrowed money, (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument, and (v) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person. Obligations under
Interest Rate Agreements and Currency Agreements constitute (X) in the case of
Hedge Agreements, Contingent Obligations, and (Y) in all other cases,
Investments, and in neither case constitute Indebtedness.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
subsection 10.3.
"INDEMNITEE" has the meaning assigned to that term in subsection
10.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Company and its Subsidiaries, taken as a whole.
20
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, the last Business Day of each March, June, September and December, of each
year, commencing on the first such date to occur after the Closing Date, and
(ii) with respect to any LIBO Rate Loan, the last Business Day of each Interest
Period applicable to such Loan; PROVIDED that in the case of each Interest
Period of longer than three months "Interest Payment Date" shall also include
the Business Day that is three months, or any multiple thereof, after the
commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Company or any of its Subsidiaries is a party.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Company other than a wholly-owned Domestic Subsidiary), (ii) any direct or
indirect redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of Company from any Person other than Company or any of its
wholly-owned Domestic Subsidiaries, of any equity Securities of such Subsidiary,
(iii) any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person (other than a
wholly-owned Domestic Subsidiary), including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business, or (iv)
Interest Rate Agreements or Currency Agreements not constituting Hedge
Agreements. The amount of any Investment shall be the original cost of such
Investment PLUS the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment; PROVIDED that the amount of an Investment shall be
reduced by the amount of capital returned on such Investment (as determined on
an after tax basis).
"IP COLLATERAL" means, collectively, any Collateral under the
Security Agreement consisting of trademarks, servicemarks, tradenames,
tradesecrets, business names, logos, patents, patent applications, licenses,
copyrights, any registration and franchise rights and interests relating
thereto, and any other intellectual property of any type, and all goodwill
associated with any of the foregoing.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Revolving Lender that agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
21
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; PROVIDED
that in no event shall any Subsidiary of any Person be considered to be a Joint
Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
(and all other parties having a consent right) under the related lease,
satisfactory in form and substance to Administrative Agent, pursuant to which
such lessor (and all other parties having a consent right) agrees, for the
benefit of Administrative Agent, (i) that without any further consent of such
lessor (and all other parties having a consent right) or any further action on
the part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if any Agent, any Lender, or an Affiliate of
either so acquires such Leasehold Property), (ii) that such lessor shall not
terminate such lease as a result of a default by such Loan Party thereunder
without first giving Administrative Agent notice of such default and at least 15
days in the case of a monetary default and 30 days in the case of a non-monetary
default beyond the cure period afforded to the tenant thereunder to cure such
default, and (iii) that the related lease is in full force and effect, that no
defaults by the lessee exist thereunder, and such other information as is
customarily included in a lessor's estoppel certificate, and (iv) to such other
matters relating to such Leasehold Property as Administrative Agent may
reasonably request.
"LCPI" has the meaning assigned to that term in the introduction to
this Agreement.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party
as lessee under any lease of real property.
"LENDER" and "LENDERS" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns pursuant to subsection 10.1, and the term "Lenders" shall
include Swing Line Lender unless the context otherwise requires.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial Letters
of Credit and Standby Letters of Credit issued or to be issued by Issuing
Lenders for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding PLUS
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed by Company. For the purposes of
this definition, any amount described in clause (i) or (ii) of the preceding
sentence which is denominated in a currency other than Dollars shall be valued
based on the applicable Exchange Rate for such currency as of the applicable
date of determination.
"LIBO RATE LOANS" means Loans bearing interest at rates determined
by reference to the Adjusted LIBO Rate as provided in subsection 2.2A.
22
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Tranche A Term Loans,
Tranche B Term Loans, Revolving Loans or Swing Line Loans or any combination
thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Company in favor of an Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"LOAN PARTY" means each of Acquisition Co., Company and any of
Company's Subsidiaries from time to time executing a Loan Document, and "LOAN
PARTIES" means all such Persons, collectively.
"MARGIN DETERMINATION CERTIFICATE" means a Margin Determination
Certificate of Company delivered pursuant to 6.1(xviii) setting forth in
reasonable detail the calculation of the Consolidated Leverage Ratio for the
four-Fiscal Quarter period ending as of the last day of the Fiscal Quarter
immediately preceding the Fiscal Quarter in which such certificate is delivered.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"MASTER RESTATEMENT CONFIRMATION" means that certain Master
Restatement Confirmation among the Loan Parties and the Administrative Agent
substantially in the form of EXHIBIT XVI annexed hereto.
"MATERIAL ADVERSE EFFECT" means (i) any event or change in or effect
on the business of Company and its Subsidiaries, taken as a whole, that is or
can reasonably be expected to be materially adverse to the business, operations,
properties (including intangible properties), condition (financial or
otherwise), assets, liabilities or prospects of Company and its Subsidiaries,
taken as a whole, or (ii) the impairment in any material respect of the ability
of any Loan Party to perform, or of Administrative Agent or Lenders to enforce,
the Obligations.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or of
material importance to the operations of Company or any of its Subsidiaries.
"MERGER" means the merger of Acquisition Co. with and into
Scientific Games pursuant to the Merger Agreement, with Scientific Games as the
surviving corporation.
"MERGER AGREEMENT" means the Agreement and Plan of Merger dated as
of May 18, 2000 by and among Company, Acquisition Co. and Scientific Games, as
such agreement may be amended from time to time to the extent permitted under
subsection 7.14.
23
"MERGER DATE" means the date upon which the Merger is consummated.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in such form as may be approved by Administrative
Agent in its reasonable discretion, in each case with such changes thereto as
may be recommended by Administrative Agent's local counsel based on local laws
or customary local mortgage or deed of trust practices, or (ii) at the option of
Administrative Agent, in the case of an Additional Mortgaged Property, an
amendment to an existing Mortgage, in form reasonably satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage, in either case as such
security instrument or amendment may be amended, supplemented or otherwise
modified from time to time, and "MORTGAGES" means all such instruments,
including the Closing Date Mortgages, and any Additional Mortgages,
collectively.
"MORTGAGED PROPERTY" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) received from such Asset Sale, net of (a) any amounts properly
reserved on the financial statements of Company and its Subsidiaries in
accordance with GAAP with respect to contingent liabilities directly related to
such Asset Sale (provided that the aggregate amount of such reserved amount
shall not exceed $5 million at any time), and (b) any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, and premium or penalty,
if any, and interest on, any Indebtedness (other than the Loans) that is secured
by a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NET DEBT SECURITIES PROCEEDS" has the meaning assigned to that term
in subsection 2.4B(iii)(d).
"NET EQUITY SECURITIES PROCEEDS" has the meaning assigned to that
term in subsection 2.4B(iii)(c).
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Company or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Company or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Company or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Company or such Subsidiary in respect thereof.
24
"NOTES" means one or more of the Tranche A Term Notes, Tranche B
Term Notes, Revolving Notes or Swing Line Notes or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT I annexed hereto delivered by Company to Administrative Agent pursuant
to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of EXHIBIT II annexed hereto delivered by Company to Administrative
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"OBLIGATIONS" means all obligations of every nature of each Loan
Party from time to time owed to Agents, Lenders or any of them under the Loan
Documents to which any of the Lenders is a party, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president, one of its
vice-presidents, its chief financial officer (or if there is no chief financial
officer, its chief accounting officer) or its treasurer; PROVIDED that every
Officer's Certificate with respect to the compliance with a condition precedent
to the making of any Loans hereunder shall include (i) a statement that the
officer or officers making or giving such Officer's Certificate has or have read
such condition and any definitions or other provisions contained in this
Agreement relating thereto, (ii) a statement that, in the opinion of the signer
or signers, such signer or signers has or have made or has or have caused to be
made such examination or investigation as is necessary to enable such signer or
signers to express an informed opinion as to whether or not such condition has
been complied with, and (iii) a statement as to whether, in the opinion of the
signer or signers, such condition has been complied with.
"OLIVETTI" means Olivetti S.p.A.
"OPERATING LEASE" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease in
accordance with GAAP other than any such lease under which that Person is the
lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITION" means any acquisition, whether by purchase,
merger, reorganization or any other method, by Company or any of its
Subsidiaries of (x) another Person which is engaged primarily in the same or a
related line of business as Company and its Subsidiaries or (y) any assets or
other property of another Person relating primarily to the same or a related
line of business as Company and its Subsidiaries (any such Person, assets or
other
25
property being an "Acquired Business"); provided that any such Permitted
Acquisition shall comply with the provisions of subsection 7.7(vii).
"PERMITTED CURRENCY" means, Euros, Pounds Sterling, Italian Lire,
French Francs, Belgium Francs, Irish Punts, German Marks, Luxembourg Francs,
Dutch Guilders and Austrian Schillings.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding (x) any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or by ERISA and (y) any such Lien relating to or
imposed in connection with any Environmental Claim which, solely with respect to
Liens within the ambit of this clause (y), would give rise to a Material Adverse
Effect):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection 6.3 but
excluding any lien for the reimbursement of charges incurred by any
governmental authorities in connection with any Hazardous Materials
Activity;
(ii) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in
each case incurred in the ordinary course of business (a) for amounts not
yet overdue or (b) for amounts that are overdue and that (in the case of
any such amounts overdue for a period in excess of 15 days) are being
contested in good faith by appropriate proceedings, so long as (1) such
reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts, and (2) in the
case of a Lien with respect to any portion of the Collateral, such contest
proceedings conclusively operate to stay the sale of any portion of the
Collateral on account of such Lien;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids, leases,
government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations (exclusive of obligations for the
payment of borrowed money), so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(v) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering in
any material respect with the ordinary conduct of the business of Company
or any of its Subsidiaries or resulting in a material diminution in the
value of any Collateral as security for the Obligations;
(vi) easements, rights-of-way, covenants, conditions, restrictions,
encroachments, and other defects or irregularities in title, in each case
which do not and will not interfere in any material respect with the
ordinary conduct of the business of Company or any of its Subsidiaries or
result in a material diminution in the value of any Collateral as security
for the Obligations;
(vii) any (a) interest or title of a lessor or sublessor under any
lease permitted under this Agreement, (b) restriction or encumbrance that
the interest or title of such lessor or sublessor may be subject to, or
(c) subordination of the interest of the lessee or sublessee under such
lease to any restriction or encumbrance referred to in the preceding
clause (b), so long as the holder of such restriction or encumbrance
agrees to recognize the rights of such lessee or sublessee under such
lease;
26
(viii) Liens arising from filing UCC financing statements relating
solely to leases not prohibited by this Agreement;
(ix) Liens in favor of customs and revenue authorities arising as
a matter of law to secure payment of customs duties in connection with the
importation of goods;
(x) any zoning or similar law or right reserved to or vested in
any governmental office or agency to control or regulate the use of any
real property;
(xi) Liens securing obligations (other than obligations
representing Indebtedness for borrowed money) under operating, reciprocal
easement or similar agreements entered into in the ordinary course of
business of Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company or any of its Subsidiaries in the
ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of Company or such Subsidiary.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by Credit Suisse First Boston ("CSFB") as its prime commercial
lending rate in effect at its principal office in New York City. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. CSFB or any Lender may make commercial loans
or other loans at rates of interest at, above or below the Prime Rate.
"PRO FORMA BASIS" means, as of any date of determination, the
compliance of Company with the financial covenants set forth in subsection 7.6A,
7.6B and 7.6C as of the last day of the four Fiscal Quarter period most recently
ended prior to such date of determination for which the relevant financial
information is available (the "COMPLIANCE PERIOD"), after giving effect on a PRO
FORMA basis to any Permitted Acquisitions made during such Compliance Period and
any dispositions made during such Compliance Period, other than sales of
inventory in the ordinary course of business and dispositions of obsolete
equipment on the following basis:
(i) any Indebtedness incurred or assumed by Company or any of its
Subsidiaries in connection with such Permitted Acquisitions and any
Indebtedness repaid in connection with such Permitted Acquisitions or
dispositions shall be deemed to have been incurred or repaid,
respectively, as of the first day of the Compliance Period;
(ii) if such Indebtedness incurred or assumed by Company or any of
its Subsidiaries in connection with such Permitted Acquisitions has a
floating or formula rate, then the rate of interest for such Indebtedness
for the applicable period shall be
27
computed as if the rate in effect for such Indebtedness on the relevant
measurement date had been the applicable rate for the entire applicable
period;
(iii) income statement items (whether positive or negative)
attributable to the property or business acquired or disposed of in such
Permitted Acquisitions or dispositions shall be included as if such
acquisitions or dispositions took place on the first day of such
Compliance Period on a PRO FORMA BASIS; and
(iv) any historical extraordinary non-recurring costs or expenses
or other verifiable costs or expenses that will not continue after the
acquisition or disposition date may be eliminated and other expenses and
cost reductions may be reflected on a basis consistent with Regulation S-X
promulgated by the Securities and Exchange Commission.
With respect to any such Permitted Acquisitions, such pro forma
calculations shall be based on the audited or reviewed financial results
to the extent delivered in compliance with clause (g) of subsection
7.7(vii). All PRO FORMA adjustments shall be approved by the
Administrative Agent.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Tranche A Term Loan Commitment or
the Tranche A Term Loan of any Lender, the percentage obtained by DIVIDING (x)
the Tranche A Term Loan Exposure of that Lender BY (y) the aggregate Tranche A
Term Loan Exposure of all Lenders, (ii) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan Commitment or
the Tranche B Term Loan of any Lender, the percentage obtained by DIVIDING (x)
the Tranche B Term Loan Exposure of that Lender BY (y) the aggregate Tranche B
Term Loan Exposure of all Lenders, (iii) with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or participations
therein purchased by any Lender or any participations in any Swing Line Loans
purchased or deemed purchased by any Revolving Lender, the percentage obtained
by DIVIDING (x) the Revolving Loan Exposure of that Lender BY (y) the aggregate
Revolving Loan Exposure of all Lenders, and (iv) for all other purposes with
respect to each Lender, the percentage obtained by DIVIDING (x) the sum of the
Tranche A Term Loan Exposure of that Lender PLUS the Tranche B Term Loan
Exposure of Lender PLUS the Revolving Loan Exposure of that Lender BY (y) the
sum of the aggregate Tranche A Term Loan Exposure of all Lenders PLUS the
Tranche B Term Loan Exposure of all Lenders PLUS the aggregate Revolving Loan
Exposure of all Lenders, in any such case as the applicable percentage may be
adjusted by assignments permitted pursuant to subsection 10.1. The initial Pro
Rata Share of each Lender for purposes of each of clauses (i), (ii) and (iii) of
the preceding sentence is set forth opposite the name of that Lender in SCHEDULE
2.1 annexed hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness of Company or any
of its Subsidiaries incurred in connection with the purchase of assets or other
property for the business of Company or any of its Subsidiaries; provided that
the recourse of the lenders with respect to
28
such Indebtedness is limited solely to the assets or other property so purchased
(and the proceeds of such assets or other property) without further recourse to
either Company or any of its Subsidiaries.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or desirable, in the reasonable judgment of Administrative
Agent, to give constructive notice of such Leasehold Property to third-party
purchasers and encumbrancers of the affected real property. For purposes of this
definition, the term "RECORD DOCUMENT" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document or a memorandum thereof, executed and acknowledged by such holder, in
each case in form sufficient to give such constructive notice upon recordation
and otherwise in form reasonably satisfactory to Administrative Agent.
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iv).
"REGISTER" has the meaning assigned to that term in subsection 2.1D.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means, collectively, the Merger Agreement, the
Convertible Preferred Stock Purchase Agreement, the Stockholders Agreement, the
Certificate of Designations, the Senior Subordinated Note Indenture and the
Senior Subordinated Notes.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REPLACED LENDER" has the meaning assigned to that term in
subsection 2.8.
"REPLACEMENT LENDER" has the meaning assigned to that term in
subsection 2.8.
29
"REQUEST FOR ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of EXHIBIT III annexed hereto delivered by Company to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
"REQUISITE CLASS LENDERS" means, at any time of determination, (i)
for the Class of Lenders having Tranche A Term Loan Exposure, Lenders having or
holding more than 50% of the aggregate Tranche A Term Loan Exposure of all
Lenders, (ii) for the Class of Lenders having Tranche B Term Loan Exposure,
Lenders having or holding more than 50% of the aggregate Tranche B Term Loan
Exposure of all Lenders, (iii) for the Class of Lenders having Revolving Loan
Exposure, Lenders having or holding more than 50% of the aggregate Revolving
Loan Exposure of all Lenders and (iv) for any Lenders having exposure in
additional commitments or loans in any additional Class created in accordance
with clause (vi) of subsection 10.6A, Lenders having or holding more than 50% of
the aggregate exposure in commitments or loans of such Class.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the sum of (i) the aggregate Tranche A Term Loan Exposure of all Lenders PLUS
(ii) the aggregate Tranche B Term Loan Exposure of all Lenders PLUS (iii) the
aggregate Revolving Loan Exposure of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any distribution, direct or
indirect, on account of any class of stock of Company now or hereafter
outstanding, except a distribution payable solely in shares of that class of
stock payable solely to holders of that class, (ii) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any class of stock of Company now or hereafter outstanding,
(iii) any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of stock of
Company now or hereafter outstanding, and (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment with respect to, any Subordinated Indebtedness.
"RESTATEMENT DATE AGREEMENTS" shall mean this Agreement, the
Security Agreement, the Subsidiary Guaranty and the Master Restatement
Confirmation.
"RESTATEMENT EFFECTIVE DATE" means the date on or before October 6,
2000, on which the conditions set forth in subsection 4.4 are satisfied or
waived in writing by Administrative Agent and Requisite Lenders.
"REVISED FINANCIAL PLAN" has the meaning assigned to that term in
subsection 6.1(xiii).
"REVOLVING LENDER" means a Lender having a Revolving Loan
Commitment.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(iii), and "REVOLVING LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means September 30,
2006.
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"REVOLVING LOAN EXPOSURE" means, with respect to any Revolving
Lender as of any date of determination (i) prior to the termination of the
Revolving Loan Commitments, that Revolving Lender's Revolving Loan Commitment
and (ii) after the termination of the Revolving Loan Commitments, the sum of (a)
the aggregate outstanding principal amount of the Revolving Loans of that
Revolving Lender PLUS (b) in the event that Revolving Lender is an Issuing
Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit
issued by that Revolving Lender (in each case net of any participations
purchased or deemed purchased by other Revolving Lenders in such Letters of
Credit or any unreimbursed drawings thereunder) PLUS (c) the aggregate amount of
all participations purchased or deemed purchased by that Revolving Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters of
Credit PLUS (d) in the case of Swing Line Lender, the aggregate outstanding
principal amount of all Swing Line Loans (net of any participations therein
purchased or deemed purchased by other Revolving Lenders) PLUS (e) the aggregate
amount of all participations purchased or deemed purchased by that Revolving
Lender in any outstanding Swing Line Loans.
"REVOLVING LOANS" means the Loans made by Revolving Lenders to
Company pursuant to subsection 2.1A(iii).
"REVOLVING NOTES" means (i) the promissory notes of Company issued
pursuant to subsection 2.1E(iii) on the Closing Date and (ii) any promissory
notes issued by Company pursuant to subsection 10.1B in connection with
assignments of the Revolving Loan Commitments and Revolving Loans of any
Revolving Lenders, in each case substantially in the form of EXHIBIT IV-C
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"SCHEDULED PRINCIPAL PAYMENTS" has the meaning assigned to that term
in the definition of "Consolidated Fixed Charges" in this subsection 1.1.
"SCIENTIFIC GAMES" means Scientific Games Holdings Corp., a Delaware
corporation.
"SCIENTIFIC GAMES COMMON STOCK" means prior to the Merger the Common
Stock, $.001 par value, of Scientific Games.
"SECURITY AGREEMENT" means (i) on and after the Closing Date and
before the Restatement Effective Date, the Security Agreement executed and
delivered by Company and the wholly-owned Domestic Subsidiaries and to be
executed and delivered by additional wholly-owned Domestic Subsidiaries from
time to time thereafter in accordance with subsection 6.8, substantially in the
form of EXHIBIT XII annexed to the Closing Date Credit Agreement, as such
Security Agreement may thereafter be amended, supplemented or otherwise modified
from time to time and any documents or agreements delivered by Company or any of
its wholly-owned Domestic Subsidiaries with respect to the pledge of capital
stock or other equity interests in Foreign Subsidiaries pursuant to subsection
6.8D; and (ii) on and after the Restatement Effective Date, the Amended and
Restated Security Agreement executed and delivered by Company and the
wholly-owned Domestic Subsidiaries and to be executed and delivered by
additional wholly-owned Domestic Subsidiaries from time to time thereafter in
accordance with subsection 6.8, substantially in the form of EXHIBIT XII annexed
hereto, as such Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time and any
31
documents or agreements delivered by Company or any of its wholly-owned Domestic
Subsidiaries with respect to the pledge of capital stock or other equity
interests in Foreign Subsidiaries pursuant to subsection 6.8D.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as of
August 14, 2000 executed by Company and a trustee named therein pursuant to
which the Senior Subordinated Notes were issued, as amended by the First
Supplemental Indenture dated as of September 6, 2000, and as such indenture may
be further amended from time to time to the extent permitted under subsection
7.14.
"SENIOR SUBORDINATED NOTES" means the unsecured Senior Subordinated
Notes due 2010, issued by Company pursuant to the Senior Subordinated Note
Indenture, as such Senior Subordinated Notes may be amended from time to time to
the extent permitted under subsection 7.14, all the proceeds of which are to be
used pursuant to subsection 4.1D.
"SGIL" has the meaning assigned to that term in subsection 7.1(x).
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations owed to third party
insurers of Company or any of its Subsidiaries, (iv) obligations with respect to
Capital Leases or Operating Leases of Company or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of Company or any of its
Subsidiaries, in any case if
32
required by law or governmental rule or regulation or in accordance with custom
and practice in the industry; provided that Standby Letters of Credit may not be
issued for the purpose of supporting (a) trade payables or (b) any Indebtedness
constituting "antecedent debt" (as that term is used in Section 547 of the
Bankruptcy Code).
"STOCKHOLDERS' AGREEMENT" means that certain Stockholders' Agreement
dated as of September 6, 2000, by and among Company, Cermatica Gaming, S.A.,
Olivetti International, S.A., The Oak Fund, Peconic Fund Ltd. and Ramius
Securities, LLC.
"SUBORDINATED INDEBTEDNESS" means the Senior Subordinated Notes, the
Convertible Subordinated Debt and any other Indebtedness of Company subordinated
in right of payment to the Obligations pursuant to documentation containing
maturities, amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUBSIDIARY GUARANTOR" means (i) any wholly-owned Domestic
Subsidiary with respect to the Subsidiary Guaranty executed and delivered by
such Subsidiary in favor of Administrative Agent, on behalf of Lenders, on the
Closing Date and to be executed and delivered by any additional wholly-owned
Domestic Subsidiaries from time to time thereafter in accordance with subsection
6.8, and (ii) any wholly-owned Domestic Subsidiary that executes and delivers a
counterpart of the Subsidiary Guaranty in favor of Administrative Agent, on
behalf of Lenders, from time to time after the Closing Date in accordance with
subsection 6.8.
"SUBSIDIARY GUARANTY" means (i) on and after the Closing Date and
before the Restatement Effective Date , the Subsidiary Guaranty in favor of
Administrative Agent, on behalf of Lenders, executed and delivered by the
wholly-owned Domestic Subsidiaries (other than any Inactive Subsidiary) on the
Closing Date and to be executed and delivered by additional wholly-owned
Domestic Subsidiaries (other than any Inactive Subsidiary) from time to time
thereafter in accordance with subsection 6.8, substantially in the form of
Exhibit XIII annexed to the Closing Date Credit Agreement, as such Subsidiary
Guaranty may thereafter be amended, supplemented or otherwise modified from time
to time; and (ii) on and after the Restatement Effective Date, the Amended and
Restated Subsidiary Guaranty in favor of Administrative Agent, on behalf of
Lenders, executed and delivered by the wholly-owned Domestic Subsidiaries (other
than any Inactive Subsidiary) on the Restatement Effective Date and to be
executed and delivered by additional wholly-owned Domestic Subsidiaries (other
than any Inactive Subsidiary) from time to time thereafter in accordance with
subsection 6.8, substantially in the form of Exhibit XIII annexed hereto, as
such Subsidiary Guaranty may hereafter be amended, supplemented or otherwise
modified from time to time.
33
"SUPERMAJORITY LENDERS" means Lenders having or holding more than
[90%] of the sum of (i) the aggregate Tranche A Term Loan Exposure of all
Lenders PLUS (ii) the aggregate Tranche B Term Loan Exposure of all Lenders PLUS
(iii) the aggregate Revolving Loan Exposure of all Lenders.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that
term in subsection 9.1B.
"SWING LINE LENDER" means DLJ, or any Person serving as a successor
Administrative Agent hereunder, in its capacity as Swing Line Lender hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"SWING LINE LOANS" means the Loans made by Swing Line Lender to
Company pursuant to subsection 2.1A(iv).
"SWING LINE NOTE" means (i) the promissory note of Company issued
pursuant to subsection 2.1E(iii) on the Closing Date and (ii) any promissory
note issued by Company to any successor Swing Line Lender pursuant to the last
sentence of subsection 9.5B, in each case substantially in the form of EXHIBIT
IV-D annexed hereto, as it may be amended, supplemented or otherwise modified
from time to time.
"SYNDICATION AGENT" has the meaning assigned to that term in the
introduction to this Agreement.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; PROVIDED that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its lending office) is located or in which that Person
(and/or, in the case of a Lender, its lending office) is deemed to be doing
business on all or part of the net income, profits or gains (whether worldwide,
or only insofar as such income, profits or gains are considered to arise in or
to relate to a particular jurisdiction, or otherwise) of that Person (and/or, in
the case of a Lender, its lending office).
"TENDER PREMIUMS" means the tender premiums and/or redemption
payable under the Existing Company Senior Notes.
"TERM LOANS" means the Tranche A Term Loans and the Tranche B Term
Loans.
"TITLE COMPANY" means one or more title insurance companies
reasonably satisfactory to Administrative Agent.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans
34
PLUS (ii) the aggregate principal amount of all outstanding Swing Line Loans
PLUS (iii) the Letter of Credit Usage.
"TRANCHE A TERM LOAN COMMITMENT" means the commitment of a Lender to
make a Tranche A Term Loan to Company pursuant to subsection 2.1A(i), and
"TRANCHE A TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any Tranche A
Term Loan Lender as of any date of determination (i) prior to the funding of all
of the Tranche A Term Loans, that Lender's original Tranche A Term Loan
Commitment and (ii) after the funding of all of the Tranche A Term Loans, the
outstanding principal amount of the Tranche A Term Loan of that Lender.
"TRANCHE A TERM LOAN LENDER" means any Lender who holds a Tranche A
Term Loan Commitment, or who has made a Tranche A Term Loan hereunder and any
assignee of such Lender pursuant to subsection 10.1B.
"TRANCHE A TERM LOANS" means the Tranche A Term Loans made by
Tranche A Term Loan Lenders to Company pursuant to subsection 2.1A(i).
"TRANCHE A TERM NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(iii) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to subsection 10.1B in connection
with assignments of the Tranche A Term Loan Commitments or Tranche A Term Loans
of any Tranche A Term Loan Lenders, in each case substantially in the form of
EXHIBIT IV-A annexed hereto, as they may be amended, supplemented or otherwise
modified from time to time.
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a Lender to
make a Tranche B Term Loan to Company pursuant to subsection 2.1A(ii), and
"TRANCHE B TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any Tranche B
Term Loan Lender as of any date of determination (i) prior to the funding of the
Tranche B Term Loans, that Lender's Tranche B Term Loan Commitment and (ii)
after the funding of the Tranche B Term Loans, the outstanding principal amount
of the Tranche B Term Loan of that Lender.
"TRANCHE B TERM LOAN LENDER" means any Lender who holds a Tranche B
Term Loan Commitment or who has made a Tranche B Term Loan hereunder, and any
assignee of such Lender pursuant to subsection 10.1B.
"TRANCHE B TERM LOANS" means the Tranche B Term Loans made by
Tranche B Term Loan Lenders to Company pursuant to subsection 2.1A(ii).
"TRANCHE B TERM NOTES" means (i) the promissory notes of Company
issued pursuant to subsection 2.1E(iii) on the Closing Date and (ii) any
promissory notes issued by Company pursuant to subsection 10.1B in connection
with assignments of the Tranche B Term Loan Commitments or Tranche B Term Loans
of any Tranche B Term Loan Lenders, in each
35
case substantially in the form of EXHIBIT IV-B annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
any Loan Party or by Scientific Games in connection with the Merger, the related
financing and other transactions contemplated by the Loan Documents and the
Related Agreements in an aggregate amount not to exceed $30.1 million; PROVIDED
that the foregoing shall not include any related non-cash compensation paid to
any of the Lenders or any Affiliates of any of the Lenders on or before the
Closing Date in connection with any of the financings contemplated by the Loan
Documents.
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.
"UK PROPERTY" shall mean the property located at Xxxxxxxx,
Xxxxxxxxxx, Xxxxx XX00, Xxxxxxx.
o ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with the
reconciliation statements provided for in subsection 6.1(v)). Calculations in
connection with the definitions, covenants and other provisions of this
Agreement shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements referred to in subsection 5.3.
o OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
o Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the
reference.
o References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise
specifically provided.
o The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or
matter, shall not be construed to limit such statement, term or
matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or
not nonlimiting language (such as "without limitation" or "but
not limited to" or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all
other items or matters that fall within the broadest possible
scope of such general statement, term or matter.
36
o AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
o COMMITMENTS; MAKING OF LOANS; NOTES.
o COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties
of Company herein set forth, each Tranche A Term Loan Lender
hereby severally agrees to make the Tranche A Term Loans
described in subsection 2.1A(i), each Tranche B Term Loan Lender
hereby severally agrees to make the Tranche B Term Loans
described in subsection 2.1A(ii), each Revolving Lender hereby
severally agrees to make the Revolving Loans described in
subsection 2.1A(iii) and each Swing Line Lender hereby agrees to
make the Swing Line Loans described in subsection 2.1A(iv).
o TRANCHE A TERM LOANS. Each Tranche A Term Loan Lender severally
agrees to lend to Company on the Closing Date an aggregate amount
not exceeding its Pro Rata Share of the aggregate amount of the
Tranche A Term Loan Commitments to be used for the purposes
identified in subsection 2.5A. The amount of each Tranche A Term
Loan Lender's Tranche A Term Loan Commitment is set forth
opposite its name on SCHEDULE 2.1 annexed hereto and the
aggregate amount of the Tranche A Term Loan Commitments is $60
million; PROVIDED that the Tranche A Term Loan Commitments of the
Tranche A Term Loan Lenders shall be adjusted to give effect to
any assignments of the Tranche A Term Loan Commitments pursuant
to subsection 10.1B. Each Tranche A Term Loan Lender's Term Loan
Commitment to the extent unused, shall expire on the close of
business on the Closing Date. Amounts borrowed under this
subsection 2.1A(i) and subsequently repaid or prepaid may not be
reborrowed.
o TRANCHE B TERM LOANS. Each Tranche B Term Loan Lender severally
agrees to lend to Company on the Closing Date an amount not
exceeding its Pro Rata Share of the aggregate amount of the
Tranche B Term Loan Commitments to be used for the purposes
identified in subsection 2.5A. The amount of each Tranche B Term
Loan Lender's Tranche B Term Loan Commitment is set forth
opposite its name on SCHEDULE 2.1 annexed hereto and the
aggregate amount of the Tranche B Term Loan Commitments is $220
million; PROVIDED that the Tranche B Term Loan Commitments of
Tranche B Term Loan Lenders shall be adjusted to give effect to
any assignments of the Tranche B Term Loan Commitments pursuant
to subsection 10.1B. Each Tranche B Term Loan Lender's Tranche B
Term Loan Commitment to the extent unused, shall expire on the
close of business on the Closing Date. Amounts borrowed under
this subsection 2.1A(ii) and subsequently repaid or prepaid may
not be reborrowed.
o REVOLVING LOANS. Each Revolving Lender severally agrees, subject
to the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time
to time, to lend to Company
37
from time to time during the period from the Closing Date to but
excluding the Revolving Loan Commitment Termination Date an
aggregate amount not exceeding its Pro Rata Share of the
aggregate amount of the Revolving Loan Commitments to be used for
the purposes identified in subsection 2.5B. The original amount
of each Revolving Lender's Revolving Loan Commitment is set forth
opposite its name on SCHEDULE 2.1 annexed hereto and the
aggregate original amount of the Revolving Loan Commitments is
$65 million; PROVIDED that the Revolving Loan Commitments of the
Revolving Lenders shall be adjusted to give effect to any
assignments of the Revolving Loan Commitments pursuant to
subsection 10.1B; and PROVIDED FURTHER that the amount of the
Revolving Loan Commitments shall be reduced from time to time by
the amount of any reductions thereto made pursuant to subsections
2.4B(ii) and 2.4B(iii). Each Revolving Lender's Revolving Loan
Commitment shall expire on September 30, 2000 if the Term Loans
are not made on or before such date or on the Revolving Loan
Commitment Termination Date if the Term Loans are made and all
Revolving Loans and all other amounts owed hereunder with respect
to the Revolving Loans and the Revolving Loan Commitments shall
be paid in full no later than the Revolving Loan Commitment
Termination Date. Amounts borrowed under this subsection
2.1A(iii) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect.
o SWING LINE LOANS. Swing Line Lender hereby agrees, subject to the
limitations set forth below with respect to the maximum amount of
Swing Line Loans permitted to be outstanding from time to time,
to make a portion of the Revolving Loan Commitments available to
Company from time to time during the period from the Closing Date
to but excluding the Revolving Loan Commitment Termination Date
by making Swing Line Loans to Company in an aggregate amount not
exceeding the amount of the Swing Line Loan Commitment to be used
for the purposes identified in subsection 2.5B, notwithstanding
the fact that such Swing Line Loans, when aggregated with Swing
Line Lender's outstanding Revolving Loans and Swing Line Lender's
Pro Rata Share of the Letter of Credit Usage then in effect, may
exceed Swing Line Lender's Revolving Loan Commitment. The
original amount of the Swing Line Loan Commitment is $10 million;
PROVIDED that any reduction of the Revolving Loan Commitments
made pursuant to subsection 2.4B(ii) or 2.4B(iii) which reduces
the aggregate Revolving Loan Commitments to an amount less than
the then current amount of the Swing Line Loan Commitment shall
result in an automatic corresponding reduction of the Swing Line
Loan Commitment to the amount of the Revolving Loan Commitments,
as so reduced, without any further action on the part of Company,
Administrative Agent or Swing Line Lender. The Swing Line Loan
Commitment shall expire on September 30, 2000 if the Term Loans
are not made on or before such date or on the Revolving Loan
Commitment
38
Termination Date if the Term Loans are made and all Swing Line
Loans and all other amounts owed hereunder with respect to the
Swing Line Loans shall be paid in full no later than the
Revolving Loan Commitment Termination Date. Amounts borrowed
under this subsection 2.1A(iv) may be repaid and reborrowed to
but excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment
shall be subject to the limitation that in no event shall the Total
Utilization of Revolving Loan Commitments at any time exceed the Revolving
Loan Commitments then in effect.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Swing Line
Lender may, at any time in its sole and absolute discretion, deliver to
Administrative Agent (with a copy to Company), no later than 1:00 P.M.
(New York City time) on the first Business Day in advance of the proposed
Funding Date, a notice (which shall be deemed to be a Notice of Borrowing
given by Company) requesting Revolving Lenders to make Revolving Loans
that are Base Rate Loans on such Funding Date in an amount equal to the
amount of such Swing Line Loans (the "REFUNDED SWING LINE LOANS")
outstanding on the date such notice is given which Swing Line Lender
requests Revolving Lenders to prepay. Anything contained in this Agreement
to the contrary notwithstanding, (i) the proceeds of such Revolving Loans
made by Revolving Lenders other than Swing Line Lender shall be
immediately delivered by Administrative Agent to Swing Line Lender (and
not to Company) and applied to repay a corresponding portion of the
Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, Swing Line Lender's Pro Rata Share of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made by
Swing Line Lender, and such portion of the Swing Line Loans deemed to be
so paid shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note of Swing Line Lender but shall
instead constitute part of Swing Line Lender's outstanding Revolving Loans
and shall be due under the Revolving Note of Swing Line Lender. Company
hereby authorizes Administrative Agent and Swing Line Lender to charge
Company's accounts with Administrative Agent and Swing Line Lender (up to
the amount available in each such account) in order to immediately pay
Swing Line Lender the amount of the Refunded Swing Line Loans to the
extent the proceeds of such Revolving Loans made by Revolving Lenders,
including the Revolving Loan deemed to be made by Swing Line Lender, are
not sufficient to repay in full the Refunded Swing Line Loans. If any
portion of any such amount paid (or deemed to be paid) to Swing Line
Lender should be recovered by or on behalf of Company from Swing Line
Lender in bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably shared
among all Revolving Lenders (other than any Lender which has defaulted in
making Refunded Swing Line Loans to the extent of the defaulting amount)
in the manner contemplated by subsection 10.5.
Immediately upon funding of a Swing Line Loan, each Revolving
Lender shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans in an amount equal to
its Pro Rata Share of the unpaid amount of such Swing Line Loans together
with accrued interest thereon. Upon one Business Day's notice from Swing
Line Lender, each Revolving Lender shall deliver to Swing Line Lender an
amount equal to its respective participation in same day funds at the
Funding and Payment Office. In the event any Revolving Lender fails to
make available to Swing Line Lender the amount of such Revolving Lender's
participation as provided in this paragraph, Swing Line Lender shall be
entitled to recover such amount on demand from such Revolving Lender
together with interest thereon at the Federal Funds Effective Rate for
three Business Days and thereafter at the Base Rate. In the event Swing
Line Lender receives a payment of any amount in which other Revolving
Lenders have purchased participations as provided in this paragraph, Swing
Line Lender shall promptly distribute to each such other Revolving Lender
its Pro Rata Share of such payment.
Anything contained herein to the contrary notwithstanding,
each Revolving Lender's obligation to make Revolving Loans for the purpose
of repaying any Refunded Swing Line Loans pursuant to the second preceding
paragraph and each Revolving Lender's obligation to purchase a
participation in
39
any unpaid Swing Line Loans pursuant to the immediately preceding
paragraph shall be absolute and unconditional and shall not be affected by
any circumstance, including (a) any set-off, counterclaim, recoupment,
defense or other right which such Revolving Lender may have against Swing
Line Lender, Company or any other Person for any reason whatsoever; (b)
the occurrence or continuation of an Event of Default or a Potential Event
of Default; (c) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries; (d) any breach of this Agreement or
any other Loan Document by any party thereto (other than Swing Line
Lender); or (e) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing; PROVIDED that such
obligations of each Revolving Lender are subject to satisfaction of one of
the following conditions (X) Swing Line Lender believes in good faith that
all conditions under Section 4 to the making of the applicable Refunded
Swing Line Loans or unpaid Swing Line Loans, as the case may be, were
satisfied at the time such Refunded Swing Line Loans or unpaid Swing Line
Loans were made or (Y) the satisfaction of any such condition not
satisfied has been waived in accordance with subsection 10.6 prior to or
at the time such Refunded Swing Line Loans or other unpaid Swing Line
Loans were made.
Notwithstanding anything herein to the contrary, with respect
to any Swing Line Loan, the aggregate amount that any Revolving Lender
shall be required to fund, whether by means of a Revolving Loan pursuant
to the third paragraph of this subsection 2.1A(iv) and/or by means of a
participation pursuant to the fourth paragraph of this subsection
2.1A(iv), shall not exceed such Revolving Lender's Pro Rata Share of such
Swing Line Loan.
o INCREASES OF THE REVOLVING LOAN COMMITMENTS. With the written
consent of Administrative Agent, Company may request in writing
at any time during the period from the Closing Date to and
including July 31, 2005 that the then effective aggregate
principal amount of Revolving Loan Commitments be increased;
PROVIDED that (1) the aggregate principal amount of the increases
in Revolving Loan Commitments pursuant to this subsection 2.1A(v)
shall not exceed $35 million, (2) Company may not make more than
one request for such increase in Revolving Loan Commitments, (3)
no Event of Default or Potential Event of Default shall have
occurred and be continuing or shall occur as a result of such
increases in Revolving Loan Commitments, and (4) Company shall,
and shall cause its Subsidiaries to, execute and deliver such
documents and instruments and take such other actions (including,
without limitation, obtaining appropriate endorsements to title
insurance policies) as may be reasonably requested by
Administrative Agent in connection with such increases. Any
request under this subsection 2.1A(v) shall be submitted by
Company to Administrative Agent (which shall forward copies to
Lenders), specify the proposed effective date and amount of such
increase and be accompanied by an Officer's Certificate stating
that no Event of Default or Potential Event of Default exists or
will occur as a result of such increase. Company may also specify
any fees offered to those Lenders (the "Increasing Lenders")
which agree to increase the principal amount of their Revolving
Loan Commitments, which fees may be variable based upon the
amount by which any such Lender is willing to increase the
principal amount of its Revolving Loan Commitment. No Lender
shall have any obligation, express or implied, to offer to
increase the aggregate principal amount of its Revolving Loan
Commitment. Only the consent of each Increasing Lender and
Administrative Agent shall be required for an increase in the
aggregate principal amount of Revolving Loan Commitments pursuant
to this subsection 2.1A(v). No Lender which elects not to
increase the principal amount of its
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Revolving Loan Commitment may be replaced in respect of its
existing Revolving Loan Commitment as a result thereof without
such Lender's consent.
Each Increasing Lender shall as soon as practicable specify
the amount of the proposed increase which it is willing to assume. Company
may accept some or all of the offered amounts or designate new lenders who
qualify as Eligible Assignees and which are reasonably acceptable to
Administrative Agent as additional Lenders hereunder in accordance with
this subsection 2.1A(v) (each such new lender being a "NEW LENDER"), which
New Lender may assume all or a portion of the increase in the aggregate
principal amount of the Revolving Loan Commitments. Company and
Administrative Agent shall have discretion jointly to adjust the
allocation of the increased aggregate principal amount of Revolving Loan
Commitments, among Increasing Lenders and New Lenders.
Each New Lender designated by Company and reasonably
acceptable to Administrative Agent shall become an additional party hereto
as a New Lender concurrently with the effectiveness of the proposed
increase in the aggregate principal amount of the Revolving Loan
Commitments, upon its execution of an Agreement of Joinder in the form of
EXHIBIT XIV (and, in each case, otherwise in form and substance reasonably
satisfactory to Administrative Agent).
Subject to the foregoing, any increase requested by Company
shall be effective as of the date proposed by Company and shall be in the
principal amount equal to (i) the principal amount which Increasing
Lenders are willing to assume as increases to the principal amount of
their Revolving Loan Commitments, PLUS (ii) the principal amount offered
by New Lenders with respect to Revolving Loan Commitments, in either case
as adjusted by Company and Administrative Agent pursuant to this
subsection 2.1A(v). Upon effectiveness of any such increase, the Pro Rata
Share of each Lender will be adjusted to give effect to the increase in
Revolving Loan Commitments, Administrative Agent shall distribute to
Lenders a revised SCHEDULE 2.1 reflecting the Revolving Loan Commitment
and Pro Rata Share of each Lender after giving effect to such increase. To
the extent that the adjustment of Pro Rata Shares results in loss or
expenses to any Lender as a result of the prepayment of any Adjusted LIBO
Rate Loan on a date other than the scheduled last day of the applicable
Interest Period, Company shall be responsible for such loss or expense
pursuant to subsection 2.6D.
o BORROWING MECHANICS. Loans made on any Funding Date as Base Rate
Loans (other than Revolving Loans made pursuant to a request by
Swing Line Lender pursuant to subsection 2.1A(iii) for the
purpose of repaying any Refunded Swing Line Loans or Revolving
Loans made pursuant to subsection 3.3B for the purpose of
reimbursing any Issuing Lender for the amount of a drawing under
a Letter of Credit issued by it) shall be in an aggregate minimum
amount of $1 million and multiples of $50,000 in excess of that
amount and Loans made on any Funding Date as LIBO Rate Loans with
a particular Interest Period shall be in an aggregate minimum
amount of $3 million and multiples of $500,000 in excess of that
amount. Swing Line
41
Loans made on any Funding Date shall be in an aggregate minimum
amount of $200,000 and multiples of $50,000 in excess of that
amount. Whenever Company desires that Lenders make Loans it shall
deliver to Administrative Agent a Notice of Borrowing no later
than 12:00 Noon (New York City time) at least three Business Days
in advance of the proposed Funding Date (in the case of a LIBO
Rate Loan) or at least one Business Day in advance of the
proposed Funding Date (in the case of a Base Rate Loan). Whenever
Company desires that Swing Line Lender make a Swing Line Loan, it
shall deliver to Administrative Agent a Notice of Borrowing no
later than 1:00 P.M. (New York City time) on the proposed Funding
Date. The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount and
type of Loans requested, (iii) in the case of Swing Line Loans,
that such Loans shall be Base Rate Loans, (iv) whether such Loans
shall be Base Rate Loans or LIBO Rate Loans, and (v) in the case
of any Loans requested to be made as LIBO Rate Loans, the initial
Interest Period requested therefor. Term Loans and Revolving
Loans may be continued as or converted into Base Rate Loans and
LIBO Rate Loans in the manner provided in subsection 2.2D. In
lieu of delivering the above-described Notice of Borrowing,
Company may give Administrative Agent telephonic notice by the
required time of any proposed borrowing under this subsection
2.1B; provided that such notice shall be confirmed in writing by
delivery of a Notice of Borrowing to Administrative Agent on the
date of such telephonic notice.
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to borrow on behalf of Company or
for otherwise acting in good faith under this subsection 2.1B, and upon funding
of Loans by Lenders in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected Loans hereunder.
Company shall notify Administrative Agent prior to the funding of
any Loans in the event that any of the matters to which Company is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Company of the proceeds of
any Loans shall constitute a re-certification by Company, as of the applicable
Funding Date, as to the matters to which Company is required to certify in the
applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Borrowing for a LIBO Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.
o DISBURSEMENT OF FUNDS. All Loans (other than Swing Line Loans)
under this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares of the
Tranche A Term Loan Commitment, Tranche B Term Loan Commitment
and the Revolving Loan Commitment, as
42
the case may be, it being understood that no Lender shall be
responsible for any default by any other Lender in that other
Lender's obligation to make a Loan requested hereunder nor shall
the Commitment of any Lender to make the particular type of Loan
requested be increased or decreased as a result of a default by
any other Lender in that other Lender's obligation to make a Loan
requested hereunder. Promptly after receipt by Administrative
Agent of a Notice of Borrowing pursuant to subsection 2.1B (or
telephonic notice in lieu thereof), Administrative Agent shall
notify each Lender or Swing Line Lender, as the case may be, of
the proposed borrowing. Each Lender shall make the amount of its
Loan available to Administrative Agent not later than 1:00 P.M.
(New York City time) on the applicable Funding Date, and Swing
Line Lender shall make the amount of its Swing Line Loan
available to Administrative Agent not later than 2:00 P.M. (New
York City time) on the applicable Funding Date, in each case in
same day funds in Dollars, at the Funding and Payment Office.
Except as provided in subsection 2.1A(iii) or subsection 3.3B
with respect to Revolving Loans used to repay Refunded Swing Line
Loans or to reimburse any Issuing Lender for the amount of a
drawing under a Letter of Credit issued by it, upon satisfaction
or waiver of the conditions precedent specified in subsections
4.1 (in the case of Loans made on the Closing Date), 4.2 (in the
case of all Loans) and 4.3 (in the case of the issuance of any
Letter of Credit), Administrative Agent shall make the proceeds
of such Loans available to Company on the applicable Funding Date
by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Administrative Agent from
Lenders or Swing Line Lender, as the case may be, to be credited
to the account of Company at the Funding and Payment Office.
Unless Administrative Agent shall have been notified in writing by
any Lender prior to the Funding Date for any Loans that such Lender does not
intend to make available to Administrative Agent the amount of such Lender's
Loan requested on such Funding Date, Administrative Agent may assume that such
Lender has made such amount available to Administrative Agent on such Funding
Date and Administrative Agent may, in its sole discretion, but shall not be
obligated to, make available to Company a corresponding amount on such Funding
Date. If such corresponding amount is not in fact made available to
Administrative Agent by such Lender, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from such Funding Date until the date such amount
is paid to Administrative Agent, at the Federal Funds Effective Rate for three
Business Days and thereafter at the Base Rate. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand therefor,
Administrative Agent shall promptly notify Company and Company shall immediately
pay such corresponding amount to Administrative Agent together with interest
thereon, for each day from such Funding Date until the date such amount is paid
to Administrative Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Company may have against any Lender as a result of any default by
such Lender hereunder.
43
o THE REGISTER.
o Administrative Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the names
and addresses of Lenders and the Commitments and Loans of each
Lender from time to time (the "REGISTER"). The Register shall be
available for inspection by Company or any Lender at any
reasonable time and from time to time upon reasonable prior
notice. Upon the Company's written request, the Administrative
Agent shall provide the Company with a copy of the Register.
o Administrative Agent shall record in the Register the Tranche A
Term Loan Commitment, the Trance B Term Loan Commitment and the
Revolving Loan Commitment, and the Tranche A Term Loan, the
Tranche B Term Loan and the Revolving Loans from time to time of
each Lender, the Swing Line Loan Commitment and the Swing Line
Loans from time to time of Swing Line Lender, and each repayment
or prepayment in respect of the principal amount of the Tranche A
Term Loan, the Tranche B Term Loan or the Revolving Loans of each
Lender or the Swing Line Loans of Swing Line Lender. Any such
recordation shall be conclusive and binding on Company and each
Lender, absent manifest error; PROVIDED that failure to make any
such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Company's Obligations in
respect of any applicable Loans.
o Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of
the Tranche A Term Loan, the Tranche B Term Loan and each
Revolving Loan made by it and each payment in respect thereof.
Any such recordation shall be conclusive and binding on Company,
absent manifest error; PROVIDED that failure to make any such
recordation, or any error in such recordation, shall not affect
any Lender's Commitments or Company's Obligations in respect of
any applicable Loans; and PROVIDED FURTHER that in the event of
any inconsistency between the Register and any Lender's records,
the recordations in the Register shall govern.
o Company, Administrative Agent and Lenders shall deem and treat
the Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein
for all purposes hereof, and no assignment or transfer of any
such Commitment or Loan shall be effective, in each case unless
and until an Assignment Agreement effecting the assignment or
transfer thereof shall have been accepted by Administrative Agent
and recorded in the Register as provided in subsection 10.1B(ii).
Prior to such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender listed
in the Register as the owner thereof, and any request, authority
or consent of any Person who, at the time of making such request
or giving such authority or consent, is listed in the Register as
a Lender shall be conclusive and binding on any subsequent
holder, assignee or transferee of the corresponding Commitments
or Loans.
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Company hereby designates Administrative Agent to serve as
Company's agent solely for purposes of maintaining the Register
as provided in this subsection 2.1D, and Company hereby agrees
that, to the extent Administrative Agent serves in such capacity,
Administrative Agent and its officers, directors and employees
shall constitute Indemnitees for all purposes under subsection
10.3.
o EVIDENCE OF DEBT.
(i) The Register maintained by the Administrative Agent pursuant to
Section 2.1D shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the
date, amount and tenor, as applicable, of each Loan, the type of Loan and
the Interest Period (if any) applicable thereto, (ii) the terms of each
Assignment Agreement delivered to and accepted by it, (iii) the amount of
any principal or interest due and payable or to become due and payable
from the Company to each Lender hereunder, and (iv) the amount of any sum
received by the Administrative Agent from the Company hereunder and each
Lender's share thereof.
o The entries made in the Register shall be conclusive and binding
for all purposes, absent manifest error.
o If, in the opinion of any Lender, a promissory note or other
evidence of debt is required, appropriate or desirable to reflect
or enforce the indebtedness of the Company resulting from a
Tranche A Loan, a Tranche B Loan, a Revolving Loan or a Swing
Line Loan made, or to be made, by such Lender to the Company,
then, upon written request of such Lender, the Company shall
promptly execute and deliver to such Lender a promissory note
substantially in the form of EXHIBIT IV-A in the case of Tranche
A Loans, EXHIBIT IV-B in the case of Tranche B Loans, EXHIBIT
IV-C in the case of Revolving Loans and EXHIBIT IV-D in the case
of Swing Line Loans, payable to the order of such Lender in an
amount up to the maximum amount of Tranche A Loans, Tranche B
Loans, Revolving Loans or Swing Line Loans, as the case may be,
payable or to be payable by Company to such Lender from time to
time hereunder.
o Administrative Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until an
Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by Administrative Agent as provided in
subsection 10.1B(ii). Any request, authority or consent of any
person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall
be conclusive and binding on any subsequent holder, assignee or
transferee of that Note or of any Note or Notes issued in
exchange therefor.
o SPECIAL PROVISIONS GOVERNING FOREIGN CURRENCY LETTERS OF Credit.
Notwithstanding any other provision of this Agreement to the
contrary, the
45
following provisions shall govern with respect to Letters of
Credit denominated in a currency other than Dollars, in each case
as to the matters covered:
(ii) CALCULATION OF DOLLAR EQUIVALENT AMOUNT OF FOREIGN CURRENCY
LETTERS OF CREDIT. For purposes of determining (1) whether the Total
Utilization of Commitments exceeds the Revolving Loan Commitments then in
effect or (2) the Letter of Credit Usage, Administrative Agent shall
determine the Dollar Equivalent amounts with respect to any Letters of
Credit denominated in a currency other than Dollars (a) on the first
Business Day following each monthly anniversary of the issuance of such
Letter of Credit, and (b) at such other dates as Administrative Agent may
reasonably require (each such date under clauses (a) and (b) being a
"COMPUTATION DATE"). Administrative Agent shall determine the Dollar
Equivalent amount for a particular Letter of Credit at the time a Request
for Issuance of Letter of Credit is given with respect to such Letter of
Credit.
o EUROPEAN MONETARY UNION. The European Monetary Union (the
"European Monetary Union") anticipates the introduction of a
single currency and the substitution of such currency for the
national currencies of the member states participating in the
European Monetary Union. On the date on which any currency under
which a Letter of Credit is issued is replaced by such single
currency, the conversion of any outstanding Letters of Credit
denominated in such foreign currency into such single currency
shall take effect; PROVIDED that the original foreign currency
shall be retained for so long as legally permissible; PROVIDED
FURTHER that any such conversion shall be based on the rate of
conversion officially fixed by the European Monetary Union on the
date such single currency replaces the applicable foreign
currency. Notwithstanding anything contained herein to the
contrary, none of the introduction of such single currency, the
rate of conversion or any economic consequences that arise from
any of the aforementioned events or otherwise in connection with
the European Monetary Union shall give rise to any right to
terminate prematurely, contest, cancel, rescind, modify or
renegotiate this Agreement or any of its provisions or to raise
any other objections and/or exceptions or to assert any claim for
compensation.
(iii) LIMITATION TO PERMITTED CURRENCIES. Letters of Credit issued
in a currency other than Dollars shall only be issued in a Permitted
Currency.
o INTEREST ON THE LOANS.
o RATE OF INTEREST. Subject to the provisions of subsections 2.6
and 2.7, each Loan shall bear interest on the unpaid principal
amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to
the Base Rate or the Adjusted LIBO Rate. Subject to the
provisions of subsection 2.7, each Swing Line Loan shall bear
interest on the unpaid principal amount thereof from the date
made through maturity (whether by acceleration or otherwise) at a
rate determined by reference to the Base Rate. The applicable
basis for determining the rate of interest with
46
respect to any Loan shall be selected by Company initially at the
time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B, and the basis for determining the
interest rate with respect to any Loan may be changed from time
to time pursuant to subsection 2.2D. If on any day a Loan is
outstanding with respect to which notice has not been delivered
to Administrative Agent in accordance with the terms of this
Agreement specifying the applicable basis for determining the
rate of interest, then for that day that Loan shall bear interest
determined by reference to the Base Rate.
o Subject to the provisions of subsections 2.2E and 2.7, the
Tranche A Term Loans, the Tranche B Term Loans and the Revolving
Loans shall bear interest through maturity as follows:
o if a Base Rate Loan, then at the sum of the Base Rate PLUS the
Applicable Base Rate Margin or
o if a LIBO Rate Loan, then at the sum of the Adjusted LIBO Rate
PLUS the Applicable LIBO Rate Margin.
o Subject to the provisions of subsections 2.2E and 2.7, the Swing
Line Loans shall bear interest through maturity at the sum of the
Base Rate PLUS the Applicable Base Rate Margin for Revolving
Loans MINUS the Commitment Fee Percentage.
Upon delivery of a Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(xviii), each of the Applicable
Base Rate Margin and the Applicable LIBO Rate Margin shall automatically be
adjusted in accordance with such Margin Determination Certificate, such
adjustment to become effective on the next succeeding Business Day following the
receipt by Administrative Agent of such Margin Determination Certificate;
PROVIDED that if at any time a Margin Determination Certificate is not delivered
at the time required pursuant to subsection 6.1(xviii), the highest Applicable
Base Rate Margin or Applicable LIBO Rate Margin, as the case may be, shall be
applicable from such time until delivery of such Margin Determination
Certificate; PROVIDED FURTHER that if a Margin Determination Certificate
erroneously indicates an applicable margin more favorable to Company than should
be afforded by the actual calculation of the Consolidated Leverage Ratio,
Company shall promptly pay additional interest, letter of credit fees and all
other applicable fees or commitment fees, as the case may be, to correct such
error.
o INTEREST PERIODS. In connection with each LIBO Rate Loan,
Company may, pursuant to the applicable Notice of Borrowing or
Notice of Conversion/Continuation, as the case may be, select an
interest period (each an "INTEREST PERIOD") to be applicable to
such Loan, which Interest Period shall be, at Company's option,
either a one, two, three or six month period; PROVIDED that:
o the initial Interest Period for any LIBO Rate Loan shall commence
on the Funding Date in respect of such Loan, in the case of a
Loan initially made as a
47
LIBO Rate Loan, or on the date specified in the applicable Notice
of Conversion/Continuation, in the case of a Loan converted to a
LIBO Rate Loan;
o in the case of immediately successive Interest Periods applicable
to a LIBO Rate Loan continued as such pursuant to a Notice of
Conversion/ Continuation, each successive Interest Period shall
commence on the day on which the next preceding Interest Period
expires;
o if an Interest Period would otherwise expire on a day that is not
a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is
a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next
preceding Business Day;
o any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (v) of this subsection
2.2B, end on the last Business Day of a calendar month;
o no Interest Period with respect to any portion of the Tranche A
Term Loans shall extend beyond July 31, 2006, no Interest Period
with respect to any portion of the Tranche B Term Loans shall
extend beyond July 31, 2007 and no Interest Period with respect
to any portion of the Revolving Loans shall extend beyond the
Revolving Loan Commitment Termination Date;
o no Interest Period with respect to any portion of the Tranche A
Term Loans shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Tranche
A Term Loans unless the sum of (a) the aggregate principal amount
of Tranche A Term Loans that are Base Rate Loans PLUS (b) the
aggregate principal amount of Tranche A Term Loans that are LIBO
Rate Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount required to be paid on the
Tranche A Term Loans on such date;
o no Interest Period with respect to any portion of the Tranche B
Term Loans shall extend beyond a date on which Company is
required to make a scheduled payment of principal of the Tranche
B Term Loans unless the sum of (a) the aggregate principal amount
of Tranche B Term Loans that are Base Rate Loans PLUS (b) the
aggregate principal amount of Tranche B Term Loans that are LIBO
Rate Loans with Interest Periods expiring on or before such date
equals or exceeds the principal amount required to be paid on the
Tranche B Term Loans on such date;
o there shall be no more than ten Interest Periods outstanding at
any time; and
48
o in the event Company fails to specify an Interest Period for any
LIBO Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, Company shall be deemed to have selected
an Interest Period of one month.
o INTEREST PAYMENTS. Subject to the provisions of subsection 2.2E,
interest on each Loan shall be payable in arrears on and to each
Interest Payment Date applicable to that Loan, upon any
prepayment of that Loan (to the extent accrued on the amount
being prepaid) and at maturity (including final maturity);
PROVIDED that in the event any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to subsection
2.4B(i), interest accrued on such Swing Line Loans or Revolving
Loans through the date of such prepayment shall be payable on the
next succeeding Interest Payment Date applicable to Base Rate
Loans (or, if earlier, at final maturity).
o CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option to convert at any
time all or any part of its outstanding Loans equal to $3 million
and multiples of $500,000 in excess of that amount from Loans
bearing interest at a rate determined by reference to one basis
to Loans bearing interest at a rate determined by reference to an
alternative basis or (ii) upon the expiration of any Interest
Period applicable to a LIBO Rate Loan, to continue all or any
portion of such Loan equal to $3 million and multiples of
$500,000 in excess of that amount as a LIBO Rate Loan; PROVIDED,
HOWEVER, that (i) a LIBO Rate Loan may only be converted into a
Base Rate Loan on the expiration date of an Interest Period
applicable thereto.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a LIBO Rate Loan). A Notice of Conversion/Continuation shall
specify (i) the proposed conversion/continuation date (which shall be a Business
Day), (ii) the amount and type of the Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a conversion
to, or a continuation of, a LIBO Rate Loan, the requested Interest Period, and
(v) in the case of a conversion to, or a continuation of, a LIBO Rate Loan, that
no Potential Event of Default or Event of Default has occurred and is
continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Company may give Administrative Agent telephonic notice
by the required time of any proposed conversion/continuation under this
subsection 2.2D; PROVIDED that such notice shall be promptly confirmed in
writing by delivery of a Notice of Conversion/ Continuation to Administrative
Agent on or before the proposed conversion/continuation date. Upon receipt of
written or telephonic notice of any proposed conversion/continuation under this
subsection 2.2D, Administrative Agent shall promptly transmit such notice by
telefacsimile or telephone to each Lender.
49
Neither Administrative Agent nor any Lender shall incur any
liability to Company in acting upon any telephonic notice referred to above that
Administrative Agent believes in good faith to have been given by a duly
authorized officer or other person authorized to act on behalf of Company or for
otherwise acting in good faith under this subsection 2.2D, and upon conversion
or continuation of the applicable basis for determining the interest rate with
respect to any Loans in accordance with this Agreement pursuant to any such
telephonic notice Company shall have effected a conversion or continuation, as
the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a
Notice of Conversion/Continuation for conversion to, or continuation of, a LIBO
Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Company shall be bound
to effect a conversion or continuation in accordance therewith.
o DEFAULT RATE. Upon the occurrence and during the continuation
of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any
interest payments thereon not paid when due and any fees and
other amounts then due and payable hereunder, shall thereafter
bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2.00% per annum in excess
of the interest rate otherwise payable under this Agreement with
respect to the applicable Loans (or, in the case of any such fees
and other amounts, at a rate which is 2.00% per annum plus the
interest rate otherwise payable under this Agreement for Base
Rate Loans which are Tranche A Term Loans, Tranche B Term Loans
or Revolving Loans, as applicable); PROVIDED that, in the case of
LIBO Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is
effective such LIBO Rate Loans shall thereupon become Base Rate
Loans and shall thereafter bear interest payable upon demand at a
rate which is 2.00% per annum plus the interest rate otherwise
payable under this Agreement for Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in
this subsection 2.2E is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default
or otherwise prejudice or limit any rights or remedies of any
Agent or any Lender.
o COMPUTATION OF INTEREST. Interest on the Loans shall be computed
on the basis of a 360-day year, in each case for the actual
number of days elapsed in the period during which it accrues. In
computing interest on any Loan, the date of the making of such
Loan or the first day of an Interest Period applicable to such
Loan or, with respect to a Base Rate Loan being converted from a
LIBO Rate Loan, the date of conversion of such LIBO Rate Loan to
such Base Rate Loan, as the case may be, shall be included, and
the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a
Base Rate Loan being converted to a LIBO Rate Loan, the date of
conversion of such Base Rate Loan to such LIBO Rate Loan, as the
50
case may be, shall be excluded; provided that if a Loan is repaid
on the same day on which it is made, one day's interest shall be
paid on that Loan.
o FEES.
o COMMITMENT FEES. Company agrees to pay to Administrative Agent,
for distribution to each Revolving Lender in proportion to that
Lender's Pro Rata Share of the Revolving Loan Commitments,
commitment fees for the period from and including the Closing
Date to and excluding the Revolving Loan Commitment Termination
Date or earlier date of termination of the Revolving Loan
Commitments equal to (x) the average of the daily excess of the
Revolving Loan Commitments over the Total Utilization of
Revolving Loan Commitments (but not including any outstanding
Swing Line Loans) MULTIPLIED BY (y) the applicable Commitment Fee
Percentage, such commitment fees to be calculated on the basis of
a 360-day year and the actual number of days elapsed and to be
payable quarterly in arrears on the last Business Day of each
March, June, September and December of each year, commencing on
the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date or earlier date of
termination of the Revolving Loan Commitments.
Upon delivery of a Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(xviii), the Commitment Fee
Percentage shall automatically be adjusted in accordance with such Margin
Determination Certificate, such adjustment to become effective on the next
succeeding Business Day following the receipt by Administrative Agent of such
Margin Determination Certificate; PROVIDED that if at any time a Margin
Determination Certificate is not delivered at the time required pursuant to
subsection 6.1(xviii), the highest Commitment Fee Percentage shall be applicable
from such time until delivery of such Margin Determination Certificate; PROVIDED
FURTHER that if a Margin Determination Certificate erroneously indicates a
Commitment Fee Percentage more favorable to Company than should be afforded by
the actual calculation of the Consolidated Leverage Ratio, Company shall
promptly pay additional commitment fees to correct such error.
o OTHER FEES. Company agrees to pay to Arranger and Administrative
Agent such other fees in the amounts and at the times separately
agreed upon between Company, Arranger and Administrative Agent
(including that certain letter agreement dated May 18, 2000
relating to fees for the Commitments and Loans made hereunder).
o TRANCHE B TERM LOAN PREPAYMENT FEES. Voluntary payments or
prepayments of Tranche B Term Loans made on or before the second
anniversary of the Closing Date shall be accompanied by payment
of a prepayment fee as follows:
o if such voluntary payment or prepayment is made on or before the
first anniversary of the Closing Date, a fee equal to 2% of the
amount of such voluntary payment or prepayment; and
51
o if such voluntary payment or prepayment is made after the first
anniversary of the Closing Date but on or before the second
anniversary of the Closing Date, a fee equal to 1% of the amount
of such voluntary payment or prepayment.
o REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS.
o Scheduled Payments of Term Loans.
o Company shall make principal payments on the Tranche A Term Loans
on each of the following dates in the aggregate amount set forth
opposite such date in the table set forth below:
-------------------------------------------------------------
Scheduled Repayment Date Scheduled Repayment
of Tranche A Term Loans
-------------------------------------------------------------
December 31, 2000 $750,000.00
March 31, 2001 $750,000.00
June 30, 2001 $750,000.00
September 30, 2001 $750,000.00
December 31, 2001 $1,500,000.00
March 31, 2002 $1,500,000.00
June 30, 2002 $1,500,000.00
September 30, 2002 $1,500,000.00
December 31, 2002 $2,250,000.00
March 31, 2003 $2,250,000.00
June 30, 2003 $2,250,000.00
September 30, 2003 $2,250,000.00
December 31, 2003 $3,000,000.00
March 31, 2004 $3,000,000.00
June 30, 2004 $3,000,000.00
September 30, 2004 $3,000,000.00
December 31, 2004 $3,750,000.00
March 31, 2005 $3,750,000.00
June 30, 2005 $3,750,000.00
September 30, 2005 $3,750,000.00
December 31, 2005 $3,750,000.00
March 31, 2006 $3,750,000.00
June 30, 2006 $3,750,000.00
September 30, 2006 $3,750,000.00
-----------------------------
Total $60,000,000.00
; PROVIDED that the scheduled installments of principal of the Tranche A
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche A Term Loans in
accordance with subsection 2.4B(iv); and PROVIDED FURTHER that the Tranche
A Term Loans and all other amounts owed hereunder with respect to the
Tranche A Term Loans shall be paid in full no later than September 30,
2006, and the final installment payable by Company in respect of the
Tranche A Term
52
Loans on such date shall be in an amount, if such amount is different from
that specified above, sufficient to repay all amounts owing by Company
under this Agreement with respect to the Tranche A Term Loans.
o Company shall make principal payments on the Tranche B Term Loans
on each of the following dates in the aggregate amount set forth
opposite such date in the table set forth below:
-------------------------------------------------------------
Scheduled Repayment Date Scheduled Repayment of
Tranche B Term Loans
-------------------------------------------------------------
December 31, 2000 $550,000.00
March 31, 2001 $550,000.00
June 30, 2001 $550,000.00
September 30, 2001 $550,000.00
December 31, 2001 $550,000.00
March 31, 2002 $550,000.00
June 30, 2002 $550,000.00
September 30, 2002 $550,000.00
December 31, 2002 $550,000.00
March 31, 2003 $550,000.00
June 30, 2003 $550,000.00
September 30, 2003 $550,000.00
December 31, 2003 $550,000.00
March 31, 2004 $550,000.00
June 30, 2004 $550,000.00
September 30, 2004 $550,000.00
December 31, 2004 $550,000.00
March 31, 2005 $550,000.00
June 30, 2005 $550,000.00
September 30, 2005 $550,000.00
December 31, 2005 $550,000.00
March 31, 2006 $550,000.00
June 30, 2006 $550,000.00
September 30, 2006 $550,000.00
December 31, 2006 $51,700,000.00
March 31, 2007 $51,700,000.00
June 30, 2007 $51,700,000.00
September 30, 2007 $51,700,000.00
------------------------------
Total $220,000,000.00
; PROVIDED that the scheduled installments of principal of the Tranche B
Term Loans set forth above shall be reduced in connection with any
voluntary or mandatory prepayments of the Tranche B Term Loans in
accordance with subsection 2.4B(iv); and PROVIDED FURTHER that the Tranche
B Term Loans and all other amounts owed hereunder with respect to the
Tranche B Term Loans shall be paid in full no later September 30, 2007,
and the final installment payable by Company in respect of the Tranche B
Term Loans on such date shall be in an amount, if such amount is different
from that specified above, sufficient to repay all amounts owing by
Company under this Agreement with respect to the Tranche B Term Loans.
53
o Prepayments of Loans and Unscheduled Reductions in Revolving Loan
Commitments.
o VOLUNTARY PREPAYMENTS.
o Company may, upon written or telephonic notice to Administrative
Agent on or prior to 12:00 Noon (New York City time) on the date
of prepayment, which notice, if telephonic, shall be promptly
confirmed in writing, at any time and from time to time prepay,
without premium or penalty, any Swing Line Loan on any Business
Day in whole or in part in an aggregate minimum amount of
$100,000 and multiples of $50,000 in excess of that amount.
Subject to subsection 2.3C, Company may, upon not less than one
Business Day's prior written or telephonic notice, in the case of
Base Rate Loans, and three Business Days' prior written or
telephonic notice, in the case of LIBO Rate Loans, in each case
given to Administrative Agent by 12:00 Noon (New York City time)
on the date required and, if given by telephone, promptly
confirmed in writing to Administrative Agent (which original
written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay, without premium or penalty,
any Loans on any Business Day in whole or in part in an aggregate
minimum amount of $500,000 and multiples of $50,000 in excess of
that amount; PROVIDED, HOWEVER, that a LIBO Rate Loan may only be
prepaid on the expiration of the Interest Period applicable
thereto unless Company complies with subsection 2.6D with respect
to any breakage costs resulting from such prepayment being made
on a date prior to the expiration of the applicable Interest
Period. Notice of prepayment having been given as aforesaid, the
principal amount of the Loans specified in such notice shall
become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in
subsection 2.4B(iv).
o In the event Company is entitled to replace a non-consenting
Lender pursuant to subsection 10.6B, Company shall have the
right, upon five Business Days' written notice to Administrative
Agent (which notice Administrative Agent shall promptly transmit
to each of the Lenders), to prepay all Loans, together with
accrued and unpaid interest, fees and other amounts owing to such
Lender (including without limitation amounts owing to such Lender
pursuant to subsection 2.6D and subsection 2.3C) in accordance
with subsection 10.6B so long as (1) in the case of the
prepayment of the Revolving Loans of any Lender pursuant to this
subsection 2.4B(i)(b), the Revolving Loan Commitment of such
Lender is terminated concurrently with such prepayment pursuant
to subsection 2.4B(ii)(b) (at which time SCHEDULE 2.1 shall be
deemed modified to reflect the changed Revolving Loan
Commitments), and (2) in the case of the prepayment of the Loans
of any Lender, the consents required by subsection 10.6B in
connection with the prepayment pursuant to this subsection
2.4B(i)(b) shall have been obtained, and at such time, such
Lender shall no longer constitute a "Lender" for purposes of this
Agreement,
54
except with respect to indemnifications under this Agreement
(including, without limitation, subsections 2.6D, 2.7, 3.6, 10.2
and 10.3), which shall survive as to such Lender.
o VOLUNTARY REDUCTIONS OF LOAN COMMITMENTS.
o Company may, upon not less than three Business Days' prior
written or telephonic notice confirmed in writing to
Administrative Agent (which original written or telephonic notice
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Revolving Lender), at any time and from time to
time terminate in whole or permanently reduce in part, without
premium or penalty, the Revolving Loan Commitments in an amount
up to the amount by which the Revolving Loan Commitments exceed
the Total Utilization of Revolving Loan Commitments at the time
of such proposed termination or reduction; PROVIDED that any such
partial reduction shall be in an aggregate minimum amount of
$500,000 and multiples of $100,000 in excess of that amount.
Company's notice to Administrative Agent shall designate the date
(which shall be a Business Day) of such termination or reduction
and the amount of any partial reduction, and such termination or
reduction of the Revolving Loan Commitments shall be effective on
the date specified in Company's notice and shall reduce the
Revolving Loan Commitment of each Revolving Lender
proportionately to its Pro Rata Share.
o In the event Company is entitled to replace a non-consenting
Lender pursuant to subsection 10.6B, Company shall have the
right, upon five Business Days' written notice to Administrative
Agent (which notice Administrative Agent shall promptly transmit
to each of the Lenders), to terminate the entire Revolving Loan
Commitment of such Lender so long as (1) all Loans, together with
accrued and unpaid interest, fees and other amounts owing to such
Lender are repaid, including without limitation amounts owing to
such Lender pursuant to subsection 2.6D, pursuant to subsection
2.4B(i)(b) concurrently with the effectiveness of such
termination (at which time SCHEDULE 2.1 shall be deemed modified
to reflect such changed amounts), and (2) the consents required
by subsection 10.6B in connection with the prepayment pursuant to
subsection 2.4B(i)(b) shall have been obtained, and at such time,
such Lender shall no longer constitute a "Lender" for purposes of
this Agreement, except with respect to indemnifications under
this Agreement (including, without limitation, subsections 2.6D,
2.7, 3.6, 10.2 and 10.3), which shall survive as to such Lender.
o MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF LOAN
COMMITMENTS. The Loans shall be prepaid and/or the Revolving Loan
Commitments shall be permanently reduced in the amounts and under
the circumstances set forth below, all such prepayments and/or
reductions to be applied as set forth below or as more
specifically provided in subsection 2.4B(iv):
55
o PREPAYMENTS AND REDUCTIONS FROM NET ASSET SALE PROCEEDS. No later
than the first Business Day following the date of receipt by
Company or any of its Subsidiaries of any Net Asset Sale Proceeds
in respect of any Asset Sale, Company shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 100% of such Net Asset
Sale Proceeds MINUS, except as provided in subsection 7.9, any
such Net Asset Sale Proceeds (the "PROPOSED ASSET SALE
REINVESTMENT PROCEEDS") that Company or any Subsidiary intends to
use within 360 days of such date of receipt to acquire any asset
used or useful to the Company or such Subsidiary in conducting
its business; PROVIDED that Company shall have delivered to
Administrative Agent, on or before such first Business Day, an
Officer's Certificate setting forth the proposed use of the
Proposed Asset Sale Reinvestment Proceeds and such other
information with respect to such proposed use as Administrative
Agent may reasonably request. In addition, no later than 360 days
after receipt of any Net Asset Sale Proceeds, Company shall
prepay the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an amount equal to the amount of any
related Proposed Asset Sale Reinvestment Proceeds that have not
been applied to the purchase of an asset by Company or such
Subsidiary as provided above; PROVIDED FURTHER that the aggregate
amount of any such Proposed Asset Sale Reinvestment Proceeds so
reinvested in the business of Company or any Subsidiary shall not
exceed $20 million for any Fiscal Year.
If, following the receipt by Company or any of its
Subsidiaries of any Net Asset Sale Proceeds, Company is required to
apply or cause to be applied any portion of such Net Asset Sale
Proceeds to prepay any Indebtedness evidenced by any of the Related
Agreements pursuant to the applicable Related Agreement, then,
notwithstanding anything contained in this subsection 2.4B(iii)(a),
Company shall prepay the Loans and/or reduce the Revolving Loan
Commitments as set forth in this subsection 2.4B(iii)(a) so as to
eliminate any obligation to prepay such Indebtedness.
o PREPAYMENTS AND REDUCTIONS FROM NET INSURANCE/CONDEMNATION
PROCEEDS. No later than the fifth Business Day following the date
of receipt by Administrative Agent or by Company or any of its
Subsidiaries of any Net Insurance/Condemnation Proceeds, Company
shall, or shall instruct the Administrative Agent to, prepay the
Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 100% of the amount of
such Net Insurance/Condemnation Proceeds MINUS any such Net
Insurance/Condemnation Proceeds (the "PROPOSED REINVESTMENT
PROCEEDS") that Company or such Subsidiary intends to use within
360 days of such date of receipt to pay or reimburse the costs of
repairing, restoring or replacing the assets in respect of which
such Net Insurance/Condemnation Proceeds were received; PROVIDED
that Company shall have delivered to Administrative Agent, on or
before such first Business Day, an Officer's Certificate setting
forth the proposed use of the Proposed Reinvestment Proceeds and
such other information with respect to such
56
proposed use as Administrative Agent may reasonably request. In
addition, no later than 360 days after receipt of any Net
Insurance/Condemnation Proceeds, Company shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently
reduced in an amount equal to the amount of any related Proposed
Reinvestment Proceeds that have not been applied to the costs of
repairing, restoring or replacing the applicable assets of
Company or such Subsidiary as provided above; PROVIDED FURTHER
that the aggregate amount of any such Proposed Reinvestment
Proceeds so applied to such repair, restoration or replacement
shall not exceed $35 million for any Fiscal Year.
o PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE OF EQUITY SECURITIES.
No later than the first Business Day following receipt by Company
or any of its Subsidiaries of the Cash proceeds (any such Cash
proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "NET EQUITY SECURITIES
PROCEEDS"), from the issuance of equity Securities of Company
(other than proceeds from (i) the Convertible Preferred Stock and
(ii) common equity Securities (including options, warrants or
other convertible equity securities) of Company issued to
officers, employees, directors, consultants and certain other
qualified persons of Company and its Subsidiaries pursuant to
option plans or other similar plans or agreements adopted by
Company's Board of Directors), Company shall prepay the Loans
and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 50% of such Net Equity
Securities Proceeds.
o PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE OF DEBT SECURITIES. No
later than the first Business Day following receipt by Company or
any of its Subsidiaries of the Cash proceeds (any such Cash
proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including
reasonable legal fees and expenses, being "NET DEBT SECURITIES
PROCEEDS"), from the issuance of debt Securities of Company or
any of its Subsidiaries after the Closing Date (including the Net
Debt Securities Proceeds of Indebtedness permitted under
subsection 7.1(x) but excluding the Net Debt Securities Proceeds
of Indebtedness permitted under subsection 7.1 as in effect on
the Closing Date (other than subsection 7.1(x)), Company shall
prepay the Loans and/or the Revolving Loan Commitments shall be
permanently reduced in an aggregate amount equal to 100% of such
Net Debt Securities Proceeds.
o PREPAYMENTS AND REDUCTIONS FROM CONSOLIDATED EXCESS CASH FLOW. In
the event that there shall be Consolidated Excess Cash Flow for
any Fiscal Year (commencing with the Fiscal Year ending on or
about December 31, 2001), Company shall, no later than ninety
(90) days after the end of such Fiscal Year, prepay the Loans
and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 50% of such Consolidated
Excess Cash Flow; PROVIDED that such percentage shall be
57
reduced to 25% if the Consolidated Leverage Ratio as at the last
day of such Fiscal Year is less than 3.00:1.00.
o PREPAYMENTS DUE TO RESTRICTIONS ON REVOLVING LOANS COMMITMENTS OR
CURRENCY FLUCTUATIONS. Company shall from time to time prepay
first the Swing Line Loans and second the Revolving Loans and
cash collateralize Letters of Credit to the extent necessary so
that the Total Utilization of Revolving Loan Commitments shall
not exceed the Revolving Loan Commitments then in effect. If on
any Computation Date Administrative Agent shall have determined
that the Total Utilization of Revolving Loan Commitments exceeds
the Revolving Loan Commitments because of a change in applicable
rates of exchange between Dollars and any other currency under
which a Letter of Credit has been issued, then Administrative
Agent shall give notice to the Company that a prepayment is
required under this subsection 2.4B(iii)(f) and Company shall
promptly (x) prepay first its Swing Line Loans and second its
Revolving Loans and/or (y) cash collateralize its outstanding
Letters of Credit by depositing Dollars into the Collateral
Account established under the Security Agreement, in each case to
the extent necessary so that the Total Utilization of Revolving
Loan Commitments shall not exceed the Revolving Loan Commitments.
o CALCULATIONS OF NET PROCEEDS AMOUNTS; ADDITIONAL PREPAYMENTS AND
REDUCTIONS BASED ON SUBSEQUENT CALCULATIONS. Concurrently with
any prepayment of the Loans and/or reduction of the Revolving
Loan Commitments pursuant to subsections 2.4B(iii)(a)-(e),
Company shall deliver to Administrative Agent an Officer's
Certificate demonstrating the calculation of the amount (the "NET
PROCEEDS AMOUNT") of the applicable Net Asset Sale Proceeds or
Net Insurance/Condemnation Proceeds, or Net Equity Securities
Proceeds (as such term is defined in subsection 2.4B(iii)(c)) or
Net Debt Securities Proceeds (as such term is defined in
subsection 2.4B(iii)(d)) or the applicable Consolidated Excess
Cash Flow, as the case may be, that gave rise to such prepayment
and/or reduction. In the event that Company shall subsequently
determine that the actual Net Proceeds Amount exceeded the amount
set forth in such Officer's Certificate by $100,000 or more,
Company shall promptly make an additional prepayment of the Loans
(and/or, if applicable, the Revolving Loan Commitments shall be
permanently reduced) in an amount equal to the amount of such
excess, and Company shall concurrently therewith deliver to
Administrative Agent an Officer's Certificate demonstrating the
derivation of the additional Net Proceeds Amount resulting in
such excess.
o APPLICATION OF PREPAYMENTS.
o APPLICATION OF VOLUNTARY PREPAYMENTS BY TYPE OF LOANS AND ORDER
OF MATURITY. Any voluntary prepayments pursuant to subsection
2.4B(i) shall be applied to the Loans as specified by Company in
the applicable notice of prepayment; PROVIDED that in the event
Company fails to specify the Loans to
58
which any such prepayment shall be applied, such prepayment shall
be applied FIRST to repay outstanding Swing Line Loans to the
full extent thereof, SECOND to repay outstanding Revolving Loans
to the full extent thereof and THIRD to repay outstanding Term
Loans to the full extent thereof. Any voluntary prepayments of
the Term Loans pursuant to subsection 2.4B(i) (whether the
application thereof is specified by Company or not) shall be
applied to prepay the Tranche A Term Loans and the Tranche B Term
Loans on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and shall be applied on a
pro rata basis (in accordance with the respective outstanding
principal amounts thereof) to each scheduled installment of
principal of the Tranche A Term Loans or the Tranche B Term
Loans, as the case may be, set forth in subsection 2.4A(i) or
2.4A(ii), respectively, that is unpaid at the time of such
prepayment; provided that, notwithstanding anything to the
contrary contained in the sentence immediately preceding this
proviso, up to the first $25 million of any voluntary prepayment
of the Term Loans shall be applied to prepay the Tranche A Term
Loans or Tranche B Term Loans, or both, as the case may be, as
specified by the Company and shall be applied on a pro rata basis
(in accordance with the respective outstanding principal thereof)
to each scheduled installment of principal of the Tranche A Term
Loans or the Tranche B Term Loans, as the case may be, set forth
in subsection 2.4A(i) or 2.4A(ii), respectively, that is unpaid
at the time of such prepayment.
o APPLICATION OF MANDATORY PREPAYMENTS BY TYPE OF LOANS. Any amount
(the "APPLIED AMOUNT") required to be applied as a mandatory
prepayment of the Loans and/or a reduction of the Revolving Loan
Commitments pursuant to subsections 2.4B(iii)(a)-(e) shall be
applied FIRST to prepay the Term Loans to the full extent thereof
as provided in subsection 2.4B(iv)(c), SECOND, to the extent of
any remaining portion of the Applied Amount, to prepay the Swing
Line Loans to the full extent thereof and to permanently reduce
the Revolving Loan Commitments by the amount of such prepayment,
THIRD, to the extent of any remaining portion of the Applied
Amount, to prepay the Revolving Loans to the full extent thereof
and to further permanently reduce the Revolving Loan Commitments
by the amount of such prepayments, and FOURTH, to the extent of
any remaining portion of the Applied Amount, to further
permanently reduce the Revolving Loan Commitments to the full
extent thereof; PROVIDED, HOWEVER that the Revolving Loan
Commitments shall not be reduced pursuant to this subsection
2.4B(iv)(b) to an amount less than $35 million.
o APPLICATION OF MANDATORY PREPAYMENTS TO TERM LOANS AND THE
SCHEDULED INSTALLMENTS OF PRINCIPAL THEREOF. Any mandatory
prepayments of the Term Loans pursuant to subsection 2.4B(iii)
shall be applied to prepay the Tranche A Term Loans and the
Tranche B Term Loans on a pro rata basis (in accordance with the
respective outstanding principal amounts thereof) and shall be
applied on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) to each scheduled
installment of
59
principal of the Tranche A Term Loans or the Tranche B Term
Loans, as the case may be, set forth in subsection 2.4A(i) or
2.4A(ii), respectively, that is unpaid at the time of such
prepayment; PROVIDED, HOWEVER, that Tranche B Term Lenders shall
have the option to waive their rights to receive any such
prepayment (a "WAIVABLE MANDATORY PREPAYMENT"). In the event any
such Tranche B Term Lender desires to waive such Lender's right
to receive such Waivable Mandatory Prepayment, (1) such Tranche B
Term Lender shall so advise Administrative Agent in writing no
later than the close of business on the Business Day following
the date it receives notice of the prepayment from Administrative
Agent and (2) upon receipt of such written advice from such
Tranche B Term Lender, Administrative Agent shall apply the
amount so waived by such Tranche B Term Lender to prepay the
Tranche A Term Loans and to reduce the unpaid scheduled
installments of principal on the Tranche A Term Loans set forth
in subsection 2.4A(i) on a PRO RATA basis and apply the remainder
of the amount so waived by such Lender to prepay the Revolving
Loans. Company shall use its best efforts to notify
Administrative Agent (which shall promptly notify the Tranche B
Term Lenders) of any Waivable Mandatory Prepayment at least three
Business Days prior to the payment to Administrative Agent of
such Waivable Mandatory Prepayment.
o APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND LIBO RATE
LOANS. Considering Tranche A Term Loans, Tranche B Term Loans and
Revolving Loans being prepaid separately, any prepayment thereof
shall be applied first to Base Rate Loans to the full extent
thereof before application to LIBO Rate Loans, in each case in a
manner which minimizes the amount of any payments required to be
made by Company pursuant to subsection 2.6D.
o General Provisions Regarding Payments.
o MANNER AND TIME OF PAYMENT. All payments by Company of principal,
interest, fees and other Obligations hereunder and under the
Notes shall be made in Dollars in same day funds, without
defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Administrative Agent not later than
2:00 P.M. (New York City time) on the date due at the Funding and
Payment Office for the account of Lenders; funds received by
Administrative Agent after that time on such due date shall be
deemed to have been paid by Company on the next succeeding
Business Day. Company hereby authorizes Administrative Agent to
charge its accounts with Administrative Agent in order to cause
timely payment to be made to Administrative Agent of all
principal, interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that
purpose).
o APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST. Except as
provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued
interest on the principal amount being repaid or prepaid, and all
such payments (and, in any event, any payments in respect of any
Loan on a date when interest is due and payable with respect to
such
60
Loan) shall be applied to the payment of interest before
application to principal.
o APPORTIONMENT OF PAYMENTS. Aggregate principal and interest
payments in respect of Loans shall be apportioned among all
outstanding Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares.
Administrative Agent shall promptly distribute to each Lender, at
its primary address set forth below its name on the appropriate
signature page hereof or at such other address as such Lender may
request, its Pro Rata Share of all such payments received by
Administrative Agent and the commitment fees of such Lender when
received by Administrative Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection
2.4C(iii), if, pursuant to the provisions of subsection 2.6C, any
Notice of Conversion/Continuation is withdrawn as to any Affected
Lender or if any Affected Lender makes Base Rate Loans in lieu of
its Pro Rata Share of any LIBO Rate Loans, Administrative Agent
shall give effect thereto in apportioning payments received
thereafter.
o PAYMENTS ON BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
o NOTATION OF PAYMENT. Each Lender agrees that before disposing of
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon
of all Loans evidenced by that Note and all principal payments
previously made thereon and of the date to which interest thereon
has been paid; PROVIDED that the failure to make (or any error in
the making of) a notation of any Loan made under such Note shall
not limit or otherwise affect the obligations of Company
hereunder or under such Note with respect to any Loan or any
payments of principal or interest on such Note.
o Application of Proceeds of Collateral and Payments Under
Guaranties
o APPLICATION OF PROCEEDS OF COLLATERAL. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net
Asset Sale Proceeds, all proceeds received by Administrative
Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral under any
Collateral Document may, in the discretion of Administrative
Agent, be held by Administrative Agent as Collateral for, and/or
(then or at any time thereafter) applied in full or in part by
Administrative Agent against, the applicable Secured Obligations
(as defined in such Collateral Document) in the following order
of priority:
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o To the payment of all costs and expenses of such sale, collection
or other realization, including reasonable compensation to
Lenders, Administrative Agent and its agents and counsel, and all
other expenses, liabilities and advances made or incurred by
Lenders or Administrative Agent in connection therewith, and all
amounts for which Lenders or Administrative Agent is entitled to
indemnification under such Collateral Document and all advances
made by Lenders or Administrative Agent thereunder for the
account of the applicable Loan Party, and to the payment of all
costs and expenses paid or incurred by Lenders or Administrative
Agent in connection with the exercise of any right or remedy
under such Collateral Document, all in accordance with the terms
of this Agreement and such Collateral Document;
o thereafter, to the extent of any excess such proceeds, to the
payment of all other such Secured Obligations for the ratable
benefit of the holders thereof;
o thereafter, to the extent of any excess such proceeds, to the
payment of cash collateral for Letters of Credit for the ratable
benefit of the Issuing Lenders thereof and holders of
participations therein; and
o thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Loan Party or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
o APPLICATION OF PAYMENTS UNDER SUBSIDIARY GUARANTY. All payments
received by Administrative Agent under the Subsidiary Guaranty
shall be applied promptly from time to time by Administrative
Agent in the following order of priority:
o to the payment of the costs and expenses of any collection or
other realization under the Subsidiary Guaranty, including
reasonable compensation to Administrative Agent and its agents
and counsel, and all expenses, liabilities and advances made or
incurred by Administrative Agent in connection therewith, all in
accordance with the terms of this Agreement and the Subsidiary
Guaranty;
o thereafter, to the extent of any excess such payments, to the
payment of all other Guarantied Obligations (as defined in the
Subsidiary Guaranty) for the ratable benefit of the holders
thereof;
o thereafter, to the extent of any excess such payments, to the
payment of cash collateral for Letters of Credit for the ratable
benefit of the Issuing Lenders thereof and holders of
participations therein; and
o thereafter, to the extent of any excess such payments, to the
payment to the applicable Subsidiary Guarantor or to whosoever
may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
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o USE OF PROCEEDS.
o TERM LOANS. On the Closing Date, after application of
approximately $3.9 million in cash on hand, the cash proceeds, if
any, of $150 million of the Senior Subordinated Notes and $110
million of the Convertible Preferred Stock, both as described in
subsection 4.1D, then the proceeds of the Term Loans shall be
applied by Company to pay any remaining Acquisition Financing
Requirements on the Closing Date.
o REVOLVING LOANS; SWING LINE LOANS. On the Closing Date, after the
application of the proceeds of the Term Loans, then approximately
$3.0 million of the proceeds of the Revolving Loans and any Swing
Line Loans may be applied to pay any remaining Acquisition
Financing Requirements to be paid on the Closing Date and the
remaining proceeds of the Revolving Loans and Swing Line Loans
shall be applied by Company for working capital and general
corporate purposes, which may include the making of interest
payments on the Loans, Permitted Acquisitions, the payment of any
remaining Acquisition Financing Requirements to be paid after the
Closing Date and the making of intercompany loans to any of
Company's Subsidiaries in accordance with subsection 7.1(iv) for
their own working capital purposes, and Letters of Credit may be
issued for the purposes set forth in the definition of such term.
o MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement, and no Letter of Credit, shall be used by
Company or any of its Subsidiaries in any manner that might cause
such borrowing or the application of such proceeds or the
issuance of such Letter of Credit to violate Regulation U,
Regulation T or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the
date or dates of such borrowing and such use of proceeds or of
such issuance.
o SPECIAL PROVISIONS GOVERNING LIBO RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to LIBO Rate Loans
as to the matters covered:
o DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 10:00 A.M. (New York City time) on each
Interest Rate Determination Date, Administrative Agent shall
determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest rate
that shall apply to the LIBO Rate Loans for which an interest
rate is then being determined for the applicable Interest Period
and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to Company and each Lender.
o INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Administrative Agent shall have determined (which
determination shall be
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final and conclusive and binding upon all parties hereto), on any
Interest Rate Determination Date with respect to any LIBO Rate
Loans, that by reason of circumstances affecting the London
interbank market adequate and fair means do not exist for
ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted LIBO Rate,
Administrative Agent shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Company
and each Lender of such determination, whereupon (i) no Loans may
be made or continued as, or converted to, LIBO Rate Loans until
such time as Administrative Agent notifies Company and Lenders
that the circumstances giving rise to such notice no longer exist
and (ii) any Notice of Borrowing or Notice of
Conversion/Continuation given by Company with respect to the
Loans in respect of which such determination was made shall be
deemed to be rescinded by Company.
o ILLEGALITY OR IMPRACTICABILITY OF LIBO RATE LOANS. In the event
that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all
parties hereto but shall be made only after consultation with
Company and Administrative Agent) that the making, maintaining or
continuation of its LIBO Rate Loans (i) has become unlawful as a
result of compliance by such Lender in good faith with any law,
treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even
though the failure to comply therewith would not be unlawful) or
(ii) has become impracticable, or would cause such Lender
material hardship, as a result of contingencies occurring after
the date of this Agreement which materially and adversely affect
the London interbank market or the position of such Lender in
that market, then, and in any such event, such Lender shall be an
"Affected Lender" and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to Company
and Administrative Agent of such determination (which notice
Administrative Agent shall promptly transmit to each other
Lender). Thereafter (a) the obligation of the Affected Lender to
make or continue Loans as, or to convert Loans to, LIBO Rate
Loans shall be suspended until such notice shall be withdrawn by
the Affected Lender, (b) to the extent such determination by the
Affected Lender relates to a LIBO Rate Loan then being requested
by Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such Loan
as (or convert such Loan to, as the case may be) a Base Rate
Loan, (c) the Affected Lender's obligation to maintain its
outstanding LIBO Rate Loans (the "Affected Loans") shall be
terminated at the earlier to occur of the expiration of the
Interest Period then in effect with respect to the Affected Loans
or when required by law, and (d) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to
a LIBO Rate Loan then being requested by Company pursuant to a
Notice of Borrowing or a Notice of Conversion/Continuation,
Company shall have the option, subject to the provisions of
subsection 2.6D,
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to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described
above (which notice of rescission Administrative Agent shall
promptly transmit to each other Lender). Except as provided in
the immediately preceding sentence, nothing in this subsection
2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert Loans
to, LIBO Rate Loans in accordance with the terms of this
Agreement.
o COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written
request by that Lender (which request shall set forth in
reasonable detail the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any
interest paid by that Lender to lenders of funds borrowed by it
to make or carry its LIBO Rate Loans and any loss, expense or
liability sustained by that Lender in connection with the
liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that
Lender) a borrowing of any LIBO Rate Loan does not occur on a
date specified therefor in a Notice of Borrowing or a telephonic
request for borrowing, or a conversion to or continuation of any
LIBO Rate Loan does not occur on a date specified therefor in a
Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment (including any
prepayment pursuant to subsection 2.4B(i)) or other principal
payment or any conversion of any of its LIBO Rate Loans occurs on
a date prior to the last day of an Interest Period applicable to
that Loan, (iii) if any prepayment of any of its LIBO Rate Loans
is not made on any date specified in a notice of prepayment given
by Company, or (iv) as a consequence of any other default by
Company in the repayment of its LIBO Rate Loans when required by
the terms of this Agreement.
o BOOKING OF LIBO RATE LOANS. Any Lender may make, carry or
transfer LIBO Rate Loans at, to, or for the account of any of its
branch offices or the office of an Affiliate of that Lender.
o ASSUMPTIONS CONCERNING FUNDING OF LIBO RATE LOANS. Calculation of
all amounts payable to a Lender under this subsection 2.6 and
under subsection 2.7A shall be made as though that Lender had
actually funded each of its relevant LIBO Rate Loans through the
purchase of a LIBO deposit bearing interest at the rate obtained
pursuant to clause (i) of the definition of Adjusted LIBO Rate in
an amount equal to the amount of such LIBO Rate Loan and having a
maturity comparable to the relevant Interest Period and through
the transfer of such LIBO deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States
of America; PROVIDED, HOWEVER, that each Lender may fund each of
its LIBO Rate Loans in any manner it sees fit and the foregoing
assumptions shall be utilized only for the
65
purposes of calculating amounts payable under this subsection 2.6
and under subsection 2.7A.
o LIBO RATE LOANS AFTER DEFAULT. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of
Default, (i) Company may not elect to have a Loan be made or
maintained as, or converted to, a LIBO Rate Loan after the
expiration of any Interest Period then in effect for that Loan
and (ii) subject to the provisions of subsection 2.6D, any Notice
of Borrowing or Notice of Conversion/Continuation given by
Company with respect to a requested borrowing or
conversion/continuation that has not yet occurred shall be deemed
to be rescinded by Company.
o INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
o COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with
respect to the matters covered thereby), in the event that any
Lender shall determine (which determination shall, absent
manifest error, be final and conclusive and binding upon all
parties hereto) that the adoption, effectiveness, phase-in or
applicability after the date hereof of, or any change after the
date hereof in, any law, treaty or governmental rule, regulation
or order, or any change in the interpretation, administration or
application thereof, or any determination of a court or
governmental authority, in each case that becomes effective after
the date hereof (or with respect to a Person which becomes a
Lender after the date hereof or increases its Commitment
hereunder after the date hereof, the date such Person becomes a
Lender or increases its Commitment, as the case may be), or
compliance by such Lender with any guideline, request or
directive issued or made after the date hereof by any central
bank or other governmental or quasi-governmental authority
(whether or not having the force of law):
o subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its
obligations hereunder or any payments to such Lender (or its
applicable lending office) of principal, interest, fees or any
other amount payable hereunder;
o imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by,
any office of such Lender (other than any such reserve or other
requirements with respect to LIBO Rate Loans to the extent
reflected in the definition of Adjusted LIBO Rate); or
66
o imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending
office) or its obligations hereunder or the London interbank
market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto in an amount deemed by such Lender (in its sole discretion) to
be material; then, in any such case, Company shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such additional
amount or amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender on an after-tax basis
for any such increased cost or reduction in amounts received or receivable
hereunder. Such Lender shall deliver to Company (with a copy to Administrative
Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this subsection
2.7A, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
o Withholding of Taxes.
o PAYMENTS TO BE FREE AND CLEAR. All sums payable by Company under
this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without
any deduction or withholding on account of, any Tax (other than a
Tax on the overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States of
America or any political subdivision in or of the United States
of America or any other jurisdiction from which a payment is made
by or on behalf of Company or by any federation or organization
of which the United States of America or any such jurisdiction is
a member at the time of payment.
o GROSSING-UP OF PAYMENTS. If Company or any other Person is
required by law to make any deduction or withholding on account
of any such Tax from any sum paid or payable by Company to
Administrative Agent or any Lender under any of the Loan
Documents:
o Company shall notify Administrative Agent of any such requirement
or any change in any such requirement as soon as Company becomes
aware of it;
o Company shall pay any such Tax before the date on which penalties
attach thereto, such payment to be made (if the liability to pay
is imposed on Company) for its own account or (if that liability
is imposed on Administrative Agent or such Lender, as the case
may be) on behalf of and in the name of Administrative Agent or
such Lender;
o the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be increased
to the extent necessary to ensure that, after the making of that
deduction, withholding or payment, Administrative Agent or such
Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction,
withholding or payment been required or made; and
67
o within 30 days after paying any sum from which it is required by
law to make any deduction or withholding, and within 30 days
after the due date of payment of any Tax which it is required by
clause (b) above to pay, Company shall deliver to Administrative
Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof
to the relevant taxing or other authority;
PROVIDED that no such additional amount shall be required to be paid to
any Lender under clause (c) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature
pages hereof) or after the date of the Assignment Agreement pursuant to
which such Lender became a Lender (in the case of each other Lender)
affecting any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such
deduction, withholding or payment from that in effect at the date of this
Agreement or at the date of such Assignment Agreement (or with respect to
a Person which becomes a Lender after the date hereof or increases its
Commitment hereunder after the date hereof, the date such Person becomes a
Lender or increases its Commitment, as the case may be), as the case may
be, in respect of payments to such Lender.
o EVIDENCE OF EXEMPTION FROM U.S. WITHHOLDING TAX.
o Each Lender that is organized under the laws of any jurisdiction
other than the United States or any state or other political
subdivision thereof (for purposes of this subsection 2.7B(iii), a
"NON-US LENDER") shall deliver to Administrative Agent for
transmission to Company, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof) or on
or prior to the date of the Assignment Agreement (or with respect
to a Person which becomes a Lender after the date hereof or
increases its Commitment hereunder after the date hereof, the
date such Person becomes a Lender or increases its Commitment, as
the case may be), pursuant to which it becomes a Lender (in the
case of each other Lender), and at such other times as may be
necessary in the determination of Company or Administrative Agent
(each in the reasonable exercise of its discretion), (1) two
original copies of Internal Revenue Service Form 1001 or 4224 (or
any successor forms), properly completed and duly executed by
such Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States federal
income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of
the Loan Documents or (2) if such Lender is not a "bank" or other
Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form 1001
or 4224 pursuant to clause (1) above, a Certificate re Non-Bank
Status together with two original copies of Internal Revenue
Service Form W-8 (or any successor form), properly completed and
duly executed by such Lender, together with any other certificate
or statement of exemption required under the Internal Revenue
Code or the regulations issued thereunder to establish that such
Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such
Lender of interest payable under any of the Loan Documents.
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o Each Lender required to deliver any forms, certificates or other
evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever a
lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any
material respect, that such Lender shall promptly (1) deliver to
Administrative Agent for transmission to Company two new original
copies of Internal Revenue Service Form 1001 or 4224, or a
Certificate re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may be, properly
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required in order to
confirm or establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect
to payments to such Lender under the Loan Documents or (2) notify
Administrative Agent and Company of its inability to deliver any
such forms, certificates or other evidence.
o Company shall not be required to pay any additional amount to any
Non-US Lender under clause (c) of subsection 2.7B(ii) if such
Lender shall have failed to satisfy the requirements of clause
(a) or (b)(1) of this subsection 2.7B(iii); PROVIDED that if such
Lender shall have satisfied the requirements of subsection
2.7B(iii)(a) on the Closing Date (in the case of each Lender
listed on the signature pages hereof) or on the date of the
Assignment Agreement pursuant to which it became a Lender (in the
case of each other Lender) (or with respect to a Person which
becomes a Lender after the date hereof or increases its
Commitment hereunder after the date hereof, the date such Person
becomes a Lender or increases its Commitment, as the case may
be), nothing in this subsection 2.7B(iii)(c) shall relieve
Company of its obligation to pay any additional amounts pursuant
to clause (c) of subsection 2.7B(ii) in the event that, as a
result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such
Lender is no longer properly entitled to deliver forms,
certificates or other evidence at a subsequent date establishing
the fact that such Lender is not subject to withholding as
described in subsection 2.7B(iii)(a).
o CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have determined
that the adoption, effectiveness, phase-in or applicability after
the date hereof of, or any change after the date hereof in, any
law, rule or regulation (or any provision thereof) regarding
capital adequacy, or any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or
directive regarding capital adequacy (whether or not having the
force of law) of any such governmental authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or any corporation
controlling such Lender as a
69
consequence of, or with reference to, such Lender's Loans or
Commitments or Letters of Credit or participations therein or
other obligations hereunder with respect to the Loans or the
Letters of Credit to a level below that which such Lender or such
controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender
or such controlling corporation with regard to capital adequacy),
then from time to time, within five Business Days after receipt
by Company from such Lender of the statement referred to in the
next sentence, Company shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction.
Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all
parties hereto absent manifest error.
o OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE;
REPLACEMENT OF LENDER.
o MITIGATION. Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or
Issuing Lender responsible for administering the Loans or Letters
of Credit of such Lender or Issuing Lender, as the case may be,
becomes aware of the occurrence of an event or the existence of a
condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to
receive payments under subsection 2.7 or subsection 3.6, it will,
to the extent not inconsistent with the internal policies of such
Lender or Issuing Lender and any applicable legal or regulatory
restrictions, use reasonable efforts (i) to make, issue, fund or
maintain the Commitments of such Lender or the affected Loans or
Letters of Credit of such Lender or Issuing Lender through
another lending or letter of credit office of such Lender or
Issuing Lender, or (ii) take such other measures as such Lender
or Issuing Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected
Lender would cease to exist or the additional amounts which would
otherwise be required to be paid to such Lender or Issuing Lender
pursuant to subsection 2.7 or subsection 3.6 would be materially
reduced and if, as determined by such Lender or Issuing Lender in
its sole discretion, the making, issuing, funding or maintaining
of such Commitments or Loans or Letters of Credit through such
other lending or letter of credit office or in accordance with
such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or Letters
of Credit or the interests of such Lender or Issuing Lender;
PROVIDED that such Lender or Issuing Lender will not be obligated
to utilize such other lending or letter of credit office pursuant
to this subsection 2.8 unless Company agrees to pay all
incremental expenses incurred by such Lender or Issuing Lender as
a result of utilizing such other lending or letter of credit
office as described in clause (i) above. A certificate as to the
amount of any such expenses payable by
70
Company pursuant to this subsection 2.8 (setting forth in
reasonable detail the basis for requesting such amount) submitted
by such Lender or Issuing Lender to Company (with a copy to
Administrative Agent) shall be conclusive absent manifest error.
o REPLACEMENT OF LENDER. If Company receives a notice pursuant to
subsection 2.7A, 2.7B, 2.7C or 3.6, if a Lender defaults in its
obligations hereunder or in the event a Lender has not consented
to a proposed change, waiver, discharge or termination with
respect to this Agreement which requires the consent of all
Lenders and which has been approved by Requisite Lenders, as
provided in subsection 10.6B, Company shall have the right, if no
Potential Event of Default or Event of Default then exists, to
replace such Lender (a "REPLACED LENDER") with one or more
Eligible Assignees (collectively, the "REPLACEMENT LENDER")
acceptable to Administrative Agent; PROVIDED that (i) at the time
of any replacement pursuant to this subsection 2.8, the
Replacement Lender shall enter into one or more Assignment
Agreements pursuant to subsection 10.1B (and with all fees
payable pursuant to subsection 10.1B to be paid by the
Replacement Lender) pursuant to which the Replacement Lender
shall acquire all of the outstanding Loans and Commitments of,
and in each case participations in Letters of Credit and Swing
Line Loans by, the Replaced Lender and, in connection therewith,
shall pay to (x) the Replaced Lender in respect thereof an amount
equal to the sum of (A) an amount equal to the principal of, and
all accrued interest on, all outstanding Loans of the Replaced
Lender, (B) an amount equal to all unpaid drawings with respect
to Letters of Credit that have been funded by (and not reimbursed
to) such Replaced Lender, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, fees owing to the Replaced
Lender with respect thereto, and all fees which become payable as
a result of such replacement (including any fees under subsection
2.3C, it being agreed that such replacements shall be deemed a
prepayment of the Loans of the Replaced Lender for purposes of
such subsection), (y) the appropriate Issuing Lender an amount
equal to such Replaced Lender's Pro Rata Share of any unpaid
drawings with respect to Letters of Credit (which at such time
remains an unpaid drawing) issued by it to the extent such amount
was not theretofore funded by such Replaced Lender, and (z) Swing
Line Lender an amount equal to such Replaced Lender's Pro Rata
Share of any Refunded Swing Line Loans to the extent such amount
was not theretofore funded by such Replaced Lender, and (ii) all
obligations (including without limitation all such amounts, if
any, owing under subsection 2.6D and, except in the case in which
Company is replacing such Replaced Lender because such Replaced
Lender has defaulted in its obligations hereunder, all fees which
become payable as a result of such replacement under subsection
2.3C (it being acknowledged and agreed that such replacement
shall be deemed to be a voluntary prepayment of the Loans of the
Replaced Lender for purposes of subsection 2.3C)) of Company
owing to the Replaced Lender (other than those specifically
described in clause (i) above in respect of which the assignment
purchase
71
price has been, or is concurrently being, paid), shall be paid in
full to such Replaced Lender concurrently with such replacement.
Upon the execution of the respective Assignment Agreements,
recordation of such assignment in the Register by Administrative
Agent pursuant to subsection 2.1D, the payment of amounts
referred to in clauses (i) and (ii) above and delivery to the
Replacement Lender of the appropriate Note or Notes executed by
Company, the Replacement Lender shall become a Lender hereunder
and the Replaced Lender shall cease to constitute a Lender
hereunder except with respect to indemnification provisions under
this Agreement which by the terms of this Agreement survive the
termination of this Agreement, which indemnification provisions
shall survive as to such Replaced Lender. Notwithstanding
anything to the contrary contained above, no Issuing Lender may
be replaced hereunder at any time while it has Letters of Credit
outstanding hereunder unless arrangements satisfactory to such
Issuing Lender (including the furnishing of a Standby Letter of
Credit in form and substance, and issued by an issuer,
satisfactory to such Issuing Lender or the furnishing of cash
collateral in amounts and pursuant to arrangements satisfactory
to such Issuing Lender) have been made with respect to such
outstanding Letters of Credit.
o LETTERS OF CREDIT
o ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
o LETTERS OF CREDIT. In addition to Company requesting that
Revolving Lenders make Revolving Loans pursuant to subsection
2.1A(iii) and that Swing Line Lender make Swing Line Loans
pursuant to subsection 2.1A(iv), Company may request, in
accordance with the provisions of this subsection 3.1, from time
to time during the period from the Closing Date to but excluding
the date which is thirty (30) days prior to the Revolving Loan
Commitment Termination Date, that one or more Revolving Lenders
issue Letters of Credit negotiated on a sight basis for the
account of Company for the purposes specified in the definitions
of Commercial Letters of Credit and Standby Letters of Credit.
Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Company
herein set forth, any one or more Revolving Lenders may, but
(except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters of Credit in accordance with the
provisions of this subsection 3.1; PROVIDED that Company shall
not request that any Revolving Lender issue (and no Revolving
Lender shall issue):
o any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed
the Revolving Loan Commitments then in effect;
72
o any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $25 million;
o any Standby Letter of Credit having an expiration date later than
the earlier of (a) the date which is ten (10) Business Days prior
to the Revolving Loan Commitment Termination Date and (b) the
date that is one year from the date of issuance of such Standby
Letter of Credit; PROVIDED that the immediately preceding clause
(b) shall not prevent any Issuing Lender from agreeing that a
Standby Letter of Credit will automatically be extended for one
or more successive periods not to exceed one year each (but in no
event to a date which is after the date specified in clause (a))
unless such Issuing Lender elects not to extend for any such
additional period (it being understood and agreed that such
Issuing Lender will not include in such Letter of Credit the date
which is ten (10) Business Days prior to the Revolving Loan
Commitment Termination Date as an expiration date on any Standby
Letter of Credit issued by such Issuing Lender pursuant to this
proviso prior to the succeeding period in which the Revolving
Loan Commitment Termination Date will occur); and PROVIDED
FURTHER that such Issuing Lender shall elect not to extend such
Standby Letter of Credit if it has knowledge that an Event of
Default or Potential Event of Default has occurred and is
continuing (and has not been waived in accordance with subsection
10.6) at the time such Issuing Lender must elect whether or not
to allow such extension.
o any Commercial Letter of Credit having an expiration date (a)
later than the earlier of (X) the date which is thirty (30) days
prior to the Revolving Loan Commitment Termination Date and (Y)
the date which is 180 days from the date of issuance of such
Commercial Letter of Credit or (b) that is otherwise unacceptable
to the applicable Issuing Lender in its reasonable discretion;
o any Letter of Credit at a tenor other than at sight; or
o any Letter of Credit denominated in a currency other than Dollars
if, after giving effect to such issuance, the Dollar Equivalent
of the Letter of Credit Usage for all Letters of Credit
denominated in a currency other than Dollars would exceed $25
million.
o Mechanics of Issuance.
o REQUEST FOR ISSUANCE. Whenever Company desires the issuance of a
Letter of Credit, it shall deliver to the proposed Issuing Lender
(with, simultaneously, a copy to Administrative Agent if the
Person which is Administrative Agent is not the proposed Issuing
Lender) a Request for Issuance of Letter of Credit in the form of
EXHIBIT III annexed hereto no later than 12:00 Noon (New York
City time) at least five Business Days, or such shorter period as
may be agreed to by the applicable Issuing Lender in any
particular instance, in advance of the proposed date of issuance.
The applicable Issuing Lender, in its reasonable discretion, may
require changes in the text of the proposed Letter
73
of Credit or any documents described in or attached to the
Request for Issuance of Letter of Credit. No Letter of Credit
shall require payment against a conforming demand for payment to
be made thereunder on the same business day (under the laws of
the jurisdiction in which the office of the applicable Issuing
Lender to which such demand for payment is required to be
presented is located) that such demand for payment is presented
if such presentation is made after 10:00 A.M. (in the time zone
of such office of the applicable Issuing Lender) on such business
day. Each Request for Issuance of Letter of Credit shall specify
(a) the proposed date of issuance (which shall be a Business
Day), (b) whether the requested Letter of Credit is to be a
Standby Letter of Credit or a Commercial Letter of Credit, (c)
the face amount of the Letter of Credit, (d) in the case of a
Letter of Credit which Company requests to be denominated in a
currency other than Dollars, the currency in which Company
requests such Letter of Credit to be issued, (e) the expiration
date of the requested Letter of Credit, (f) the name and address
of the beneficiary, (g) the name of the Revolving Lender which
has agreed to be the Issuing Lender and (h) either the verbatim
text of the proposed Letter of Credit or the proposed terms and
conditions thereof, including a precise description of any
documents to be presented by the beneficiary which, if presented
by the beneficiary prior to the expiration date of the Letter of
Credit, would require the applicable Issuing Lender to make
payment under the Letter of Credit; PROVIDED that the applicable
Issuing Lender, in its reasonable discretion, may require changes
in the text of the proposed Letter of Credit or any such
documents.
COMPANY SHALL NOTIFY THE APPLICABLE ISSUING LENDER (AND
ADMINISTRATIVE AGENT, IF THE PERSON WHICH IS ADMINISTRATIVE AGENT IS NOT SUCH
ISSUING LENDER) PRIOR TO THE ISSUANCE OF ANY LETTER OF CREDIT IN THE EVENT THAT
ANY OF THE MATTERS TO WHICH COMPANY IS REQUIRED TO CERTIFY IN THE APPLICABLE
REQUEST FOR ISSUANCE OF LETTER OF CREDIT IS NO LONGER TRUE AND CORRECT AS OF THE
PROPOSED DATE OF ISSUANCE OF SUCH LETTER OF CREDIT, AND UPON THE ISSUANCE OF ANY
LETTER OF CREDIT COMPANY SHALL BE DEEMED TO HAVE RE-CERTIFIED, AS OF THE DATE OF
SUCH ISSUANCE, AS TO THE MATTERS TO WHICH COMPANY IS REQUIRED TO CERTIFY IN THE
APPLICABLE REQUEST FOR ISSUANCE OF LETTER OF CREDIT.
o DETERMINATION OF ISSUING LENDER. Upon receipt by a proposed
Issuing Lender of a Request for Issuance of Letter of Credit
pursuant to subsection 3.1B(i) requesting the issuance of a
Letter of Credit, (a) in the event the Person which is
Administrative Agent is the proposed Issuing Lender, the Person
which is Administrative Agent shall be the Issuing Lender with
respect to such Letter of Credit, notwithstanding the fact that
the Letter of Credit Usage with respect to such Letter of Credit
and with respect to all other Letters of Credit issued by the
Person which is Administrative Agent, when aggregated with such
Person's outstanding Revolving Loans and Swing Line Loans, may
exceed such Person's Revolving Loan Commitment then in effect;
PROVIDED that the Person which is Administrative Agent shall not
be obligated to issue any Letter of Credit denominated in a
foreign currency which in the judgment of the Person which is
Administrative Agent is not readily and freely available;
74
and (b) in the event any other Revolving Lender is the proposed
Issuing Lender, such other Revolving Lender shall promptly notify
Company and Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and
(1) if such other Revolving Lender so elects to issue such Letter
of Credit it shall be the Issuing Lender with respect thereto and
(2) if such Revolving Lender fails to so promptly notify Company
and Administrative Agent or declines to issue such Letter of
Credit, Company may request the Person which is Administrative
Agent or another Revolving Lender to be the Issuing Lender with
respect to such Letter of Credit in accordance with the
provisions of this subsection 3.1B.
o ISSUANCE OF LETTER OF CREDIT. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in
subsection 4.3, the applicable Issuing Lender shall issue the
requested Letter of Credit in accordance with such Issuing
Lender's standard operating procedures.
o NOTIFICATION TO REVOLVING LENDERS. Upon the issuance of or
amendment to any Letter of Credit the applicable Issuing Lender
shall promptly notify Administrative Agent of such issuance or
amendment. The notice to Administrative Agent shall be
accompanied by a copy of such Letter of Credit or amendment and
in the event a Revolving Lender requests a copy of such issuance
or amendment, such copies will be provided by Administrative
Agent. Promptly after receipt of such notice (or, if the Person
which is Administrative Agent is the Issuing Lender, together
with such notice), Administrative Agent shall notify each
Revolving Lender of the amount of such Lender's respective
participation in such Letter of Credit, determined in accordance
with subsection 3.1C.
o REPORTS TO REVOLVING LENDERS. In the event that the applicable
Issuing Lender is other than the Person which is Administrative
Agent, such Issuing Lender will send by facsimile transmission to
Administrative Agent, promptly on the first Business Day of each
month, the daily maximum amount available to be drawn for the
Letters of Credit issued by it for the previous month.
Administrative Agent shall deliver to each Revolving Lender, upon
each Letter of Credit fee payment, a report setting forth for
such period the daily maximum amount available to be drawn under
the Letters of Credit issued by all Issuing Lenders during such
period.
o COLLATERALIZATION OF LETTERS OF CREDIT DUE TO CURRENCY
FLUCTUATION. If on any Computation Date the Administrative Agent
determines that the Letter of Credit Usage exceeds the amount
permitted under subsection 3.1A(ii) by an amount greater than
$50,000 because of a change in applicable rates of exchange
between Dollars and any Permitted Currency, then Administrative
Agent shall give notice to the Company that cash
collateralization of the Letter of Credit Usage exceeding the
amount permitted under subsection 3.1A(ii) is required and
Company shall cash collateralize its outstanding Letters of
Credit by depositing Dollars into the Collateral Account
established
75
under the Security Agreement in an amount equal to the extent
that the Letter of Credit Usage exceeds the amount permitted
under subsection 3.1A(ii).
o REVOLVING LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF
CREDIT. Immediately upon the issuance of each Letter of Credit,
each Revolving Lender shall be deemed to, and hereby agrees to,
have irrevocably purchased from the applicable Issuing Lender a
participation in such Letter of Credit and any drawings honored
thereunder in an amount equal to such Revolving Lender's Pro Rata
Share of the maximum amount which is or at any time may become
available to be drawn thereunder.
o LETTER OF CREDIT FEES.
Company agrees to pay the following amounts with respect to Letters
of Credit issued hereunder:
o with respect to each Letter of Credit, (a) a fronting fee,
payable directly to the applicable Issuing Lender for its own
account, equal to the greater of (x) $500 and (y) 0.25% per annum
of the Dollar Equivalent of the daily amount available to be
drawn under such Letter of Credit and (b) a letter of credit fee,
payable to Administrative Agent for the account of Revolving
Lenders (based upon their respective Pro Rata Shares), equal to
(x) the Applicable LIBO Rate Margin for Revolving Loans
MULTIPLIED BY (y) the Dollar Equivalent of the daily maximum
amount available from time to time to be drawn under such Letter
of Credit, each such fronting fee or letter of credit fee to be
payable in arrears on and to (but excluding) the last Business
Day of each March, June, September and December of each year (or
if such Letter of Credit expires or is terminated or cancelled,
upon such date of expiration, termination or cancellation) and
computed on the basis of a 360-day year for the actual number of
days elapsed; and
o with respect to the issuance, amendment or transfer of each
Letter of Credit and each payment of a drawing made thereunder
(without duplication of the fees payable under clause (i) above),
documentary and processing charges payable directly to the
applicable Issuing Lender for its own account in accordance with
such Issuing Lender's standard schedule for such charges in
effect at the time of such issuance, amendment, transfer or
payment, as the case may be.
For purposes of calculating any fees payable under clause (i) of this subsection
3.2, (1) the Dollar Equivalent of the daily amount available to be drawn under
any Letter of Credit shall be determined as of the close of business on any date
of determination and (2) the Dollar Equivalent of any amount described in such
clause which is denominated in a currency other than Dollars shall be determined
by the applicable Exchange Rate for such currency as of the immediately
preceding monthly anniversary of the date of issuance of such Letter of Credit.
Promptly upon receipt by Administrative Agent of any amount described in clause
(i)(b) of this subsection 3.2, Administrative Agent shall distribute to each
Revolving Lender its Pro Rata Share of such amount.
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o DRAWINGS AND REIMBURSEMENT OF AMOUNTS PAID UNDER LETTERS OF
CREDIT.
o RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO DRAWINGS. In
determining whether to honor any drawing under any Letter of
Credit by the beneficiary thereof, the applicable Issuing Lender
shall be responsible only to examine the documents delivered
under such Letter of Credit with reasonable care so as to
ascertain whether they appear on their face to be in substantial
accordance with the terms and conditions of such Letter of
Credit.
o REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF CREDIT.
In the event an Issuing Lender has determined to honor a drawing
under a Letter of Credit issued by it, such Issuing Lender shall
immediately notify Company and Administrative Agent, and Company
shall reimburse such Issuing Lender on or before the Business Day
immediately following the date on which such drawing is honored
(the "Reimbursement Date") in an amount in Dollars (which amount,
in the case of a drawing under a Letter of Credit which is
denominated in a currency other than Dollars, shall be calculated
by reference to the applicable Exchange Rate) and in same day
funds equal to the amount of such drawing; PROVIDED that,
anything contained in this Agreement to the contrary
notwithstanding, (i) unless Company shall have notified
Administrative Agent and such Issuing Lender prior to 10:00 A.M.
(New York City time) on the date such drawing is honored that
Company intends to reimburse such Issuing Lender for the amount
of such drawing with funds other than the proceeds of Revolving
Loans, Company shall be deemed to have given a timely Notice of
Borrowing to Administrative Agent requesting Lenders to make
Revolving Loans that are Base Rate Loans on the Reimbursement
Date in an amount in Dollars (which amount, in the case of a
drawing under a Letter of Credit which is denominated in a
currency other than Dollars, shall be calculated by reference to
the applicable Exchange Rate) equal to the amount of such drawing
and (ii) subject to satisfaction or waiver of the conditions
specified in subsection 4.3B, Revolving Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Base Rate Loans
in the amount of such drawing, the proceeds of which shall be
applied directly by Administrative Agent to reimburse such
Issuing Lender for the amount of such drawing; and PROVIDED
FURTHER that if for any reason proceeds of Revolving Loans are
not received by such Issuing Lender on the Reimbursement Date in
an amount equal to the amount of such drawing, Company shall
reimburse such Issuing Lender, on demand, in an amount in same
day funds equal to the excess of the amount of such drawing over
the aggregate amount of such Revolving Loans, if any, which are
so received. Nothing in this subsection 3.3B shall be deemed to
relieve any Revolving Lender from its obligation to make
Revolving Loans on the terms and conditions set forth in this
Agreement, and Company shall retain any and all rights it may
have against any Revolving Lender resulting from the failure of
such Lender to make such Revolving Loans under this subsection
3.3B.
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o Payment by Revolving Lenders of Unreimbursed Amounts Paid Under
Letters of Credit.
o PAYMENT BY REVOLVING LENDERS. In the event that Company shall
fail for any reason to reimburse any Issuing Lender as provided
in subsection 3.3B in an amount (calculated, in the case of a
drawing under a Letter of Credit denominated in a currency other
than Dollars, by reference to the applicable Exchange Rate) equal
to the amount of any drawing honored by such Issuing Lender under
a Letter of Credit issued by it, such Issuing Lender shall
promptly notify each other Revolving Lender of the unreimbursed
amount of such drawing and of such other Revolving Lender's
respective participation therein based on such Revolving Lender's
Pro Rata Share. Each Revolving Lender shall make available to
such Issuing Lender an amount equal to its respective
participation, in Dollars and in same day funds, at the office of
such Issuing Lender specified in such notice, not later than
12:00 Noon (New York City time) on the first business day (under
the laws of the jurisdiction in which such office of such Issuing
Lender is located) after the date notified by such Issuing
Lender. In the event that any Revolving Lender fails to make
available to such Issuing Lender on such business day the amount
of such Revolving Lender's participation in such Letter of Credit
as provided in this subsection 3.3C, such Issuing Lender shall be
entitled to recover such amount on demand from such Revolving
Lender together with interest thereon at the Federal Funds
Effective Rate for three Business Days and thereafter at the Base
Rate and such defaulting Revolving Lender shall not be entitled
to receive its ratable share of amounts recovered pursuant to
subsection 10.5 to the extent of such defaulted amount. Nothing
in this subsection 3.3C shall be deemed to prejudice the right of
any Revolving Lender to recover from any Issuing Lender any
amounts made available by such Revolving Lender to such Issuing
Lender pursuant to this subsection 3.3C in the event that it is
determined by the final judgment of a court of competent
jurisdiction that the payment with respect to a Letter of Credit
by such Issuing Lender in respect of which payment was made by
such Revolving Lender constituted gross negligence or willful
misconduct on the part of such Issuing Lender.
o DISTRIBUTION TO REVOLVING LENDERS OF REIMBURSEMENTS RECEIVED FROM
COMPANY. In the event any Issuing Lender shall have been
reimbursed by other Revolving Lenders pursuant to subsection
3.3C(i) for all or any portion of any drawing honored by such
Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Revolving Lender
which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such honored drawing such other Revolving
Lender's Pro Rata Share of all payments subsequently received by
such Issuing Lender from Company in reimbursement of such honored
drawing when such payments are received. Any such distribution
shall be made to a Revolving Lender at its primary address set
forth below its name on the appropriate signature page hereof or
at such other address as such Revolving Lender may request.
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o MAXIMUM LIABILITY OF REVOLVING LENDERS. Notwithstanding anything
herein to the contrary, with respect to any drawing under any
Letter of Credit which is paid by the applicable Issuing Lender,
the aggregate amount that any Revolving Lender shall be required
to fund, whether by means of a Revolving Loan pursuant to
subsection 3.3B and/or by means of a participation pursuant to
this subsection 3.3C, shall not exceed such Revolving Lender's
Pro Rata Share of such drawing.
o Interest on Amounts Paid Under Letters of Credit.
o PAYMENT OF INTEREST BY COMPANY. Company agrees to pay to each
Issuing Lender, with respect to drawings honored under any
Letters of Credit issued by it, interest on the amount paid by
such Issuing Lender in respect of each such drawing from the date
such drawing is honored to but excluding the date such amount is
reimbursed by Company (including any such reimbursement out of
the proceeds of Revolving Loans pursuant to subsection 3.3B) at a
rate equal to (a) for the period from the date of such drawing to
but excluding the Reimbursement Date, the rate then in effect
under this Agreement with respect to Revolving Loans that are
Base Rate Loans and (b) thereafter, a rate which is 2.00% per
annum plus the rate of interest otherwise payable under this
Agreement with respect to Revolving Loans that are Base Rate
Loans. Interest payable pursuant to this subsection 3.3D(i) shall
be computed on the basis of a 360-day year for the actual number
of days elapsed in the period during which it accrues and shall
be payable on demand or, if no demand is made, on the date on
which the related drawing under a Letter of Credit is reimbursed
in full.
o DISTRIBUTION OF INTEREST PAYMENTS BY ISSUING LENDER. Promptly
upon receipt by any Issuing Lender of any payment of interest
pursuant to subsection 3.3D(i) with respect to a drawing under a
Letter of Credit issued by it, (a) such Issuing Lender shall
distribute to each other Revolving Lender, out of the interest
received by such Issuing Lender in respect of the period from the
date of such drawing to but excluding the date on which such
Issuing Lender is reimbursed for the amount of such drawing
(including any such reimbursement out of the proceeds of
Revolving Loans pursuant to subsection 3.3B), the amount that
such other Revolving Lender would have been entitled to receive
in respect of the letter of credit fee that would have been
payable in respect of such Letter of Credit for such period
pursuant to subsection 3.2 if no drawing had been honored under
such Letter of Credit, and (b) in the event such Issuing Lender
shall have been reimbursed by other Revolving Lenders pursuant to
subsection 3.3C(i) for all or any portion of such drawing, such
Issuing Lender shall distribute to each other Revolving Lender
which has paid all amounts payable by it under subsection 3.3C(i)
with respect to such drawing such other Revolving Lender's Pro
Rata Share of any interest received by such Issuing Lender in
respect of that portion of such drawing so reimbursed by other
Revolving
79
Lenders for the period from the date on which such Issuing Lender
was so reimbursed by other Revolving Lenders to but excluding the
date on which such portion of such drawing is reimbursed by
Company. Any such distribution shall be made to a Revolving
Lender at its primary address set forth below its name on the
appropriate signature page hereof or at such other address as
such Revolving Lender may request.
o OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for
drawings made under the Letters of Credit issued by it and to repay any
Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and the
obligations of Revolving Lenders under subsection 3.3C(i) shall be unconditional
and irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including any of the following circumstances:
o any lack of validity or enforceability of any Letter of Credit;
o the existence of any claim, set-off, defense or other right which
Company or any Revolving Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), any Issuing
Lender or other Lender or any other Person or, in the case of a
Lender, against Company, whether in connection with this
Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company
or one of its Subsidiaries and the beneficiary for which any
Letter of Credit was procured);
o any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in
any respect;
o payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which
does not substantially comply with the terms of such Letter of
Credit;
o any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
o any breach of this Agreement or any other Loan Document by any
party thereto;
o any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
o the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
PROVIDED, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
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o INDEMNIFICATION; NATURE OF ISSUING LENDERS' DUTIES.
o INDEMNIFICATION. In addition to amounts payable as provided in
subsection 3.6, Company hereby agrees to protect, indemnify, pay
and save harmless each Issuing Lender and each Revolving Lender
from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel and
allocated costs of internal counsel) which such Issuing Lender or
Revolving Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit
by such Issuing Lender, other than as a result of (a) the gross
negligence or willful misconduct of such Issuing Lender as
determined by a final judgment of a court of competent
jurisdiction or (b) subject to the following clause (ii), the
wrongful dishonor by such Issuing Lender of a proper demand for
payment made under any Letter of Credit issued by it or (ii) the
failure of such Issuing Lender to honor a drawing under any such
Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
o NATURE OF ISSUING LENDERS' DUTIES. As between Company and any
Issuing Lender, Company assumes all risks of the acts and
omissions of, or misuse of the Letters of Credit issued by such
Issuing Lender by, the respective beneficiaries of such Letters
of Credit. In furtherance and not in limitation of the foregoing,
such Issuing Lender and the other Revolving Lenders shall not be
responsible (absent a determination of a court of competent
jurisdiction of gross negligence or willful misconduct by such
Issuing Lender) for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted
by any party in connection with the application for and issuance
of any such Letter of Credit, even if it should in fact prove to
be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or
assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) failure
of the beneficiary of any such Letter of Credit to comply fully
with any conditions required in order to draw upon such Letter of
Credit; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required
in order to make a drawing under any such Letter of Credit or of
the proceeds thereof; (vii) the misapplication by the beneficiary
of any such Letter of Credit of the proceeds of any drawing under
such Letter of Credit; or (viii) any consequences arising from
causes beyond the control of such Issuing Lender, including any
Governmental Acts, and none of the above shall affect or impair,
or prevent the vesting of, any of such Issuing Lender's rights or
powers hereunder.
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In furtherance and extension and not in limitation of the specific
provisions set forth in the first paragraph of this subsection 3.5B, any action
taken or omitted by any Issuing Lender under or in connection with the Letters
of Credit issued by it or any documents and certificates delivered thereunder,
if taken or omitted in good faith, shall not put such Issuing Lender under any
resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against any
Issuing Lender for any liability arising solely out of the gross negligence or
willful misconduct of such Issuing Lender, as determined by a final judgment of
a court of competent jurisdiction.
o INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
Subject to the provisions of subsection 2.7B (which shall be
controlling with respect to the matters covered thereby), in the event that any
Issuing Lender or Revolving Lender shall determine (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or order, or any
change therein or in the interpretation, administration or application thereof
(including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by any
Issuing Lender or Revolving Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
o subjects such Issuing Lender or Revolving Lender (or its
applicable lending or letter of credit office) to any additional
Tax (other than any Tax on the overall net income of such Issuing
Lender or Revolving Lender) with respect to the issuing or
maintaining of any Letters of Credit or the purchasing or
maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such
being imposed on or suffered by any particular Issuing Lender;
o imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve),
special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by any
Issuing Lender or participations therein purchased by any
Revolving Lender; or
o imposes any other condition (other than with respect to a Tax
matter) on or affecting such Issuing Lender or Revolving Lender
(or its applicable lending or letter of credit office) regarding
this Section 3 or any Letter of Credit or any participation
therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Revolving Lender of agreeing to issue, issuing or maintaining any
Letter of Credit or agreeing to purchase, purchasing or maintaining any
participation therein or to reduce any amount received or receivable by such
Issuing Lender or Revolving Lender (or its applicable lending or letter of
credit office) with respect thereto (in any amount deemed by such Issuing Lender
or Revolving Lender (in its sole discretion) to be material); then, in any case,
Company shall promptly pay to such Issuing Lender or Revolving Lender on an
after-tax basis, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts as may be necessary to compensate such Issuing
Lender or Revolving Lender for any such increased cost or reduction in amounts
received or receivable hereunder. Such Issuing Lender or Revolving Lender shall
deliver to Company a written statement, setting forth in reasonable detail the
basis for calculating the additional amounts owed to such Issuing Lender or
Revolving Lender under this subsection 3.6, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
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o CONDITIONS TO LOANS AND LETTERS OF CREDIT
The obligations of Lenders to make Loans, the issuance of Letters of
Credit and the effectiveness of the Restatement Date Agreements hereunder are
subject to the satisfaction of the following conditions:
o CONDITIONS TO INITIAL LOANS.
The obligations of Lenders to make the initial Loans made on the
Closing Date were, in addition to the conditions precedent specified in
subsection 4.2, subject to prior or concurrent satisfaction of the following
conditions:
o LOAN PARTY DOCUMENTS. On or before the Closing Date, Company
shall, and shall cause each other Loan Party to, deliver to
Administrative Agent for Lenders (with sufficient originally
executed copies, where appropriate, for each Lender and its
counsel) the following with respect to Company or such Loan
Party, as the case may be, each, unless otherwise noted, dated
the Closing Date:
o Certified copies of the Certificate or Articles of Incorporation
of such Person, together with a good standing certificate from
the Secretary of State of its jurisdiction of incorporation and
each other state in which such Person is qualified as a foreign
corporation to do business and, to the extent generally
available, a certificate or other evidence of good standing as to
payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each
dated a recent date prior to the Closing Date;
o Copies of the Bylaws of such Person, certified as of the Closing
Date by such Person's corporate secretary or an assistant
secretary;
o Resolutions of the Board of Directors of such Person approving
and authorizing the execution, delivery and performance of the
Loan Documents and the Related Agreements to which it is a party,
and the consummation of the transactions contemplated by the
foregoing, certified as of the Closing Date by the corporate
secretary or an assistant secretary of such Person as being in
full force and effect without modification or amendment;
o Signature and incumbency certificates of the officers of such
Person executing the Loan Documents to which it is a party;
o Executed originals of the Loan Documents, in each case to
which such Person is a party; and
o Such other documents as Administrative Agent may reasonably
request in writing.
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o SCIENTIFIC GAMES DOCUMENTS. On or before the Closing Date,
Company shall, or shall cause Scientific Games and its Domestic
Subsidiaries to, as the case may be, deliver to Administrative
Agent for Lenders (with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the
following, each, unless otherwise noted, dated the Closing Date:
o Certified copies of the Certificate or Articles of Incorporation
of each of Scientific Games and its Domestic Subsidiaries,
together with, where applicable, a good standing certificate from
the Secretary of State of its jurisdiction of incorporation and
each other state in which Scientific Games or any of its Domestic
Subsidiaries is qualified as a foreign corporation to do business
and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each dated a recent date prior to
the Closing Date;
o Copies of the Bylaws of each of Scientific Games and its Domestic
Subsidiaries, certified as of the Closing Date by such Person's
corporate secretary or an assistant secretary;
o Resolutions of the Board of Directors of Scientific Games and its
Domestic Subsidiaries approving and authorizing the execution,
delivery and performance of the Loan Documents and the Related
Agreements to which it is a party and the consummation of the
transactions contemplated by the foregoing, each certified as of
the Closing Date by the corporate secretary or an assistant
secretary of such Person as being in full force and effect
without modification or amendment;
o Signature and incumbency certificates of the officers of
Scientific Games and its Subsidiaries executing the Loan
Documents to which it is a party;
o Originals of the Loan Documents, in each case executed by
Scientific Games and each of its Domestic Subsidiaries that is a
party thereto, as the case may be; and
o Such other documents as Administrative Agent may reasonably
request in writing;
o NO MATERIAL ADVERSE CHANGE. Since October 31, 1999, Company and
each of its Subsidiaries and, since December 31, 1999, Scientific
Games and each of its Subsidiaries, shall have conducted its
business in the ordinary course of business and consistent with
past practice and there shall not have been any Material Adverse
Effect.
o SENIOR SUBORDINATED NOTES AND CONVERTIBLE PREFERRED STOCK; USE
OF PROCEEDS.
o SENIOR SUBORDINATED NOTES. On or before the Closing Date the
Senior Subordinated Notes shall have been sold for gross proceeds
of not less than
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$150 million and the Senior Subordinated Note Indenture as
amended by the First Supplemental Indenture dated as of September
6, 2000 (the "FIRST SUPPLEMENTAL") shall be in full force and
effect and shall not have been amended, supplemented, waived or
otherwise modified without the consent of Administrative Agent,
and executed or conformed copies thereof (including all exhibits
and schedules thereto) and any amendments thereto and all
material documents executed in connection therewith shall have
been delivered to Administrative Agent.
o CONVERTIBLE PREFERRED STOCK. On or before the Closing Date, (1)
Company shall have executed and delivered the Convertible
Preferred Stock Purchase Agreement and such agreement shall be in
full force and effect and shall not have been amended,
supplemented, waived or otherwise modified without the consent of
Administrative Agent, and executed or conformed copies thereof
(including all exhibits and schedules thereto) and any amendment
thereto and all documents executed in connection therewith shall
have been delivered to Administrative Agent and (2) Company shall
have received the net cash proceeds from the issuance of $110
million of Convertible Preferred Stock.
o USE OF PROCEEDS. On or before the Closing Date, (1) Company shall
have contributed the net cash proceeds from the Senior
Subordinated Notes issuance to Acquisition Co., and Company and
Acquisition Co. shall have applied such proceeds to the
Acquisition Financing Requirements; (2) Company shall have
applied the net cash proceeds from the Convertible Preferred
Stock issuance to the Acquisition Financing Requirements; and (3)
Company shall have applied approximately $3.9 million in cash on
hand to the Acquisition Financing Requirements.
o NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Company, Acquisition Co. and Scientific
Games shall have obtained all Governmental Authorizations and all
consents of other Persons, in each case that are necessary or
advisable in connection with the Merger, the related financings
and the other transactions contemplated by the Loan Documents and
the Related Agreements and the continued operation of the
business conducted by Company and its Subsidiaries and Scientific
Games and its Subsidiaries in substantially the same manner as
conducted prior to the consummation of the Merger, the related
financings and the other transactions contemplated by the Loan
Documents and the Related Agreements, and each of the foregoing
shall be in full force and effect, in each case other than those
the failure to obtain or maintain which, either individually or
in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. All applicable waiting periods relating
to competition or antitrust laws and regulations shall have
expired without any action being taken or threatened by any
competent authority which would restrain, prevent or otherwise
impose adverse conditions on the Merger, the related financings
and the transactions contemplated by the Loan Documents and the
Related Agreements. No action, request for stay, petition for
review or rehearing, reconsideration, or
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appeal with respect to any of the foregoing shall be pending, and
the time for any applicable agency to take action to set aside
its consent on its own motion shall have expired.
o MERGER MATTERS.
o MERGER AGREEMENT AND CERTAIN OTHER RELATED AGREEMENTS.
Administrative Agent shall have received fully executed or
conformed copies of the Merger Agreement and any documents
executed in connection therewith, and the Merger Agreement shall
be in full force and effect and no provision thereof shall have
been amended, supplemented, waived or otherwise modified in any
respect determined by Administrative Agent to be material
(including, without limitation, any increase in the price to be
paid for the Scientific Games Common Stock to an amount in excess
of $26.00 per share), in each case without the consent of
Administrative Agent;
o MERGER CONDITIONS. All conditions to the Merger set forth in
the Merger Agreement shall have been satisfied or the fulfillment
of any such conditions shall have been waived with the consent of
Administrative Agent and Requisite Lenders;
o MERGER EFFECTIVE. The Merger shall have become effective in
accordance with the terms of the Merger Agreement and the
Delaware General Corporation Law;
o MERGER DOCUMENTS. Administrative Agent shall have received
satisfactory evidence of the filing of the documents with the
Secretary of State of the State of Delaware effecting the Merger
on the Merger Date;
o AGGREGATE CASH CONSIDERATION. The aggregate cash consideration
for the shares of Scientific Games Common Stock to be acquired in
any manner whatsoever in connection with the Merger shall not
exceed approximately $307.7 million in the aggregate;
o TRANSACTION COSTS. Transaction Costs incurred as of the Closing
Date shall not exceed $30.1 million and Administrative Agent
shall have received evidence to its satisfaction to such effect;
o USE OF PROCEEDS. Company shall have provided evidence
satisfactory to Administrative Agent that the proceeds of the
Senior Subordinated Notes, Convertible Preferred Stock and the
Company's cash on hand described in subsection 4.1D have been
irrevocably committed, prior to the application of the proceeds
of the Term Loans and the Revolving Loans made on the Closing
Date, to the payment of a portion of the Acquisition Financing
Requirements;
o MERGER OFFICER'S CERTIFICATE. Administrative Agent shall have
received an Officer's Certificate of Company to the effect set
forth in clauses (i)-(vii) above;
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o OFFICER'S CERTIFICATES. Administrative Agent shall have received
an Officer's Certificate from Company to the effect that the
representations and warranties of each of Acquisition Co. and
Scientific Games in the Merger Agreement are true, correct and
complete in all material respects on and as of the Closing Date
to the same extent as though made on and as of that date.
Administrative Agent shall have received Officer's Certificates
from Company to the effect that (a) the Merger Agreement is in
full force and effect and no provision thereof has been amended,
supplemented, waived or otherwise modified in any material
respect without the consent of Administrative Agent and (b) each
of the parties to the Merger Agreement has complied with all
agreements, terms and conditions contained in the Merger
Agreement and any agreements or documents referred to therein
required to be performed or complied with by each of them on or
before the Closing Date, except where such failure to comply or
perform could not reasonably be expected to have a Material
Adverse Effect, and none of such Persons is in default in their
performance or compliance with any of the terms or provisions
thereof, except where such default could not reasonably be
expected to have a Material Adverse Effect;
o EXISTING COMPANY INDEBTEDNESS; RELEASE OF LIENS.
Contemporaneously with the application of the proceeds of the
initial Loans to be made on the Closing Date:
o Company shall have paid the Tender Premiums and shall have repaid
in full the Existing Company Bank Debt, the Existing Company
Senior Notes and the Existing Company Convertible Debt, and shall
have terminated any commitments to lend or make other extensions
of credit under the agreements relating to the Existing Company
Bank Debt and no other Indebtedness of Company and its
Subsidiaries shall remain outstanding other than the Indebtedness
permitted under subsection 7.1;
o Company shall have delivered to Administrative Agent all
documents and instruments and taken all other actions, in each
case necessary to release all Liens securing the Existing Company
Bank Debt in connection therewith;
o Company shall have made arrangements satisfactory to
Administrative Agent with respect to the cancellation of any
letters of credit outstanding under the agreements relating to
the Existing Company Bank Debt or the issuance of Letters of
Credit to support the obligations of Company and its Subsidiaries
with respect thereto;
o Administrative Agent shall have received an Officer's Certificate
of Company stating that, after giving effect to the transactions
described in this subsection 4.1F, there shall be no existing
Indebtedness of Company or its Subsidiaries outstanding after
consummation of the Closing Date transactions other than the
Indebtedness permitted under subsection 7.1, such Indebtedness to
be in form and substance satisfactory to Administrative Agent;
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o EXISTING SCIENTIFIC GAMES INDEBTEDNESS. Contemporaneously with
the application of the proceeds of the initial Loans to be made
on the Closing Date:
o Scientific Games and its Subsidiaries shall have repaid in full
the Existing Scientific Games Bank Debt and shall have terminated
any commitments to lend or make other extensions of credit
thereunder;
o Scientific Games shall have delivered to Administrative Agent all
documents and instruments and taken all other actions, in each
case necessary to release all Liens securing the Existing
Scientific Games Bank Debt in connection therewith; and
o Scientific Games shall have made arrangements satisfactory to
Administrative Agent with respect to the cancellation of any
letters of credit (other than the Existing Letters of Credit)
outstanding under the agreements relating to the Existing
Scientific Games Bank Debt or the issuance of Letters of Credit
to support the obligations of Scientific Games and its
Subsidiaries with respect thereto; and
o EXISTING LETTERS OF CREDIT. Company shall have furnished to
Administrative Agent copies of all Existing Letters of Credit
and all amendments thereto. Company shall have (x) cash
collateralized the Existing Letters of Credit on or before the
Closing Date and (y) paid to the issuing lenders with respect
to such Existing Letters of Credit all fees and other amounts
owing with respect thereto through and including the Closing
Date.
o MORTGAGES; MORTGAGE POLICIES; ETC. Administrative Agent shall
have received from Company and each applicable Subsidiary of
Company:
o MORTGAGES. Fully executed and notarized Mortgages and any
assignments thereof in favor of Administrative Agent, on behalf
of Lenders (each a "CLOSING DATE MORTGAGE" and, collectively, the
"CLOSING DATE MORTGAGES"), in proper form for recording in all
appropriate places in all applicable jurisdictions, encumbering
each Real Property Asset listed in SCHEDULE 5.5 annexed hereto
and identified as a Closing Date mortgaged property (each a
"CLOSING DATE MORTGAGED PROPERTY" and, collectively, the "CLOSING
DATE MORTGAGED PROPERTIES");
o MATTERS RELATING TO FLOOD HAZARD PROPERTIES. (a) Evidence, which
may be in the form of a letter from an insurance broker or a
municipal engineer, as to whether (1) any Closing Date Mortgaged
Property is a Flood Hazard Property and (2) the community in
which any such Flood Hazard Property is located is participating
in the National Flood Insurance Program, (b) if there are any
such Flood Hazard Properties, such Person's written
acknowledgement of receipt of written notification from
Administrative Agent (1) as to the existence of each such Flood
Hazard Property and (2) as to whether the
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community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program, and (c) in
the event any such Flood Hazard Property is located in a
community that participates in the National Flood Insurance
Program, evidence that Company or the applicable Subsidiary of
Company has obtained flood insurance in respect of such Flood
Hazard Property to the extent required under the applicable
regulations of the Board of Governors of the Federal Reserve
System;
o OPINIONS OF LOCAL COUNSEL. If reasonably required by
Administrative Agent, an opinion of counsel (which counsel shall
be reasonably satisfactory to Administrative Agent) in each state
in which a Closing Date Mortgaged Property is located with
respect to the enforceability of the form(s) of Closing Date
Mortgages to be recorded in such state and such other matters as
Administrative Agent may reasonably request, in each case in form
and substance reasonably satisfactory to Administrative Agent;
o LANDLORD CONSENTS AND ESTOPPELS; RECORDED LEASEHOLD Interests. In
the case of each Closing Date Mortgaged Property consisting of a
Leasehold Property, (a) a Landlord Consent and Estoppel with
respect thereto and (b) evidence that such Leasehold Property is
a Recorded Leasehold Interest;
o TITLE INSURANCE. (a) ALTA mortgagee title insurance policies or
unconditional commitments therefor (the "CLOSING DATE MORTGAGE
POLICIES") issued by the Title Company with respect to the
Closing Date Mortgaged Properties listed on SCHEDULE 5.5 annexed
hereto, in amounts not less than the respective amounts
designated therein with respect to any particular Closing Date
Mortgaged Properties, insuring fee simple title to, or a valid
leasehold interest in, each such Closing Date Mortgaged Property
vested in such Loan Party and assuring Administrative Agent that
the applicable Closing Date Mortgages create valid and
enforceable First Priority mortgage Liens on the respective
Closing Date Mortgaged Properties encumbered thereby (provided
that Company may cause to be delivered to Administrative Agent on
the Closing Date a Closing Date Mortgage Policy listing as an
exception any of the items set forth on SCHEDULE 5.5 annexed
hereto so long as such exception is removed by endorsement within
15 days of the Closing Date), which Closing Date Mortgage
Policies (1) shall include an endorsement for mechanics' liens,
for future advances under this Agreement and for any other
matters reasonably requested by Administrative Agent and (2)
shall provide for affirmative insurance and such reinsurance as
Administrative Agent may reasonably request, all of the foregoing
in form and substance reasonably satisfactory to Administrative
Agent; and (b) evidence satisfactory to Administrative Agent that
such Loan Party has (i) delivered to the Title Company all
certificates and affidavits required by the Title Company in
connection with the issuance of the Closing Date Mortgage
Policies and (ii) paid to the Title Company or to the appropriate
governmental authorities all expenses and premiums of the Title
Company in connection with the issuance of the Closing Date
Mortgage Policies and all recording and stamp taxes (including
mortgage recording and
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intangible taxes) payable in connection with recording the
Closing Date Mortgages in the appropriate real estate records;
o SURVEYS. Unless otherwise approved by Administrative Agent for
delivery pursuant to subsection 6.9D, ALTA surveys of each
Closing Date Mortgaged Property satisfactory in form and
substance to the Administrative Agent and the Title Company
reasonably current and certified to Administrative Agent and
Title Company by a licensed surveyor. Notwithstanding anything to
the contrary herein, if Administrative Agent, in its sole
discretion, determines not to record a Mortgage against one or
more Mortgaged Properties on the Closing Date, because the survey
for such Mortgaged Property has not been delivered to
Administrative Agent, Company shall not be in default hereunder
for failure to satisfy the requirements of this subsection with
respect to such Mortgaged Property; PROVIDED, HOWEVER, that
Company or the applicable Subsidiary Guarantor shall satisfy such
requirements no later than forty-five (45) days after the Closing
Date;
o COPIES OF DOCUMENTS RELATING TO TITLE EXCEPTIONS. Copies of all
recorded documents listed as exceptions to title or otherwise
referred to in the Closing Date Mortgage Policies; and
o ENVIRONMENTAL INDEMNITY. If requested by Administrative Agent, or
if required by any Supplemental Collateral Agent, an
environmental indemnity agreement, reasonably satisfactory in
form and substance to Administrative Agent and its counsel, to
such Supplemental Collateral Agent and its counsel and to Company
and its counsel, with respect to the indemnification of Agents
and Lenders for any liabilities that may be imposed on or
incurred by any of them as a result of any Hazardous Materials
Activity.
o SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the extent
not otherwise satisfied pursuant to subsection 4.1G,
Administrative Agent shall have received evidence satisfactory to
it that Company and Subsidiary Guarantors shall have taken or
caused to be taken all such actions, executed and delivered or
caused to be executed and delivered all such agreements,
documents and instruments, and made or caused to be made all such
filings and recordings (other than the filing or recording of
items described in clauses (iii) and (iv) below) that may be
necessary or, in the reasonable opinion of Administrative Agent,
desirable in order to create in favor of Administrative Agent, a
valid and (upon such filing and recording) perfected First
Priority security interest in the entire personal and mixed
property Collateral (including Collateral property fixtures).
Such actions shall include the following:
o SCHEDULES TO COLLATERAL DOCUMENTS. Delivery to Administrative
Agent of accurate and complete schedules to all of the applicable
Collateral Documents;
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o STOCK CERTIFICATES AND INSTRUMENTS. Delivery to Administrative
Agent of (a) certificates (which certificates shall be
accompanied by irrevocable undated stock powers, duly endorsed in
blank and otherwise satisfactory in form and substance to
Administrative Agent) representing all capital stock pledged
pursuant to the Security Agreement executed by Company and the
Subsidiary Guarantors and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner
satisfactory to Administrative Agent) evidencing any Collateral;
o LIEN SEARCHES AND UCC TERMINATION STATEMENTS. Delivery to
Administrative Agent of (a) the results of a recent search, by a
Person satisfactory to Administrative Agent, of all effective UCC
financing statements and fixture filings which may have been made
with respect to any personal or mixed property of any Loan Party,
together with copies of all such filings disclosed by such
search, and (b) UCC termination statements duly executed by all
applicable Persons for filing in all applicable jurisdictions as
may be necessary to terminate any effective UCC financing
statements or fixture filings disclosed in such search (other
than any such financing statements or fixture filings in respect
of Liens permitted to remain outstanding pursuant to the terms of
this Agreement);
o UCC FINANCING STATEMENTS AND FIXTURE FILINGS. Delivery to
Administrative Agent of UCC financing statements and, where
appropriate, fixture filings, duly executed by each applicable
Loan Party with respect to all personal and mixed property
Collateral of such Loan Party, for filing in all jurisdictions as
may be necessary or, in the reasonable opinion of Administrative
Agent, desirable to perfect the security interests created in
such Collateral pursuant to the Collateral Documents;
o PTO COVER SHEETS, ETC. Delivery to Administrative Agent of all
cover sheets or other documents or instruments required to be
filed with the PTO in order to create or perfect Liens in respect
of any IP Collateral; and
o OPINIONS OF LOCAL COUNSEL. To the extent reasonably required by
Administrative Agent, delivery to Administrative Agent of an
opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) under the laws of each
jurisdiction in which any Loan Party or any personal or mixed
property Collateral is located with respect to the creation and
perfection of the security interests in favor of Administrative
Agent, for the benefit of Lenders, in such Collateral and such
other matters governed by the laws of such jurisdiction regarding
such security interests as Administrative Agent may reasonably
request, in each case in form and substance reasonably
satisfactory to Administrative Agent.
o ENVIRONMENTAL REPORTS. Administrative Agent shall have received
all reports in possession or control of Company and related
letters from the respective authors of such reports authorizing
Lenders to rely on such to the same extent
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as though they were addressed to Lenders and other information in
possession or control of Company, in form, scope and substance
satisfactory to Administrative Agent, regarding environmental
matters relating to Company, its Subsidiaries, Scientific Games
and its Subsidiaries and the Facilities, which reports shall
include a Phase I environmental site assessment of the Facility
owned by Scientific Games, Inc. and located in Alpharetta,
Georgia, and updates of the existing Phase I environmental site
assessments of the Facilities owned by Autotote Enterprises, Inc.
and located in New Haven, Connecticut and in Windsor Locks,
Connecticut, and, as to the Facility located in New Haven,
Connecticut, an estimate of the reasonable cost of investigating
and remediating any Hazardous Materials Activity thereon (to the
extent any such reliance letter, Phase I, update or estimate has
not been received by Administrative Agent on the Closing Date,
Company shall provide oral reports of the environmental
consultants' findings and conclusions as work on such reports
proceeds, and Company shall deliver to Administrative Agent no
later than 30 days after the Closing Date such completed reliance
letter, Phase I, updates and estimate) (collectively, the "PHASE
I AND II REPORTS"). Such Phase I environmental site assessments
and updates shall conform to the ASTM Standard Practice for
Environmental Site Assessments: Phase I Environmental Site
Assessment Process, E 1527.
o FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. Lenders shall have
received (i) audited financial statements of Company and its
Subsidiaries for the Fiscal Years ended October 31, 1999, 1998
and 1997, and of Scientific Games and its Subsidiaries for the
Fiscal Years ended December 31, 1999, 1998 and 1997, consisting
of balance sheets and the related consolidated statements of
income, stockholders' equity and cash flows for such Fiscal
Years, (ii) unaudited financial statements of Company and its
Subsidiaries, for the Fiscal Quarters ended January 31, 2000 and
April 30, 2000, and unaudited financial statements of Scientific
Games and its Subsidiaries as of March 31, 2000 and June 30,
2000, consisting of a balance sheet and the related consolidated
statements of income and cash flows for the three- and six-month
periods ending on such dates, all in reasonable detail and
certified by the chief financial officer of Company and
Scientific Games, as the case may be, that they fairly present
the financial condition of Company and its Subsidiaries and
Scientific Games and its Subsidiaries, respectively, as at the
dates indicated and the results of their operations and their
cash flows for the periods indicated, subject to changes from
audit and normal year-end adjustments, (iii) unaudited pro forma
consolidated balance sheets of Company and its Subsidiaries and
of Scientific Games and its Subsidiaries as at July 31, 2000,
prepared in accordance with GAAP and reflecting the estimated
effects of the consummation of the Merger, the related financings
and the other transactions contemplated by the Loan Documents and
the Related Agreements, which pro forma financial statements
shall be in form and substance satisfactory to Agents and
Lenders, and (iv) projected financial statements (including
balance sheets and related statements of operations and cash
flows) of Company and its Subsidiaries through and including the
last day of Company's Fiscal Year
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ended on or about December 31, 2008, which projected financial
statements shall be in form and substance satisfactory to Agents
and Lenders (the "FINANCIAL PLAN").
o SOLVENCY ASSURANCES. On the Closing Date, Administrative Agent
and Lenders shall have received a Financial Condition Certificate
from the chief financial officer of Company, with appropriate
attachments, in each case demonstrating that, after giving effect
to the Merger, the related financings and the other transactions
contemplated by the Loan Documents and the Related Agreements,
Company and its Subsidiaries will be Solvent.
o EVIDENCE OF INSURANCE. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence
satisfactory to it that all insurance required to be maintained
pursuant to subsection 6.4 is in full force and effect and that
Administrative Agent on behalf of Lenders has been named as
additional insured and/or loss payee thereunder to the extent
required under subsection 6.4.
o OPINIONS OF COUNSEL TO LOAN PARTIES; RELIANCE LETTERS. Lenders
and their respective counsel shall have received originally
executed copies of one or more favorable written opinions of
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, counsel for Company, dated
as of the Closing Date, together with opinions from each of
Xxxxxx X. Xxxxxxx, Esq., General Counsel of Company, C. Xxxx
Xxxxxx, Esq., General Counsel of Scientific Games, Xxxxx,
Xxxxxxxx & Xxxxxxx, LLP, special Georgia counsel for Company,
Sills, Cummis, Radin, Tischman, Xxxxxxx & Gross P.A., special New
Jersey counsel for Company, Tobin, Carberry, X'Xxxxxx, Xxxxx &
Xxxxxxxx, P.C., special Connecticut counsel for Company, and
Xxxxxxx Xxxxxx, special Nevada counsel for Company, and
substantially in the form of EXHIBIT VII-A, EXHIBIT VII-B,
EXHIBIT VII-C, EXHIBIT VII-D, EXHIBIT VII-E, EXHIBIT VII-F and
EXHIBIT VII-G, as the case may be, annexed hereto and as to such
other matters as Administrative Agent acting on behalf of Lenders
may reasonably request. Administrative Agent and its counsel
shall have received copies of each of the opinions of counsel
delivered to the parties under the Related Agreements on or prior
to the Closing Date, together with a letter from each such
counsel authorizing Lenders to rely upon such opinion to the same
extent as though it were addressed to Lenders.
o OPINIONS OF ADMINISTRATIVE AGENT'S COUNSEL. Lenders shall have
received originally executed copies of one or more favorable
written opinions of O'Melveny & Xxxxx LLP, counsel to
Administrative Agent, dated as of the Closing Date, substantially
in the form of EXHIBIT VIII annexed hereto and as to such other
matters as Administrative Agent acting on behalf of Lenders may
reasonably request.
o FEES. Company shall have paid to Arranger, Agents and Lenders the
fees payable on the Closing Date.
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o REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Administrative Agent an Officer's
Certificate, in form and substance satisfactory to Administrative
Agent, to the effect that the representations and warranties in
Section 5 and in the other Loan Documents are true, correct and
complete in all material respects on and as of the Closing Date
to the same extent as though made on and as of that date (or, to
the extent such representations and warranties specifically
relate to an earlier date, that such representations and
warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company and the
other Loan Parties have performed in all material respects all
agreements and satisfied all conditions which this Agreement and
the other Loan Documents provide shall be performed or satisfied
by them on or before the Closing Date except as otherwise
disclosed to Lenders and agreed to in writing by Administrative
Agent and Requisite Lenders.
o ADDITIONAL INFORMATION. There shall have been no information
relating to conditions or events not previously disclosed to
Administrative Agent or any Lender or relating to new information
or additional developments concerning conditions of events
previously disclosed to Administrative Agent or any Lender which
may have a Material Adverse Effect on the business, operations,
properties, assets, liabilities, condition (financial or
otherwise) or prospects of Company, Scientific Games and their
respective Subsidiaries. The results of Administrative Agent's
legal, tax, regulatory and environmental investigations with
respect to Scientific Games and its Subsidiaries, the Merger, the
related financings and the other transactions contemplated by the
Loan Documents and the Related Agreements shall be reasonably
satisfactory in all material respects to Administrative Agent.
o COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on
behalf of Lenders, and its counsel shall be satisfactory in form
and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents
as Administrative Agent may reasonably request in writing.
Each Lender hereby agrees that by its execution and delivery of its
signature page hereto and by the funding of its Loans to be made on the Closing
Date, such Lender approves of and consents to each of the matters set forth in
this subsection 4.1 which must be approved by, or satisfactory to, Requisite
Lenders; PROVIDED that, in the case of any agreement or document which must be
approved by, or which must be satisfactory to, Requisite Lenders, a copy of such
agreement or document shall have been delivered to such Lender on or prior to
the Closing Date by Administrative Agent.
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o CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
o Administrative Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by
an Authorized Representative.
o As of that Funding Date:
o The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all
material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to
an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all
material respects on and as of such earlier date;
o No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such
Notice of Borrowing that would constitute an Event of Default or
a Potential Event of Default;
o Each Loan Party shall have performed in all material respects all
agreements and satisfied all conditions which this Agreement
provides shall be performed or satisfied by it on or before that
Funding Date;
o No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it on that Funding
Date;
o The making of the Loans requested on such Funding Date shall not
violate any law including Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve
System; and
o There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or any
of its Subsidiaries or any property of Company or any of its
Subsidiaries that has not been disclosed by Company in writing
pursuant to subsection 5.6 or 6.1(ix) prior to the making of the
last preceding Loans (or, in the case of the initial Loans, prior
to the execution of this Agreement), and there shall have
occurred no development not so disclosed in any such action,
suit, proceeding, governmental investigation or arbitration so
disclosed, that, in either event, in the opinion of
Administrative Agent or of Requisite Lenders, would be expected
to have a Material Adverse Effect; and no injunction or other
restraining order shall have been issued and no hearing to cause
an injunction or other restraining order to be issued shall be
pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or
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otherwise prevent the consummation of, or to recover any damages
or obtain relief as a result of, the transactions contemplated by
this Agreement or the making of the Loans hereunder.
o CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not the
applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
o On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have
been made.
o On or before the date of issuance of such Letter of Credit,
Administrative Agent and Issuing Lender shall have received, in
accordance with the provisions of subsection 3.1B(i), an
originally executed Request for Issuance of Letter of Credit, in
each case signed by an Authorized Representative, together with
all other information specified in subsection 3.1B(i) and such
other documents or information as the applicable Issuing Lender
may reasonably require in connection with the issuance of such
Letter of Credit.
o On the date of issuance of such Letter of Credit, all conditions
precedent described in subsection 4.2B shall be satisfied to the
same extent as if the issuance of such Letter of Credit were the
making of a Loan and the date of issuance of such Letter of
Credit were a Funding Date.
o RESTATEMENT EFFECTIVE DATE CONDITIONS.
The effectiveness of the Restatement Date Agreements is, in addition
to the conditions precedent specified in subsection 4.1, subject to satisfaction
of the following conditions precedent:
o LOAN PARTY DOCUMENTS. On or before the Restatement Effective
Date, Company shall, and shall cause each other Loan Party to,
deliver to Administrative Agent for Lenders (with sufficient
originally executed copies, where appropriate, for each Lender
and its counsel) the following with respect to Company or such
other Loan Party, as the case may be, each, unless otherwise
noted, dated the Restatement Effective Date:
o Signature and incumbency certificates of the officers of such
Person executing the Restatement Date Agreements to which it is a
party;
o Executed originals of the Restatement Date Agreements, in each
case to which such Person is a party; and
o Such other documents as Administrative Agent may reasonably
request in writing.
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o RESTATEMENT EFFECTIVE DATE OPINIONS OF COUNSEL TO LOAN Parties.
Lenders and their respective counsel shall have received
originally executed copies of one or more favorable written
opinions of (i) Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, counsel for
Company, and (ii) Xxxxxx X. Xxxxxxx, Esq., General Counsel of
Company, each dated as of the Restatement Effective Date, and
substantially in the form of Exhibit XVII and Exhibit XVIII,
respectively, annexed hereto and as to such other matters as
Administrative Agent acting on behalf of Lenders may reasonably
request.
o RESTATEMENT EFFECTIVE DATE OPINIONS OF ADMINISTRATIVE AGENT'S
COUNSEL. Lenders shall have received originally executed copies
of one or more favorable written opinions of O'Melveny & Xxxxx
LLP, counsel to Administrative Agent, dated as of the Restatement
Effective Date, substantially in the form of Exhibit XIX annexed
hereto and as to such other matters as Administrative Agent
acting on behalf of Lenders may reasonably request.
o REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Administrative Agent an Officer's
Certificate, in form and substance satisfactory to Administrative
Agent, to the effect that the representations and warranties in
Section 5 and in the other Loan Documents are true, correct and
complete in all material respects on and as of the Restatement
Effective Date to the same extent as though made on and as of
that date (or, to the extent such representations and warranties
specifically relate to an earlier date, that such representations
and warranties were true, correct and complete in all material
respects on and as of such earlier date) and that Company and the
other Loan Parties have performed in all material respects all
agreements and satisfied all conditions which this Agreement and
the other Loan Documents provide shall be performed or satisfied
by them on or before the Restatement Effective Date except as
otherwise disclosed to Lenders and agreed to in writing by
Administrative Agent and Requisite Lenders.
Each Lender hereby agrees that by its execution and delivery of its
signature page hereto and by the funding of its Loans to be made on the
Restatement Effective Date, such Lender approves of and consents to each of the
matters set forth in this subsection 4.4 which must be approved by, or
satisfactory to, Requisite Lenders; PROVIDED that, in the case of any agreement
or document which must be approved by, or which must be satisfactory to,
Requisite Lenders, a copy of such agreement or document shall have been
delivered to such Lender on or prior to the Restatement Effective Date by
Administrative Agent.
o COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and the Agents to enter into this
Agreement and to make the Loans, to induce Issuing Lenders to issue Letters of
Credit and to induce other Lenders to purchase participations therein, Company
represents and warrants to each Lender and the Agents, except to the extent that
such statements specifically relate to an earlier date (in which case such
representations and warranties shall have been true, correct and complete in all
material respects as of such earlier date) are true complete and correct in all
material respects, on
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the date of this Agreement, (to the extent required by subsection 4.2B(i)) on
each Funding Date and on the date of issuance of each Letter of Credit, that the
following statements are true, correct and complete:
o ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES.
o Organization and Powers. Each Loan Party is a corporation duly
organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation or organization as specified
in SCHEDULE 5.1 annexed hereto. Each Loan Party has all requisite
corporate power and authority to own and operate its properties,
to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents to which it is a
party and to carry out the transactions contemplated thereby.
o Qualification and Good Standing. Each Loan Party is qualified to
do business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its
business and operations, except in jurisdictions, individually or
in the aggregate for all such jurisdictions, where the failure to
be so qualified or in good standing has not had and will not have
a Material Adverse Effect.
o Conduct of Business. Company and its Subsidiaries are engaged
only in the businesses permitted to be engaged in pursuant to
subsection 7.13.
o Subsidiaries. All of the Subsidiaries of Company, including any
Inactive Subsidiaries, are identified in SCHEDULE 5.1 annexed
hereto, as said SCHEDULE 5.1 may be supplemented from time to
time pursuant to the provisions of subsection 6.1(xvi). The
capital stock of each of the Subsidiaries of Company identified
in said SCHEDULE 5.1 is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock (other than
the Scientific Games Common Stock) constitutes Margin Stock. Each
of the Subsidiaries of Company identified in said SCHEDULE 5.1 is
a corporation, limited liability company or other entity duly
organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization
set forth therein, has all requisite corporation or limited
liability company, as the case may be, power and authority to own
and operate its properties and to carry on its business as now
conducted and as proposed to be conducted, and is qualified to do
business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its
business and operations, in each case except where failure to be
so qualified or in good standing or a lack of such corporation or
limited liability company, as the case may be, power and
authority, individually or in the aggregate, has not had and will
not have a Material Adverse Effect. Said SCHEDULE 5.1 correctly
sets forth the ownership interest of Company and each of its
Subsidiaries in each of the Subsidiaries of Company identified
therein.
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o AUTHORIZATION OF BORROWING, ETC.
o Authorization of Borrowing. The execution, delivery and
performance of the Loan Documents and the consummation of the
transactions consummated thereby have been duly authorized by all
necessary actions on the part of each Loan Party that is a party
thereto.
o No Conflict. The execution, delivery and performance by Loan
Parties of the Loan Documents and the consummation of the
transactions contemplated by the Loan Documents and the Related
Agreements do not and will not (i) violate any provision of any
law or any governmental rule or regulation applicable to Company
or any of its Subsidiaries, the Certificate or the Articles of
Incorporation or Bylaws of Company or any of Company's
Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of Company's
Subsidiaries, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default
under any Contractual Obligation of Company or any of its
Subsidiaries, except for such breaches, conflicts and defaults
which could not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the
properties or assets of Company or any of Company's Subsidiaries
(other than any Liens created under any of the Loan Documents in
favor of Administrative Agent on behalf of Lenders), or (iv)
require any approval of or consent of any Person under any
Contractual Obligation of Company or any of Company's
Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing
to Lenders or which the failure to obtain could not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
o Governmental Consents. The execution, delivery and performance by
Loan Parties of the Loan Documents and the consummation of the
transactions contemplated by the Loan Documents do not and will
not require any registration with, consent or approval of, or
notice to, or other action to, with or by, any federal, state or
other governmental authority or regulatory body, except for
filings required in connection with the perfection of security
interests granted pursuant to the Loan Documents, and such other
registrations, consents, approvals, notices or other actions
which have been or will be made, obtained, given or taken on or
before the Closing Date or which the failure to obtain or take
could not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
o Binding Obligation. Each of the Loan Documents has been duly
executed and delivered by each Loan Party that is a party thereto
and is the legally valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its
respective terms, except as may be limited by bankruptcy,
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insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
o Valid Issuance of Equity Securities. The capital stock of
Acquisition Co. to be sold on or before the Closing Date, when
issued and delivered, will be duly and validly issued, fully paid
and nonassessable. No stockholder of Acquisition Co. has or will
have any preemptive rights to subscribe for any additional equity
Securities of Acquisition Co. The issuance and sale of such
common equity Securities of Acquisition Co., upon such issuance
and sale, will either (a) have been registered or qualified under
applicable federal and state securities laws or (b) be exempt
therefrom.
o Senior Subordinated Notes. Company has the corporate power and
authority to issue the Senior Subordinated Notes. The Senior
Subordinated Notes are the legally valid and binding obligations
of Company, enforceable against Company in accordance with their
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability. The subordination provisions of the
Senior Subordinated Notes are enforceable against the holders
thereof in accordance with their terms and the Loans, Letters of
Credit and all other monetary Obligations hereunder are within
the definitions of "Senior Indebtedness" and "Designated Senior
Indebtedness" included in such provisions. The issuance and sale
by Company of Senior Subordinated Notes were either (a)
registered or qualified under applicable federal and state
securities laws or (b) are exempt therefrom.
o Valid Issuance of Convertible Preferred Stock. The Convertible
Preferred Stock, when issued and delivered, will be duly and
validly issued, fully paid and nonassessable. The Convertible
Preferred Stock is either (a) registered or qualified under
applicable federal and state securities law or (b) is exempt
therefrom.
o FINANCIAL CONDITION.
Company has heretofore delivered to Lenders, at Lenders' request,
the following financial statements and information: (i) the audited consolidated
balance sheets of Company and its Subsidiaries as at October 31, 1999, 1998 and
1997 and the audited consolidated balance sheets of Scientific Games and its
Subsidiaries as at December 31, 1999, 1998 and 1997, and the related
consolidated statements of income, stockholders' equity and cash flows of
Company, Scientific Games and their respective Subsidiaries for the Fiscal Years
then ended and (ii) the unaudited consolidated balance sheet of Company and its
Subsidiaries for the Fiscal Quarters ending on or about January 31, 2000 and
April 30, 2000 and of Scientific Games and its Subsidiaries as of March 31, 2000
and June 30, 2000, and the related unaudited consolidated statements of income
and cash flows of Company, Scientific Games and their respective Subsidiaries
for the three months and six months then ended. All such statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial condition (on a consolidated basis) of the entities described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows (on a consolidated basis) of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal
year-end adjustments. Company does not (and will not following the funding of
the initial Loans) have any Contingent Obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment
that is not required to be reflected in the foregoing financial statements or
the notes
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thereto and which in any such case is material in relation to the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of Company or any of its Subsidiaries, taken as a whole.
o NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since October 31, 1999, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect, and neither Company nor any of its Subsidiaries has directly or
indirectly declared, ordered, paid or made, or set apart any sum or property
for, any Restricted Junior Payment or agreed to do so except as permitted under
subsection 7.5.
o TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
o Title to Properties; Liens. Company and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests
in real property), (ii) valid leasehold interests in (in the case
of leasehold interests in real or personal property), or (iii)
good title to (in the case of all other personal property), all
of their respective properties and assets reflected in the
financial statements referred to in subsection 5.3 or in the most
recent financial statements delivered pursuant to subsection 6.1,
in each case except for assets disposed of since the date of such
financial statements in the ordinary course of business or as
otherwise permitted under subsection 7.7. Except as permitted by
this Agreement, all such properties and assets are free and clear
of Liens. With respect to those Liens set forth on SCHEDULE 5.5
annexed hereto, the debts secured thereby have been paid in full
and are no longer outstanding.
o Real Property. As of the Closing Date, SCHEDULE 5.5 annexed
hereto contains a true, accurate and complete list of (i) all
real property owned by Company or any Subsidiary and (ii) all
material leases, subleases or assignments of leases (together
with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of
any Loan Party, regardless of whether such Loan Party is the
landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment.
Except as specified in SCHEDULE 5.5 annexed hereto, each
agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and Company and each Loan
Party do not have knowledge of any default that has occurred and
is continuing thereunder, and each such agreement constitutes the
legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles.
o LITIGATION; ADVERSE FACTS.
Except as set forth in SCHEDULE 5.6 annexed hereto, there are no
actions, suits, proceedings, arbitrations or governmental investigations
(whether or not purportedly on behalf of Company or any of its Subsidiaries) at
law or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or
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instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Company, threatened against or affecting
Company or any of its Subsidiaries or any property of Company or any of its
Subsidiaries and that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect or could reasonably be expected
to prevent or unduly delay the Merger. Neither Company nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect, or (ii) is subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
o PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns
and reports of Company and its Subsidiaries required to be filed by any of them
have been timely filed, and all material taxes shown on such tax returns to be
due and payable and all assessments, fees and other governmental charges upon
Company and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid when
due and payable other than those being contested in good faith. Company knows of
no proposed tax assessment against Company or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect and which is not
being actively contested by Company or such Subsidiary in good faith and by
appropriate proceedings; PROVIDED that such reserves or other appropriate
provisions, if any, as shall be required in conformity with GAAP shall have been
made or provided therefor.
o PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
o Neither Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual
Obligations, and no condition exists that, with the giving of
notice or the lapse of time or both, would constitute such a
default, except where the consequences, direct or indirect, of
such default or defaults, if any, individually or in the
aggregate, could not reasonably be expected to have a Material
Adverse Effect.
o Neither Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter
or other internal restrictions which, individually or in the
aggregate, could reasonably be expected to result in a Material
Adverse Effect.
o GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
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o SECURITIES ACTIVITIES.
o Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
o Not more than 25% of the value of the assets (either of Company
only or of Company and its Subsidiaries on a consolidated basis)
that are subject to the restrictions on Liens or dispositions
contained in subsection 7.2 or 7.7 or subject to any restriction
contained in any agreement or instrument, between Company and any
Lender or any Affiliate of any Lender, relating to Indebtedness
and within the scope of subsection 8.2, will be Margin Stock.
o EMPLOYEE BENEFIT PLANS.
o Company and each of its Subsidiaries are in material compliance
with all applicable provisions and requirements of ERISA and the
regulations and published interpretations thereunder with respect
to each Company Employee Benefit Plan, and have performed all
their obligations under each Company Employee Benefit Plan,
except where a failure to comply or perform could not reasonably
be expected to have a Material Adverse Effect. Each Company
Employee Benefit Plan which is intended to qualify under Section
401(a) of the Internal Revenue Code is so qualified.
o No ERISA Event has occurred or is reasonably expected to occur
that could reasonably be expected to have a Material Adverse
Effect.
o Except to the extent required under Section 4980B of the Internal
Revenue Code or other applicable law or individual contract, no
Company Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired
or former employee of Company, any of its Subsidiaries or any of
their respective ERISA Affiliates.
o As of the most recent valuation date for any Pension Plan, and
excluding for purposes of such computation all Pension Plans with
respect to which assets exceed benefit liabilities (as defined in
Section 4001(a)(16) of ERISA), the sum of:
o the unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA) individually or in the aggregate for all
Company Pension Plans; and
o the liability that Company or its Subsidiaries could reasonably
be expected to incur as the result of such unfunded benefit
liabilities, individually or in the aggregate, for all Pension
Plans other than Company Pension Plans (assuming amortization of
such unfunded benefit liabilities over ten years);
does not exceed $5 million.
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o As of the most recent valuation date for which an actuarial
report has been received and based on information available
pursuant to Section 4221(e) of ERISA, the sum of:
o the potential liability of Company and its Subsidiaries for a
complete withdrawal from all Multiemployer Plans (within the
meaning of Section 4203 of ERISA) to which Company or any of its
Subsidiaries contribute; and
o the liability that Company or its Subsidiaries could be
reasonably be expected to incur as a result of the complete
withdrawal from all Multiemployer Plans to which neither Company
nor any of its Subsidiaries contribute, after considering the
financial condition of all of the ERISA Affiliates most closely
related to the contributing employer(s);
does not exceed $5 million.
o CERTAIN FEES.
Other than as disclosed in the Merger Agreement, no broker's or
finder's fee or commission will be payable with respect to this Agreement or any
of the transactions contemplated hereby, and Company hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any claim, demand
or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
o ENVIRONMENTAL PROTECTION.
Except as set forth in SCHEDULE 5.13 annexed hereto:
o To the knowledge of the Company and its Subsidiaries, neither
Company nor any of its Subsidiaries nor any of their respective
Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person
relating to (a) any Environmental Law, (b) any Environmental
Claim, or (c) any Hazardous Materials Activity, except where such
an order, consent, decree or settlement agreement, individually
or in the aggregate, would not be reasonably expected to have a
Material Adverse Effect;
o Neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability
Act (42 U.S.C. ss. 9604) or any comparable state law, except
where such a letter or request, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse
Effect;
o To the knowledge of the Company and its Subsidiaries, there are
and have been no conditions, occurrences, or Hazardous Materials
Activities which could reasonably be expected to form the basis
of an Environmental Claim against Company or any of its
Subsidiaries, except where such a condition,
104
occurrence or Hazardous Materials Activity, individually or in
the aggregate, would not reasonably be expected to have a
Material Adverse Effect;
o Neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries
has filed any notice under any Environmental Law indicating past
or present treatment of Hazardous Materials at any Facility, and
none of Company's or any of its Subsidiaries' operations involves
the generation, transportation, treatment, storage or disposal of
hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
state equivalent, except where such treatment or generation,
transportation, storage or disposal, individually or in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect; and
o To the knowledge of the Company and its Subsidiaries, compliance
with all current or reasonably foreseeable future requirements
pursuant to or under Environmental Laws will not, individually or
in the aggregate, give rise to a Material Adverse Effect.
To the knowledge of the Company and its Subsidiaries,
notwithstanding anything in this subsection 5.13 to the contrary, no event or
condition has occurred or is occurring with respect to Company or any of its
Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on SCHEDULE 5.13 annexed hereto, which individually or in the aggregate, has had
or would reasonably be expected to have a Material Adverse Effect.
o EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or, to the best
knowledge of the Company, threatened involving Company or any of its
Subsidiaries that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
o SOLVENCY.
Each Loan Party is and, upon the incurrence of any Obligations by
such Loan Party on any date on which this representation is made, will be,
Solvent.
o MATTERS RELATING TO COLLATERAL.
o Creation, Perfection and Priority of Liens. Subject to the filing
of UCC financing statements and the taking of possession by the
Administrative Agent of all stock certificates and instruments,
if any, constituting Collateral, the execution and delivery of
the Collateral Documents by Loan Parties, together with actions
taken pursuant to subsections 4.1G, 4.1H, 6.8 and 6.9 are
effective, or in the case of subsections 6.8 and 6.9, will be
effective at the time of the acquisition of such Subsidiaries, to
create in favor of Administrative Agent for the benefit of
Lenders, as security for the respective Secured Obligations (as
defined in the applicable Collateral Document in respect of any
Collateral), a valid and perfected First Priority Lien on all of
the Collateral.
105
o Governmental Authorizations. No authorization, approval or other
action by, and no notice to or filing with, any governmental
authority or regulatory body is required for either (i) the
pledge or grant by any Loan Party of the Liens purported to be
created in favor of Administrative Agent pursuant to any of the
Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether
specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except
for filings or recordings contemplated by subsection 5.16A and
except as may be required, in connection with the disposition of
any Pledged Collateral (as defined in the Security Agreement), by
laws generally affecting the offering and sale of securities.
o Absence of Third-Party Filings. Except such as may have been
filed (x) in favor of Administrative Agent, (y) with respect to
Permitted Encumbrances, and (z) as to which executed UCC
termination statements have been delivered to the Administrative
Agent for filing (i) no effective UCC financing statement,
fixture filing or other instrument similar in effect covering all
or any part of the Collateral is on file in any filing or
recording office and (ii) no effective filing covering all or any
part of the IP Collateral is on file in the PTO.
o Margin Regulations. The pledge of the Pledged Collateral (as
defined in the Security Agreement) pursuant to the Collateral
Documents does not violate Regulation U or X of the Board of
Governors of the Federal Reserve System.
o Information Regarding Collateral. All written information
supplied to Agents by or on behalf of any Loan Party with respect
to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in
all material respects.
o RELATED AGREEMENTS.
o Delivery of Related Agreements. Company has delivered to Lenders
complete and correct copies of each Related Agreement and of all
exhibits and schedules thereto.
o Warranties. Subject to the qualifications set forth therein, each
of the representations and warranties given by Company,
Acquisition Co. and Scientific Games in the Merger Agreement is
true and correct in all material respects as of the Closing Date
(or as of any earlier date to which such representation and
warranty specifically relates).
o Survival. Notwithstanding anything in the Merger Agreement to the
contrary, the representations and warranties of Company set forth
in subsection 5.17B shall, solely for purposes of this Agreement,
survive the Closing Date for the benefit of Lenders.
106
o DISCLOSURE.
No representation or warranty of any Loan Party contained in any
Loan Document or in any other document, certificate or written statement
furnished to Lenders by or on behalf of Company or any of its Subsidiaries for
use in connection with the transactions contemplated by, or pursuant to, this
Agreement contains any untrue statement of a material fact or omits to state a
material fact (known to Company, in the case of any document not furnished by
it) necessary in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made. Any
projections and pro forma financial information contained in such materials are
based upon good faith estimates and assumptions believed by Company to be
reasonable at the time made, it being recognized by Lenders that such
projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results. There are no facts known (or which should upon the
reasonable exercise of diligence be known) to Company (other than matters of a
general economic nature) that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect and that have not
been disclosed herein or in such other documents, certificates and statements
furnished to Lenders for use in connection with the transactions contemplated
hereby.
o CERTAIN JURISDICTIONS.
Company and its Subsidiaries do not have any assets located in any
of (i) Trinidad and Tobago, St. Maarten, Barbados, Bermuda, Jamaica, Guyana,
Dutch West Indies, St. Kitts West, Aruba or Virgin Islands and (ii) Panama and
Mexico, except, in respect of each such jurisdiction, assets of Company and its
Subsidiaries located in such jurisdiction with an aggregate market value of not
more than (i) $10,000 and (ii) $350,000, respectively.
o COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
o FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Agents and Lenders:
o MONTHLY FINANCIALS: as soon as available and in any event within
30 days after the end of each calendar month (or, in the case of
the calendar month of October, 2000, the last calendar month of
each Fiscal Quarter and the last calendar month of each Fiscal
Year, as soon as available and in any event within 45 days after
the end of such calendar month) the consolidated and
consolidating balance sheets of Company and its Subsidiaries as
at the end of such calendar month and the related consolidated
and consolidating statements of income and cash flows of Company
and its Subsidiaries for such calendar month, all in reasonable
detail and certified by the chief financial
107
officer of Company that they fairly present, in all material
respects, the financial condition of Company and its Subsidiaries
as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments;
o QUARTERLY FINANCIALS: as soon as available and in any event
within 45 days after the end of each of the first three Fiscal
Quarters, (a) the consolidated and consolidating balance sheets
of Company and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated and consolidating statements
of income and cash flows of Company and its Subsidiaries for such
Fiscal Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, setting
forth in each case in comparative form the corresponding figures
for the corresponding dates and periods of the previous Fiscal
Year and the corresponding figures from the Financial Plan or
Revised Financial Plan, as the case may be, for the current
Fiscal Year, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments; PROVIDED that with respect to the Fiscal Quarters
ending September 30, 2000, December 31, 2000, March 31, 2001 and
June 30, 2001, Company shall not be required to set forth in
comparative form the corresponding figures for the corresponding
dates and periods of the previous Fiscal Year; PROVIDED FURTHER
that, with respect to the Fiscal Quarters ending September 30,
2000, December 31, 2000 and March 31, 2001, Company shall not be
required to deliver the consolidated and consolidating balance
sheets of Company and its Subsidiaries and the related
consolidated and consolidating statements of income and cash
flows of Company and its Subsidiaries for the period from the
beginning of the then current Fiscal Year to the end of such
Fiscal Quarter; PROVIDED STILL FURTHER, that is hereby
acknowledged and agreed that any such financial statements
delivered hereunder for any period that ends prior to the Closing
Date or includes the Closing Date shall be prepared on a Pro
Forma Basis as if the Merger had been consummated on the first
day of the Fiscal Quarter ending on September 30, 2000 and the
Merger was a Permitted Acquisition of Company and its
Subsidiaries and (b) a narrative report describing the operations
of Company and its Subsidiaries in the form prepared for
presentation to senior management for such Fiscal Quarter and for
the period from the beginning of the then current Fiscal Year to
the end of such Fiscal Quarter (it being understood and agreed
that the "Management Discussion and Analysis" contained in the
Company's quarterly report on Form 10-Q filed with the Securities
and Exchange Commission for such period shall be deemed to comply
with the foregoing requirement);
o YEAR-END FINANCIALS: as soon as available and in any event within
90 days after the end of each Fiscal Year, (a) the consolidated
and consolidating
108
balance sheets of Company and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of
Company and its Subsidiaries for such Fiscal Year, setting forth
in each case in comparative form the corresponding figures as of
the end of and for the previous Fiscal Year and the corresponding
figures from the Revised Financial Plan or Financial Plan, as the
case may be, for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief
financial officer, chief accounting officer or controller of
Company that they fairly present, in all material respects, the
financial condition of Company and its Subsidiaries as at the
dates indicated and the results of their operations and their
cash flows for the periods indicated; PROVIDED that, with respect
to the Fiscal Year ending December 31, 2000, Company shall not be
required to set forth in comparative form the corresponding
figures as of the end of and for the previous Fiscal Year, (b) a
narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Year (it being understood and agreed
that the "Management Discussion and Analysis" contained in the
Company's annual report on Form 10-K or such similar report filed
with the Securities and Exchange Commission shall be deemed to
comply with the foregoing requirement), and (c) in the case of
such consolidated financial statements, a report thereon of KPMG
Peat Marwick or other independent certified public accountants of
recognized national standing selected by Company and reasonably
satisfactory to Administrative Agent, which report shall be
unqualified, shall express no doubts about the ability of Company
and its Subsidiaries to continue as a going concern, and shall
state that such consolidated financial statements fairly present,
in all material respects, the consolidated financial condition of
Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated in conformity with GAAP applied on a basis consistent
with prior years (except as otherwise disclosed in such financial
statements) and that the examination by such accountants in
connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards;
o OFFICER'S AND COMPLIANCE CERTIFICATES: together with each
delivery of financial statements pursuant to subdivisions (ii)
and (iii) above, (a) an Officer's Certificate (provided that such
Officer's Certificate shall be executed on behalf of Company by
its president or one of its vice-presidents and by its chief
financial officer (or if there is no chief financial officer its
chief accounting officer) or its treasurer) of Company stating
that the signers have reviewed the terms of this Agreement and
the other Loan Documents and have made, or caused to be made
under their supervision, a review in reasonable detail of the
material transactions and condition of Company and its
Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the
date of such Officer's Certificate, of any condition or
109
event that constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what
action Company has taken, is taking and proposes to take with
respect thereto and (b) a Compliance Certificate demonstrating in
reasonable detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in
Section 7, in each case to the extent compliance with such
restrictions is required to be tested at the end of the
applicable accounting period;
o RECONCILIATION STATEMENTS: if, as a result of the Company's
adoption of any change in accounting principles, from those used
in the preparation of the audited financial statements referred
to in subsection 5.3, the consolidated financial statements of
Company and its Subsidiaries delivered pursuant to subdivisions
(i), (ii), (iii) or (xiii) of this subsection 6.1 will differ in
any material respect from the consolidated financial statements
that would have been delivered pursuant to such subdivisions had
no such change in accounting principles been made, then (a)
together with the first delivery of financial statements pursuant
to subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, consolidated financial statements of
Company and its Subsidiaries for (x) the current Fiscal Year to
the effective date of such change and (y) the full Fiscal Year
immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a pro forma basis as if such
change had been in effect during such periods, and (b) together
with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, a written statement of the chief
accounting officer or chief financial officer of Company setting
forth the differences (including without limitation any
differences that would affect any calculations relating to the
financial covenants set forth in subsection 7.6) which would have
resulted if such financial statements had been prepared without
giving effect to such change;
o ACCOUNTANTS' CERTIFICATION: together with each delivery of
consolidated financial statements of Company and its Subsidiaries
pursuant to subdivision (iii) above, a written statement by the
independent certified public accountants giving the report
thereon (a) stating that their audit examination has included a
review of the terms of Section 7 as they relate to accounting
matters, (b) stating whether, in connection with their audit
examination, any condition or event that constitutes an Event of
Default or Potential Event of Default has come to their attention
and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof; PROVIDED
that such accountants shall not be liable by reason of any
failure to obtain knowledge of any such Event of Default or
Potential Event of Default that would not be disclosed in the
course of their audit examination, and (c) stating that based on
their audit examination nothing has come to their attention that
causes them to believe either or both that the information
contained in the certificates delivered therewith pursuant to
subdivision (iv) above is not correct or that the matters set
forth in the Compliance Certificates delivered
110
therewith pursuant to clause (c) of subdivision (iv) above for
the applicable Fiscal Year are not stated in accordance with the
terms of this Agreement;
o ACCOUNTANTS' REPORTS: promptly upon receipt thereof (unless
restricted by applicable professional standards), copies of all
"Management Letters" submitted to Company by independent
certified public accountants in connection with each annual,
interim or special audit of the financial statements of Company
and its Subsidiaries made by such accountants, including any
comment letter submitted by such accountants to management in
connection with their annual audit;
o SEC FILINGS AND PRESS RELEASES: promptly upon their becoming
available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by
Company to its security holders or by any Subsidiary of Company
to its security holders other than Company or another Subsidiary
of Company, (b) all regular and periodic financial reports and
all registration statements (other than on Form S-8 or a similar
form) and prospectuses, if any, filed by Company or any of its
Subsidiaries with any securities exchange or with the Securities
and Exchange Commission and (c) all press releases made by
Company or any of its Subsidiaries to the public concerning
material developments in the business of Company or any of its
Subsidiaries;
o EVENTS OF DEFAULT, ETC.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default, or
becoming aware that any Lender has given any notice (other than
to Administrative Agent) or taken any other action with respect
to a claimed Event of Default or Potential Event of Default, (b)
that any Person has given any notice to Company or any of its
Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in
subsection 8.2, (c) of any condition or event that would be
required to be disclosed in a current report filed by Company
with the Securities and Exchange Commission on Form 8-K (Items 1,
2, 4, 5 and 6 of such Form as in effect on the date hereof)
whether or not Company is required to file such reports under the
Exchange Act, or (d) of the occurrence of any event or change
that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officer's Certificate
specifying the nature and period of existence of such condition,
event or change, or specifying the notice given or action taken
by any such Person and the nature of such claimed Event of
Default, Potential Event of Default, default, event or condition,
and what action Company has taken, is taking and proposes to take
with respect thereto;
o LITIGATION OR OTHER PROCEEDINGS: (a) promptly upon any officer of
Company obtaining knowledge of (X) the institution of, or
non-frivolous threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Company or any
111
of its Subsidiaries or any property of Company or any of its
Subsidiaries (collectively, "PROCEEDINGS") not previously
disclosed in writing by Company to Lenders or (Y) any material
development in any Proceeding that, in any case set forth in
clause (x) or (y):
o if adversely determined, could reasonably be expected to have
a Material Adverse Effect; or
o seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be
reasonably available to Company to enable Lenders and their respective
counsel to evaluate such matters; and (b) within twenty days after the end
of each Fiscal Quarter, a schedule of all Proceedings involving an alleged
liability of, or claims against or affecting, Company or any of its
Subsidiaries equal to or greater than $500,000, and promptly after request
by Administrative Agent such other information as may be reasonably
requested by Administrative Agent to enable Administrative Agent and its
respective counsel to evaluate any of such Proceedings;
o ERISA EVENTS: reasonably promptly upon Company becoming aware of
the occurrence of or forthcoming occurrence of any ERISA Event,
which would reasonably be expected to result in a liability to
the Company, any of its Subsidiaries or any of their respective
ERISA Affiliates in excess of $500,000, a written notice
specifying the nature thereof, what action Company, any of its
Subsidiaries or any of their respective ERISA Affiliates has
taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect
thereto;
o ERISA NOTICES: with reasonable promptness, copies of (a) all
notices received by Company, any of its Subsidiaries or (if
obtained by Company) any of their respective ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event; and
(b) copies of such other documents or governmental reports or
filings relating to any Employee Benefit Plan as Administrative
Agent shall reasonably request;
o FINANCIAL PLANS: as soon as practicable and in any event no later
than fifteen (15) days subsequent to the beginning of the Fiscal
Year ending on or about December 31, 2001 and each subsequent
Fiscal Year, a revised consolidated and consolidating plan and
financial forecast for such Fiscal Year and the next four
succeeding Fiscal Years (the "REVISED FINANCIAL PLAN" for such
Fiscal Years, it being acknowledged and agreed that each
succeeding Revised Financial Plan shall replace the immediately
preceding Financial Plan or Revised Financial Plan, as the case
may be (other than with respect to any representations,
warranties, certifications or other statements previously made as
of the date thereof with respect to such preceding Financial Plan
or Revised Financial Plan, as the case may be)), including (a) a
forecast consolidated and consolidating balance sheet and
forecast consolidated and consolidating statements of income and
cash flows of Company and its Subsidiaries for each
112
such Fiscal Year and an explanation of the assumptions on which
such forecasts are based, (b) forecast consolidated and
consolidating balance sheet and forecast consolidated and
consolidating statements of income and cash flows of Company and
its Subsidiaries for each quarter of the first such Fiscal Year,
together with PRO FORMA financial covenant calculations for such
Fiscal Year determined in a manner consistent with financial
covenant calculations shown in a Compliance Certificate and (c)
such other information and projections as Administrative Agent or
any Lender may reasonably request in writing;
o INSURANCE: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and content
satisfactory to Administrative Agent outlining all material
insurance coverage maintained as of the date of such report by
Company and its Subsidiaries and all material insurance coverage
planned to be maintained by Company and its Subsidiaries in the
immediately succeeding Fiscal Year;
o BOARD OF DIRECTORS: with reasonable promptness, written notice of
any change in the Board of Directors of Company;
o NEW SUBSIDIARIES: promptly upon any Person becoming a Subsidiary
of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of
Company and (b) all of the data required to be set forth in
SCHEDULE 5.1 annexed hereto with respect to all Subsidiaries of
Company (it being understood that such written notice shall be
deemed to supplement SCHEDULE 5.1 annexed hereto for all purposes
of this Agreement);
o UCC SEARCH REPORT: As promptly as practicable after the date of
delivery to Administrative Agent of any UCC financing statement
executed by any Loan Party pursuant to subsection 4.1H, 4.2F or
6.8A, copies of completed UCC searches evidencing the proper
filing, recording and indexing of all such UCC financing
statements and listing all other effective financing statements
that name such Loan Party as debtor, together with copies of all
such other financing statements not previously delivered to
Administrative Agent by or on behalf of Company or such Loan
Party;
o MARGIN DETERMINATION CERTIFICATE: together with each delivery of
financial statements pursuant to subdivisions (ii) and (iii)
above, a Margin Determination Certificate demonstrating in
reasonable detail the calculation of the Consolidated Leverage
Ratio for the four consecutive Fiscal Quarters ending on the last
day of the accounting period covered by such financial
statements; and
o OTHER INFORMATION: with reasonable promptness, such other
information and data with respect to Company or any of its
Subsidiaries as from time to time
113
may be reasonably requested in writing by Administrative Agent or
any Lender.
o LEGAL EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its legal existence and all rights and franchises material to its
business; PROVIDED, HOWEVER, that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
o PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
o Company will, and will cause each of its Subsidiaries to, pay all
taxes, assessments and other governmental charges imposed upon it
or any of its properties or assets or in respect of any of its
income, businesses or franchises before any penalty accrues
thereon, and all claims (including claims for labor, services,
materials and supplies) for sums that have become due and payable
and that by law have or may become a material Lien upon any of
its properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; PROVIDED that no
such charge or claim need be paid if it is being contested in
good faith by appropriate proceedings promptly instituted and
diligently conducted, so long as (1) such reserve or other
appropriate provision, if any, as shall be required in conformity
with GAAP shall have been made therefor and (2) in the case of a
charge or claim which has or may become a Lien against any of the
Collateral, such contest proceedings conclusively operate to stay
the sale of any portion of the Collateral to satisfy such charge
or claim.
o Company will not, nor will it permit any of its Subsidiaries to,
file or consent to the filing of any consolidated income tax
return with any Person (other than Company or any of its
Subsidiaries).
o MAINTENANCE OF PROPERTIES; INSURANCE; APPLICATION OF NET
INSURANCE/CONDEMNATION PROCEEDS.
o Maintenance of Properties. Company will, and will cause each of
its Subsidiaries to, maintain or cause to be maintained in good
repair, working order and condition, ordinary wear and tear
excepted, all material properties used or useful in the business
of Company and its Subsidiaries (including all Intellectual
Property) and from time to time will make or cause to be made all
repairs, renewals and replacements thereof which the Company
deems appropriate.
o Insurance. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability
insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to
liabilities, losses or damage in respect of the assets,
114
properties and businesses of Company and its Subsidiaries as may
customarily be carried or maintained under similar circumstances
by corporations of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to
self-insurance), with such deductibles, covering such risks and
otherwise on such terms and conditions as shall be customary for
corporations similarly situated in the industry. Without limiting
the generality of the foregoing, Company will maintain or cause
to be maintained (i) flood insurance with respect to each Flood
Hazard Property that is located in a community that participates
in the National Flood Insurance Program, in each case in
compliance with any applicable regulations of the Board of
Governors of the Federal Reserve System, and (ii) replacement
value casualty insurance on the Collateral under such policies of
insurance, with such insurance companies, in such amounts, with
such deductibles, and covering such risks as are at all times
satisfactory to Administrative Agent in its commercially
reasonable judgment. Each such policy of insurance shall (a) name
Administrative Agent for the benefit of Lenders as an additional
insured thereunder as its interests may appear and (b) in the
case of each business interruption and casualty insurance policy,
contain a loss payable clause or endorsement, satisfactory in
form and substance to Administrative Agent, that names
Administrative Agent for the benefit of Lenders as the loss payee
thereunder for any covered loss in excess of $2 million and
provides for at least (x) in the case of any such policies with
respect to Scientific Games and its Subsidiaries, 30 days and (y)
in the case of any such policies with respect to Company and its
Subsidiaries (other than Scientific Games and its Subsidiaries)
10 days, prior written notice to Administrative Agent of any
modification or cancellation of such policy. Company will use its
commercially reasonable efforts to cause its insurers to change
the provisions of its existing insurance policies to provide for
at least 30 days prior written notice to Administrative Agent of
any modification or cancellation of such policy in connection
with the October 31, 2000 renewal of Company's and its
Subsidiaries' insurance policies.
o Application of Net Insurance/Condemnation Proceeds.
o BUSINESS INTERRUPTION INSURANCE. Upon receipt by Company or any
of its Subsidiaries of any business interruption insurance
proceeds constituting Net Insurance/Condemnation Proceeds, (a) so
long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, Company or such Subsidiary may
retain and apply such Net Insurance/Condemnation Proceeds for
working capital purposes, and (b) if an Event of Default or
Potential Event of Default shall have occurred and be continuing,
Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds (without any deduction for
Proposed Reinvestment Proceeds) to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b);
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o CASUALTY INSURANCE/CONDEMNATION PROCEEDS. Upon receipt by Company
or any of its Subsidiaries of any Net Insurance/Condemnation
Proceeds other than from business interruption insurance, (a) so
long as no Event of Default or Potential Event of Default shall
have occurred and be continuing, Company shall, or shall cause
one or more of its Subsidiaries to, promptly and diligently apply
such Net Insurance/Condemnation Proceeds to pay or reimburse the
costs of repairing, restoring or replacing the assets in respect
of which such Net Insurance/Condemnation Proceeds were received
or, to the extent not so applied, to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b) (it being acknowledged and agreed that,
in the event that the Company fully repairs, restores or
replaces, as the case may be, the assets in respect of which such
Net Insurance/Condemnation Proceeds were received for less than
the amount of such Net Insurance/Condemnation Proceeds, Company
may retain such excess Net Insurance/Condemnation Proceeds;
PROVIDED that the amount of such excess Net
Insurance/Condemnation Proceeds retained by Company shall not
exceed $10 million in any Fiscal Year) and (b) if an Event of
Default or Potential Event of Default shall have occurred and be
continuing, Company shall apply an amount equal to such Net
Insurance/Condemnation Proceeds (without any deduction for
Proposed Reinvestment Proceeds) to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b); PROVIDED that the aggregate amount
applied by Company to pay or reimburse the costs of repairing,
restoring or replacing such assets pursuant to the foregoing
clause (a) shall not exceed $35 million for any Fiscal Year.
o NET INSURANCE/CONDEMNATION PROCEEDS RECEIVED BY ADMINISTRATIVE
AGENT. Upon receipt by Administrative Agent of any Net
Insurance/Condemnation Proceeds as loss payee, if and to the
extent Company would have been required to apply such Net
Insurance/Condemnation Proceeds (if it had received them
directly) to prepay the Loans and/or reduce the Revolving Loan
Commitments, Administrative Agent shall, and Company hereby
authorizes Administrative Agent to, apply such Net
Insurance/Condemnation Proceeds to prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) as provided in
subsection 2.4B(iii)(b), and (b) to the extent the foregoing
clause (a) does not apply and (1) the aggregate amount of such
Net Insurance/Condemnation Proceeds received (and reasonably
expected to be received) by Administrative Agent in respect of
any covered loss does not exceed $20 million, Administrative
Agent shall deliver such Net Insurance/Condemnation Proceeds to
Company, and Company shall, or shall cause one or more of its
Subsidiaries to, promptly apply such Net Insurance/Condemnation
Proceeds to the costs of repairing, restoring, or replacing the
assets in respect of which such Net Insurance/Condemnation
Proceeds were received, and (2) if the aggregate amount of Net
Insurance/Condemnation Proceeds received (and reasonably expected
to be received) by Administrative Agent in respect of any covered
loss exceeds $20 million, Administrative Agent shall hold such
Net Insurance/Condemnation
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Proceeds in the Collateral Account established under the Security
Agreement and, so long as Company or any of its Subsidiaries
proceeds diligently to repair, restore or replace the assets of
Company or such Subsidiary in respect of which such Net
Insurance/Condemnation Proceeds were received, Administrative
Agent shall from time to time disburse to Company or such
Subsidiary from the Collateral Account established under the
Security Agreement, to the extent of any such Net
Insurance/Condemnation Proceeds remaining therein in respect of
the applicable covered loss, amounts necessary to pay the cost of
such repair, restoration or replacement after the receipt by
Administrative Agent of invoices or other documentation relating
to the amount of costs so incurred and the work performed
(including, if required by Administrative Agent, lien releases
and architects' certificates); PROVIDED, HOWEVER that if at any
time Administrative Agent reasonably determines after discussion
with Company (A) that Company or such Subsidiary is not
proceeding diligently with such repair, restoration or
replacement or (B) that such repair, restoration or replacement
cannot be completed with the Net Insurance/Condemnation Proceeds
then held by Administrative Agent for such purpose, together with
funds otherwise available to Company for such purpose, or that
such repair, restoration or replacement cannot be completed
within 360 days after the receipt by Administrative Agent of such
Net Insurance/Condemnation Proceeds, Administrative Agent shall,
and Company hereby authorizes Administrative Agent, one Business
Day following Administrative Agent's sending of written notice to
Company, to apply such Net Insurance/ Condemnation Proceeds to
prepay the Loans (and/or the Revolving Loan Commitments shall be
reduced) as provided in subsection 2.4B(iii)(b); PROVIDED that
Administrative Agent's failure to provide such written notice
will not affect the right of Administrative Agent to apply such
Net Insurance/Condemnation Proceeds to prepay the Loans (and to
reduce the Revolving Loan Commitments) pursuant to this
subsection,.
o INSPECTION RIGHTS; LENDER MEETING.
o INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated
by Administrative Agent or any Lender to visit and inspect any of
the properties of Company or of any of its Subsidiaries, to
inspect, copy and take extracts from its and their financial and
accounting records, and to discuss its and their affairs,
finances and accounts with its and their officers and independent
public accountants (provided that Company may, if it so chooses,
be present at or participate in any such discussion), all upon
reasonable notice and at such reasonable times during normal
business hours and as often as may reasonably be requested.
o LENDER MEETING. Company will, upon at least thirty (30) days
prior written notice from Administrative Agent or Requisite
Lenders, participate in a meeting of Administrative Agent and
Lenders once during each Fiscal Year to be held at Company's
corporate offices (or at such other location as may be
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agreed to by Company, Administrative Agent and Requisite Lenders)
at such time as may be agreed to by Company and Administrative
Agent.
o COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries and
all other Persons on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority (including all Environmental Laws), noncompliance with
which could reasonably be expected to cause, individually or in the aggregate, a
Material Adverse Effect.
o ENVIRONMENTAL REVIEW AND INVESTIGATION, DISCLOSURE, ETC.;
COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
o ENVIRONMENTAL REVIEW AND INVESTIGATION. Company agrees that
Administrative Agent may, from time to time and in its reasonable
discretion, at Company's expense, (i) retain an independent
professional consultant to review any environmental audits,
investigations, analyses and reports relating to Hazardous
Materials prepared by or for Company and (ii) upon receipt of
information that there may exist at any Facility an environmental
matter which, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect or there may
exist at any Facility any Environmental Claims which,
individually or in the aggregate, would reasonably be expected to
result in a Material Adverse Effect, or upon the occurrence of
any Event of Default, conduct its own investigation of any
Facility; PROVIDED that, in the case of any Facility no longer
owned, leased, operated or used by Company or any of its
Subsidiaries, Company shall only be obligated to use its
reasonable good faith efforts to obtain permission for
Administrative Agent's professional consultant to conduct an
investigation of such Facility. For purposes of conducting such a
review and/or investigation, Company hereby grants to
Administrative Agent and its respective agents, employees,
consultants and contractors the right to enter into or onto any
Facilities currently owned, leased, operated or used by Company
or any of its Subsidiaries and to perform such tests on such
property (including taking samples of soil, groundwater and
suspected asbestos-containing materials) as are reasonably
necessary in connection therewith. Any such investigation of any
Facility shall be conducted, unless otherwise agreed to by
Company and Administrative Agent, during normal business hours
and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing operations at such Facility
or to cause any damage or loss to any property at such Facility.
So long as no Event of Default or Potential Event of Default has
occurred and is continuing, Administrative Agent shall provide
reasonable notice to Company prior to the inspection of any
Facility. Company and Administrative Agent hereby acknowledge and
agree that any report of any investigation conducted at the
request of Administrative Agent pursuant to this subsection 6.7A
will be obtained and shall be used by Administrative Agent and
Lenders for the purposes of Lenders' internal credit decisions,
to monitor and police the Loans and to protect Lenders' security
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interests, if any, created by the Loan Documents. Administrative
Agent agrees to deliver a copy of any such report to Company with
the understanding that Company acknowledges and agrees that (x)
it will indemnify and hold harmless Administrative Agent and each
Lender from any costs, losses or liabilities relating to
Company's use of or reliance on such report, (y) none of the
Administrative Agent or any Lender makes any representation or
warranty with respect to such report, and (z) by delivering such
report to Company, none of the Administrative Agent or any Lender
is requiring or recommending the implementation of any
suggestions or recommendations contained in such report.
o Environmental Disclosure. Company will deliver to Administrative
Agent and Lenders:
o ENVIRONMENTAL AUDITS AND REPORTS. As soon as practicable
following receipt thereof, copies of material environmental
audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, governmental
authorities or any other Persons, with respect to significant
environmental matters at any Facility which, individually or in
the aggregate, would reasonably be expected to result in a
Material Adverse Effect or with respect to any Environmental
Claims which, individually or in the aggregate, would reasonably
be expected to result in a Material Adverse Effect;
o NOTICE OF CERTAIN RELEASES, REMEDIAL ACTIONS, ETC. Promptly upon
the occurrence thereof, written notice describing in reasonable
detail (a) any Release required to be reported to any federal,
state or local governmental or regulatory agency under any
applicable Environmental Laws, (b) any remedial action taken by
Company or any other Person of which Company has knowledge in
response to (1) any Hazardous Materials Activities the existence
of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a
Material Adverse Effect, or (2) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility
of resulting in a Material Adverse Effect, and (c) Company's
discovery of any occurrence or condition on any real property
adjoining any Facility that could cause such Facility or any part
thereof to be subject to any material restrictions on the
ownership, occupancy, transferability or use thereof under any
Environmental Laws.
o WRITTEN COMMUNICATIONS REGARDING ENVIRONMENTAL CLAIMS, RELEASES,
ETC. As soon as practicable following the sending or receipt
thereof by Company or any of its Subsidiaries, a copy of any and
all written communications with respect to (a) any Environmental
Claims that, individually or in the aggregate, have a reasonable
possibility of giving rise to a Material Adverse Effect, (b) any
Release required to be reported to any federal, state or local
governmental or regulatory agency, and (c) any request for
information from any governmental agency that suggests such
agency is investigating whether
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Company or any of its Subsidiaries may be potentially responsible
for any Environmental Claim.
o NOTICE OF CERTAIN PROPOSED ACTIONS HAVING ENVIRONMENTAL IMPACT.
Prompt written notice describing in reasonable detail (a) any
proposed acquisition of stock, assets, or property by Company or
any of its Subsidiaries that could reasonably be expected to (1)
expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect or
(2) affect the ability of Company or any of its Subsidiaries to
maintain in full force and effect all material Governmental
Authorizations required under any Environmental Laws for their
respective operations and (b) any proposed action to be taken by
Company or any of its Subsidiaries to commence manufacturing or
other industrial operations or to modify current operations in a
manner that could reasonably be expected to subject Company or
any of its Subsidiaries to any additional obligations or
requirements under any Environmental Laws that would reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect.
o OTHER INFORMATION. With reasonable promptness, such other
documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters
disclosed pursuant to this subsection 6.7.
o Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
o REMEDIAL ACTIONS RELATING TO HAZARDOUS MATERIALS ACTIVITIES.
Company shall promptly undertake, and shall cause each of its
Subsidiaries promptly to undertake, any and all investigations,
studies, sampling, testing, abatement, cleanup, removal,
remediation or other response actions necessary to remove,
remediate, clean up or xxxxx any Hazardous Materials Activity on,
under or about any Facility that is required by any Governmental
Authority or that is in violation of any Environmental Laws or
that presents a material risk of giving rise to an Environmental
Claim that would reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect. In the event Company
or any of its Subsidiaries undertakes any such action with
respect to any Hazardous Materials, Company or such Subsidiary
shall conduct and complete such action in compliance with all
applicable Environmental Laws and in accordance with the
policies, orders and directives of all federal, state and local
governmental authorities except when, and only to the extent
that, Company's or such Subsidiary's liability with respect to
such Hazardous Materials Activity is being contested in good
faith by Company or such Subsidiary.
o ACTIONS WITH RESPECT TO ENVIRONMENTAL CLAIMS AND VIOLATIONS OF
ENVIRONMENTAL LAWS. Company shall promptly take, and shall cause
each of
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its Subsidiaries promptly to take, any and all actions necessary
to (a) cure any violation of applicable Environmental Laws by
Company or its Subsidiaries that would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect
and (b) make an appropriate response to any Environmental Claim
against Company or any of its Subsidiaries and discharge any
obligations it may have to any Person thereunder where failure to
do so would reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
o EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES AND FUTURE SUBSIDIARIES; IP
COLLATERAL.
o Execution of Subsidiary Guaranty and Personal Property Collateral
Documents. In the event that any Person (other than an Inactive
Subsidiary) becomes a wholly-owned Domestic Subsidiary after the
Closing Date, Company will promptly notify Administrative Agent
of that fact and (i) Company or the applicable Subsidiary
Guarantor shall execute and deliver to Administrative Agent a
Pledge Amendment (as defined in the Security Agreement) to the
Security Agreement pledging all of the stock of such wholly-owned
Domestic Subsidiary owned by Company or such Subsidiary Guarantor
and (ii) cause such wholly-owned Domestic Subsidiary to execute
and deliver to Administrative Agent a counterpart of the
Subsidiary Guaranty and, as applicable, a Pledge Amendment and
Additional Mortgages (as defined in subsection 6.9) and to take
all such further actions and execute all such further documents
and instruments (including actions, documents and instruments
comparable to those described in subsection 4.1H) as may be
necessary or, in the reasonable opinion of Administrative Agent,
desirable to create in favor of Administrative Agent, for the
benefit of Lenders, a valid and perfected First Priority Lien on
all of the personal and mixed property assets of such
wholly-owned Domestic Subsidiary described in the applicable
forms of Collateral Documents.
o Execution of Future Foreign Subsidiary Guaranty and Collateral
Documents. In the event that any Person (other than an Inactive
Subsidiary) becomes a Foreign Subsidiary that is directly owned
by Company after the Closing Date, Company will promptly notify
Administrative Agent of that fact and Company or the applicable
Subsidiary Guarantor will execute a Pledge Amendment (as defined
in the Security Agreement) to the Security Agreement pledging not
less than 65% (66% in the case of any Foreign Subsidiary
organized under the laws of France or any political subdivision
thereof) of the stock of such Foreign Subsidiary. In the event
that U.S. tax laws and/or any other applicable laws in foreign
jurisdictions, as the case may be, are amended to permit a
Foreign Subsidiary to guarantee the Loans without the incurrence
of an investment in U.S. property or other deemed dividends for
U.S. tax purposes or without otherwise resulting in U.S. taxable
income or without otherwise violating any other applicable laws
in foreign jurisdictions,
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Company will promptly notify Administrative Agent of that fact
and Company or the applicable Subsidiary Guarantor will execute
Pledge Amendments to the Security Agreement pledging not less
than 100% of the stock of its wholly-owned Foreign Subsidiaries
(other than Inactive Subsidiaries) and Company will cause its
Foreign Subsidiaries (other than Inactive Subsidiaries) to
execute and deliver to Administrative Agent a counterpart of the
Subsidiary Guaranty and the Security Agreement and Additional
Mortgages, as applicable, and to take all such further action and
execute all such further documents and instruments as may be
reasonably required to grant and perfect in favor of
Administrative Agent, for the benefit of Lenders, a First
Priority security interest in all of the personal and mixed
property assets of such Subsidiary described in the applicable
Collateral Documents.
o Subsidiary Charter Documents, Legal Opinions, Etc. Company shall
deliver to Administrative Agent, together with such Loan
Documents, (i) certified copies of the applicable Subsidiary's
Certificate or Articles of Incorporation, together with a good
standing certificate from the Secretary of State of the
jurisdiction of its incorporation and each other state in which
such Person is qualified as a foreign corporation to do business
and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing authority
of each of such jurisdictions, each to be dated a recent date
prior to their delivery to Administrative Agent, (ii) a copy of
such Subsidiary's Bylaws certified by its secretary or an
assistant secretary as of a recent date prior to their delivery
to Administrative Agent, (iii) a certificate executed by the
secretary or an assistant secretary of such Subsidiary as to (a)
the fact that the attached resolutions of the Board of Directors
of such Subsidiary approving and authorizing the execution,
delivery and performance of such Loan Documents are in full force
and effect and have not been modified or amended and (b) the
incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents, and (iv) if required by the
Administrative Agent, a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Administrative
Agent and its counsel, as to (a) the due organization and good
standing of such Subsidiary, (b) the due authorization, execution
and delivery by such Subsidiary of such Loan Documents, (c) the
enforceability of such Loan Documents against such Subsidiary,
(d) such other matters (including matters relating to the
creation and perfection of Liens in any Collateral pursuant to
such Loan Documents) as Administrative Agent may reasonably
request, all of the foregoing to be satisfactory in form and
substance to Administrative Agent and its counsel.
o Pledge of Foreign Subsidiary Stock. To the extent not otherwise
satisfied on the Closing Date with respect to Company's Foreign
Subsidiaries, no later than 120 days after the Closing Date,
Company shall, and shall cause each of its Subsidiary Guarantors
owning direct Foreign Subsidiaries to, deliver to Administrative
Agent such Pledge Amendments or other similar documents
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executed with respect to the capital stock of each such Foreign
Subsidiary (other than Inactive Subsidiaries) and to deliver such
stock certificates or such other related documents or instruments
as shall grant to Administrative Agent a perfected First Priority
Lien on such capital stock, all in form and substance reasonably
satisfactory to Administrative Agent.
o LEASEHOLD PROPERTIES; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL; CERTAIN OPINIONS; REMOVAL OF LIENS.
o LEASEHOLD PROPERTIES.
To the extent not otherwise satisfied on the Closing Date with respect to
Company and its Subsidiaries, each of Company and each applicable Subsidiary
Guarantor shall use its reasonable good faith best efforts (without requiring
Company or such Subsidiary Guarantor to relinquish any material rights or incur
any material obligations or to expend more than a nominal amount of money as
well as reasonable attorneys' fees incurred by (x) the landlord under the
applicable lease, (y) Administrative Agent and (z) Company or such Subsidiary
Guarantor) to:
o LANDLORD CONSENTS AND ESTOPPELS; RECORDED LEASEHOLD INTERESTS.
Deliver to Administrative Agent no later than 45 days after the
Closing Date, in the case of each Material Leasehold Property of
Company or its Subsidiary Guarantors existing as of the Closing
Date, (a) a Landlord Consent and Estoppel with respect thereto
and (b) evidence that such Material Leasehold Property is a
Recorded Leasehold Interest;
(ii) COLLATERAL ACCESS AGREEMENTS. Deliver to Administrative Agent
no later than 45 days after the Closing Date, in the case of each
Leasehold Property of Company or its Subsidiary Guarantors existing as of
the Closing Date designated by Administrative Agent, a Collateral Access
Agreement with respect thereto and in the event that any landlord party to
a Collateral Access Agreement requests an estoppel certificate regarding
such Leasehold Property, Company or the applicable Subsidiary Guarantor
will include a description of such Collateral Access Agreement in such
estoppel certificate; and
(iii) CONFORMING LEASEHOLD INTERESTS. If Company or any of its
Subsidiary Guarantors acquires any Material Leasehold Property after the
Closing Date, Company shall, or shall cause such Subsidiary to, use its
reasonable good faith best efforts (without requiring Company or such
Subsidiary to relinquish any material rights or incur any material
obligations or to expend more than a nominal amount of money as well as
reasonable attorneys' fees incurred by (x) the landlord under the
applicable lease, (y) Administrative Agent and (z) Company or such
Subsidiary) to cause such Material Leasehold Property to be a Conforming
Leasehold Interest.
o ADDITIONAL MORTGAGES, ETC. From and after the Closing Date, in
the event that (i) Company or any Subsidiary Guarantor acquires
any fee interest in real property having a fair market value in
excess of $1 million or any Material Leasehold Property or (ii)
at the time any Person becomes a Subsidiary Guarantor, such
Person owns or holds any fee interest in real property or any
Material Leasehold Property, in either case excluding any such
Real Property
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Asset the encumbrancing of which requires the consent of any
applicable lessor or (in the case of clause (ii) above)
then-existing senior lienholder, where Company and its
Subsidiaries are unable to obtain such lessor's or senior
lienholder's consent or (iii) Company or any Subsidiary Guarantor
acquires a leasehold interest in the property presently occupied
by Company or any Subsidiary and located at 000 Xxxxxxxx Xxxx,
Xxxxxx, Xxxxxxxx (any such non-excluded Real Property Asset
described in the foregoing clause (i) or (ii) or (iii) being an
"ADDITIONAL MORTGAGED PROPERTY"), Company or such Subsidiary
Guarantor shall deliver to Administrative Agent, as soon as
practicable after such Person acquires such Additional Mortgaged
Property or becomes a Subsidiary Guarantor, as the case may be,
the following:
o ADDITIONAL MORTGAGE. A fully executed and notarized Mortgage (an
"ADDITIONAL MORTGAGE"), duly recorded in all appropriate places
in all applicable jurisdictions, encumbering the interest of such
Loan Party in such Additional Mortgaged Property;
o OPINIONS OF COUNSEL. If reasonably required by Administrative
Agent, (a) a favorable opinion of counsel to such Loan Party, in
form and substance satisfactory to Administrative Agent and its
counsel, as to the due authorization, execution and delivery by
such Loan Party of such Additional Mortgage and such other
matters as Administrative Agent may reasonably request, and (b)
an opinion of counsel (which counsel shall be reasonably
satisfactory to Administrative Agent) in the state in which such
Additional Mortgaged Property is located with respect to the
enforceability of the form of Additional Mortgage recorded in
such state and such other matters (including any matters governed
by the laws of such state regarding personal property security
interests in respect of any Collateral) as Administrative Agent
may reasonably request, in each case in form and substance
reasonably satisfactory to Administrative Agent;
o LANDLORD CONSENT AND ESTOPPEL; RECORDED LEASEHOLD INTEREST. In
the case of an Additional Mortgaged Property consisting of a
Material Leasehold Property, after using reasonable good faith
best efforts (without requiring Company or such Subsidiary
Guarantor to relinquish any material rights or incur any material
obligations or to expend more than a nominal amount of money as
well as reasonable attorneys' fees incurred by (i) the landlord
under the applicable lease, (ii) Administrative Agent and (iii)
Company or such Subsidiary Guarantor) to obtain the following:
(a) a Landlord Consent and Estoppel, unless Company or such
Subsidiary Guarantor is unable to obtain the Landlord Consent and
Estoppel and (b) evidence that such Material Leasehold Property
is a Recorded Leasehold Interest, and in the case of the property
located at 100 Bellevue Road, Newark, Delaware, (c) a Landlord
Consent and Estoppel and (d) evidence that such Material
Leasehold Property is a Recorded Leasehold Interest;
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o TITLE INSURANCE. (a) If required by Administrative Agent, an ALTA
mortgagee title insurance policy or an unconditional commitment
therefor (an "ADDITIONAL MORTGAGE POLICY") issued by the Title
Company with respect to such Additional Mortgaged Property, in an
amount reasonably satisfactory to Administrative Agent, insuring
fee simple title to, or a valid leasehold interest in, such
Additional Mortgaged Property vested in such Loan Party and
assuring Administrative Agent that such Additional Mortgage
creates a valid and enforceable First Priority mortgage Lien on
such Additional Mortgaged Property, which Additional Mortgage
Policy (1) shall include, if available in the state in which such
Mortgaged Property is located, a lender's aggregation
endorsement, an endorsement for future advances under this
Agreement and for any other matters reasonably requested by
Administrative Agent and (2) shall provide for affirmative
insurance and such reinsurance as Administrative Agent may
reasonably request, all of the foregoing in form and substance
reasonably satisfactory to Administrative Agent; and (b) evidence
reasonably satisfactory to Administrative Agent that such Loan
Party has (i) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the
issuance of the Additional Mortgage Policy and (ii) paid to the
Title Company or to the appropriate governmental authorities all
expenses and premiums of the Title Company in connection with the
issuance of the Additional Mortgage Policy and all recording and
stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the
Additional Mortgage in the appropriate real estate records;
o TITLE REPORT. If no Additional Mortgage Policy is required with
respect to such Additional Mortgaged Property, a title report
issued by the Title Company with respect thereto, dated not more
than 30 days prior to the date such Additional Mortgage is to be
recorded and reasonably satisfactory in form and substance to
Administrative Agent;
o COPIES OF DOCUMENTS RELATING TO TITLE EXCEPTIONS. Copies of all
recorded documents listed as exceptions to title or otherwise
referred to in the Additional Mortgage Policy or title report
delivered pursuant to clause (iv) or (v) above;
o MATTERS RELATING TO FLOOD HAZARD PROPERTIES. (a) Evidence, which
may be in the form of a letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged
Property is a Flood Hazard Property and (2) if so, whether the
community in which such Flood Hazard Property is located is
participating in the National Flood Insurance Program, (b) if
such Additional Mortgaged Property is a Flood Hazard Property,
such Loan Party's written acknowledgement of receipt of written
notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to
whether the community in which such Flood Hazard Property is
located is participating in the National Flood Insurance Program,
and (c) in the event such Additional Mortgaged Property is a
Flood
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Hazard Property that is located in a community that participates
in the National Flood Insurance Program, evidence that Company
has obtained flood insurance in respect of such Flood Hazard
Property to the extent required under the applicable regulations
of the Board of Governors of the Federal Reserve System; and
o SURVEYS. ALTA surveys of each Additional Mortgaged Property
satisfactory in form and substance to the Administrative Agent
and the Title Company reasonably current and certified to
Administrative Agent and Title Company by a licensed surveyor.
o ENVIRONMENTAL AUDIT. If required by Administrative Agent, reports
and other information, in form, scope and substance satisfactory
to Administrative Agent and prepared by environmental consultants
satisfactory to Administrative Agent, concerning any
environmental hazards or liabilities to which Company or any of
its Subsidiaries may be subject with respect to such Additional
Mortgaged Property.
o REAL ESTATE APPRAISALS. Company shall, and shall cause each of
its Subsidiary Guarantors to, permit an independent real estate
appraiser satisfactory to Administrative Agent, upon reasonable
notice, to visit and inspect any Additional Mortgaged Property
for the purpose of preparing an appraisal of such Additional
Mortgaged Property satisfying the requirements of any applicable
laws and regulations (in each case to the extent required under
such laws and regulations as determined by Administrative Agent
in its discretion). Any such inspection of any Additional
Mortgaged Property shall be conducted, unless otherwise agreed to
by Company and Administrative Agent, during normal business hours
and, to the extent reasonably practicable, shall be conducted so
as not to interfere with the ongoing business operations at such
Additional Mortgaged Property.
o SURVEYS. To the extent not otherwise satisfied on the Closing
Date with respect to Company and its Subsidiaries, Company and
each Subsidiary Guarantor, as applicable, shall (a) no later than
forty-five (45) days after the Closing Date, deliver or cause to
be delivered to Administrative Agent a survey for each of the
Mortgaged Properties, in the form more specifically described in
subsection 4.1G(vi), (b) no later than fifteen (15) days after
the delivery of such surveys to Administrative Agent, cause the
Title Company to issue endorsements removing the standard survey
exception (the "SURVEY ENDORSEMENTS") from the appropriate
Closing Date Mortgage Policies, (c) pay to the Title Company all
costs associated with the issuance of such Survey Endorsements
and (d) in the event Administrative Agent determined not to
record a Mortgage against one or more Mortgaged Properties on the
Closing Date, because the survey for such Mortgaged Property was
not available, Company shall deliver such Mortgage no later than
forty-five (45) days after the Closing Date.
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o REMOVAL OF LIENS. With respect to those Liens set forth on
SCHEDULE 5.5 annexed hereto, Company shall cause such Liens to be
released of record within 15 days of the Closing Date for Closing
Date Mortgaged Properties (as such term is defined in subsection
4.1G); PROVIDED that Company may satisfy such requirement by
causing Title Company to issue an endorsement to the Closing Date
Mortgage Policy (as such term is defined in subsection 4.1G)
removing the Liens set forth on said SCHEDULE 5.5 as an exception
to such title policies within the periods set forth herein for
removal of such Liens.
o ADDITIONAL COLLATERAL ACCESS AGREEMENTS. From and after the
Closing Date, in the event that Company or any Subsidiary
Guarantor acquires a Leasehold Property in which Collateral is
located, Company shall inform Administrative Agent and, upon
Administrative Agent's request, shall use its commercially
reasonable efforts to promptly deliver to Administrative Agent a
Collateral Access Agreement for such Leasehold Property.
o INTEREST RATE PROTECTION.
Within 120 days after the Closing Date, Company shall obtain and
shall thereafter maintain in effect for a period of not less than two years
after the Merger Date one or more Interest Rate Agreements with respect to the
Term Loans, in an aggregate notional principal amount of not less than 50% of
the Term Loans outstanding on the Closing Date, each such Interest Agreement to
be in form and substance reasonably satisfactory to Administrative Agent.
o FISCAL YEAR.
On or before December 31, 2000, Company shall change its Fiscal Year-end
from October 31 of each calendar year to December 31 of each calendar year.
o CONNECTICUT LOTTERY CORPORATION.
Company hereby agrees to use its commercially reasonable efforts to
procure within 60 days of the Restatement Effective Date an agreement by and
among Company, the Connecticut Lottery Corporation ("CLC") and Administrative
Agent substantially similar to that certain Agreement dated as of May 22, 1998
by and among CLC, Company, Autotote Lottery Corporation and Xxxxxx Financial
Inc. and otherwise reasonably satisfactory in form and substance to
Administrative Agent.
o DELISTING.
On or before the second Business Day following the Closing Date, Company
shall cause appropriate documents to delist the Scientific Games Common Stock to
be filed with the New York Stock Exchange and the SEC.
o COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other
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Obligations and the cancellation or expiration of all Letters of Credit, unless
Requisite Lenders shall otherwise give prior written consent, Company shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 7.
o INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
o Company may become and remain liable with respect to the
Obligations;
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4
and, upon any obligations actually arising pursuant thereto, the
Indebtedness corresponding to the Contingent Obligations so
extinguished;
o Company and its Subsidiaries may become and remain liable with
respect to (x) Purchase Money Indebtedness and (y) Indebtedness
in respect of Capital Leases entered into after the Closing Date
and incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of
property, plant or equipment used in the business of the Company
or its Subsidiaries; PROVIDED that the aggregate amount of such
Purchase Money Indebtedness and Indebtedness incurred in respect
of such Capital Leases, in each case incurred for the purpose of
financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment used
in the business of the Company or its Subsidiaries, does not
exceed $20 million at any time outstanding;
o Company may become and remain liable with respect to Indebtedness
to any of its Subsidiary Guarantors and any of its Foreign
Subsidiaries, and any Subsidiary Guarantor may become and remain
liable with respect to Indebtedness to Company or any other
Subsidiary Guarantor or any Foreign Subsidiary and any Foreign
Subsidiary may become and remain liable with respect to
Indebtedness (A) to Company or any Subsidiary Guarantor to the
extent that such Indebtedness is a permitted Investment by
Company or such Subsidiary Guarantor under subsection 7.3(viii)
or subsection 7.3(v) and (B) to any other Foreign Subsidiary to
the extent that such Indebtedness is a permitted Investment by
such Foreign Subsidiary under subsection 7.3(viii); PROVIDED that
(a) all such intercompany Indebtedness shall be evidenced by
promissory notes; (b) all such intercompany Indebtedness owed by
Company to any of its Subsidiaries shall be subordinated in right
of payment to the payment in full of the Obligations pursuant to
the terms of the applicable promissory notes or an intercompany
subordination agreement, and (c) any payment by any Subsidiary of
Company under any guaranty of the Obligations shall result in a
PRO TANTO reduction of the amount of any
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intercompany Indebtedness owed by such Subsidiary to Company or
to any of its Subsidiaries for whose benefit such payment is
made;
o Company and its Subsidiaries, as applicable, may remain liable
with respect to Indebtedness and Indebtedness in respect of
Capital Leases, in each case, existing as of the Closing Date and
described in SCHEDULE 7.1 annexed hereto; PROVIDED that the
aggregate amount of such Indebtedness does not exceed $2.5
million at any time outstanding;
o Company may become and remain liable with respect to Indebtedness
evidenced by the Senior Subordinated Notes in an aggregate
principal amount which does not exceed $150 million on the
Closing Date;
o Intentionally Omitted
o Intentionally Omitted
o Company and its Domestic Subsidiaries may become and remain
liable with respect to other Indebtedness, and Contingent
Obligations permitted under subsection 7.4(x), in an aggregate
amount not to exceed $20 million at any time outstanding;
o Scientific Games International Limited ("SGIL") may become and
remain liable with respect to Indebtedness in respect of mortgage
financing of the land and improvements comprising the UK Property
and any equipment located at the UK Property, including costs,
fees and expenses related to such mortgage financing; PROVIDED
that the aggregate amount of such Indebtedness shall not exceed
$20 million at any time outstanding; PROVIDED, FURTHER that (x)
the recourse of the lenders with respect to such Indebtedness is
limited solely to the land and improvements comprising the U.K.
Property and any equipment located at the UK Property without
further recourse to any of Company or any of its Subsidiaries
(including SGIL) or any other asset of any of Company or any of
its Subsidiaries (including SGIL), and (y) Company shall make
prepayments pursuant to subsection 2.4B(iii)(d) in an amount
equal to the Net Debt Securities Proceeds received by Company and
its Subsidiaries in connection with the incurrence of such
Indebtedness, which shall be applied to prepay the Loans as
provided in subsection 2.4B(iii)(d);
o Company's Foreign Subsidiaries may become and remain liable with
respect to other Indebtedness, and Contingent Obligations
permitted under subsection 7.4(xi), in an aggregate amount not to
exceed $10 million at any time outstanding; PROVIDED that, other
than the Company's guarantee of the obligations of Scientific
Games International Limited, any such Indebtedness is
non-recourse to Company and its Domestic Subsidiaries; and
o Company and its Subsidiaries, as applicable, may become and
remain liable with respect to Indebtedness which refinances the
Indebtedness described in clause (v) of this subsection 7.1;
PROVIDED that (x) such refinancing
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Indebtedness shall be incurred by Company or the applicable
Subsidiary, as the case may be, that incurred the Indebtedness
described in clause (v) of this subsection 7.1 that is being
refinanced, (y) the maturity date of such refinancing
Indebtedness shall be later than the maturity date of the
Indebtedness described in clause (v) of this subsection 7.1 that
is being refinanced and (z) the aggregate principal amount of
such refinancing Indebtedness shall be less than the lesser of
(1) the sum of the aggregate principal amount of Indebtedness
being refinanced as of the date of such refinancing PLUS all
related costs, fees and expenses related to the refinancing and
(2) the aggregate principal amount of such Indebtedness as of the
Closing Date.
o LIENS AND RELATED MATTERS.
o Prohibition on Liens. Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any
property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company
or any of its Subsidiaries, whether now owned or hereafter
acquired, or any income or profits therefrom, or file or permit
the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any
such property, asset, income or profits under the UCC of any
State or under any similar recording or notice statute, except:
o Permitted Encumbrances;
o Liens granted pursuant to the Collateral Documents;
o Liens described in SCHEDULE 7.2 annexed hereto;
o Liens securing Indebtedness permitted under subsection 7.1(iii)
with respect to the property or assets (and the proceeds thereof)
financed by such Indebtedness;
o Liens securing Indebtedness incurred by a Foreign Subsidiary
under (X) subsection 7.1(xi) and encumbering only the assets of
such Foreign Subsidiary and (Y) subsection 7.1(x) and encumbering
only the UK Property and any equipment located at the UK
Property;
o Liens securing Indebtedness permitted by subsection 7.1(ix) in an
aggregate amount not to exceed $10 million at any time
outstanding; and
o Liens securing Indebtedness permitted by subsection 7.1(xii),
solely to the extent such Liens replace Liens set forth in
SCHEDULE 7.2 annexed hereto with respect to the Indebtedness
permitted by subsection 7.1(v) that is being refinanced by the
Indebtedness permitted by subsection 7.1(xii).
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o Equitable Lien in Favor of Lenders. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired,
other than Liens excepted by the provisions of subsection 7.2A,
it shall make or cause to be made effective provision whereby the
Obligations will be secured by such Lien equally and ratably with
any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; PROVIDED that,
notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or
assumption of any such Lien not permitted by the provisions of
subsection 7.2A or as a waiver of any Event of Default or
Potential Event of Default; and PROVIDED FURTHER that Company
shall under no circumstances be required to make or cause to be
made effective provision whereby the Obligations will be secured,
directly or indirectly, by Margin Stock.
o No Further Negative Pledges. Except with respect to specific
property encumbered to secure payment of particular Indebtedness
or to be sold pursuant to an executed agreement with respect to
an Asset Sale or held in respect of Capital Leases permitted
pursuant to subsection 7.1(iii), neither Company nor any of its
Subsidiaries shall enter into any agreement (other than (x) the
Senior Subordinated Note Indenture and (y) an agreement
prohibiting only the creation of Liens securing Subordinated
Indebtedness) prohibiting the creation or assumption of any Lien
upon any of its properties or assets, whether now owned or
hereafter acquired; provided that the foregoing shall not
preclude Company and its Subsidiaries from entering into:
o agreements with governmental authorities prohibiting the creation
or assumption of any Lien on assets located in the jurisdiction of any such
governmental authority and utilized pursuant to the applicable agreement, (i) to
the extent existing on the Closing Date, as set forth in SCHEDULE 7.2C(A), and
(ii) to the extent such agreements are entered into after the Closing Date, at
the time any such agreement is entered into, the aggregate value of such assets
subject to such prohibitions, together with the aggregate value of any such
assets subject to the encumbrances and restrictions permitted by subsection
7.2D(a)(ii), in each case as set forth on the most recent consolidated balance
sheet of Company and its Subsidiaries in accordance with GAAP, shall not exceed
5% of the aggregate value of all assets set forth on the most recent
consolidated balance sheet of Company and its Subsidiaries in accordance with
GAAP;
o (A) agreements containing customary provisions restricting (1) the
subletting or assignment of any lease or (2) the transfer of copyrighted or
patented materials, (B) agreements containing provisions that restrict the
assignment of such agreements or rights thereunder; PROVIDED that payments
received or to be received pursuant to such agreements shall be subject to the
Liens securing the Obligations or (C) customary provisions contained in the
terms of any shares, interests, participations or other equivalents of corporate
stock of any Subsidiary of Company that is a corporation or any partnership,
limited liability company or other equity interests of any Subsidiary of Company
that is not a corporation (hereinafter "EQUITY INTERESTS") restricting the
payment of dividends and the making of distributions on
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Equity Interests, in each case described in this clause (C) solely to the extent
set forth in SCHEDULE 7.2D(C);
o agreements or instruments governing Indebtedness permitted by
subsection 7.1(xi) prohibiting the creation or assumption of any Lien on assets
or properties of the Foreign Subsidiary incurring such Indebtedness; PROVIDED
that the projected Consolidated EBITDA attributable to the Foreign Subsidiary
incurring such Indebtedness and any of its Subsidiaries in any Fiscal Year (as
set forth in the Financial Plan or Revised Financial Plan, as the case may be,
for such Fiscal Year) shall not exceed 5% of the aggregate projected
Consolidated EBITDA of Company and its Subsidiaries in such Fiscal Year (as set
forth in the Financial Plan or Revised Financial Plan, as the case may be, for
such Fiscal Year); PROVIDED FURTHER that, in the event that the Foreign
Subsidiary incurring such Indebtedness was not included in the Financial Plan or
Revised Financial Plan, as the case may be, for such Fiscal Year because such
Foreign Subsidiary was not a Subsidiary of Company at the time such Financial
Plan or Revised Financial Plan, as the case may be, was prepared, for purposes
of the preceding proviso the projected Consolidated EBITDA attributable to such
Foreign Subsidiary and its Subsidiaries for such Fiscal Year shall be deemed to
be the projected Consolidated EBITDA of such Foreign Subsidiary and its
Subsidiaries for the twelve months immediately succeeding the incurrence of such
Indebtedness as detailed in an Officer's Certificate in form and substance
reasonably acceptable to Administrative Agent delivered to Administrative Agent
prior to the incurrence of such Indebtedness;
o restrictions on the transfer of assets subject to any Lien
permitted under this subsection 7.2 to the extent imposed by the agreements
creating such Liens;
o agreements containing customary rights of first refusal with
respect to Company's and its Subsidiaries' interests in their respective non
wholly-owned Subsidiaries and Joint Ventures; provided that any such agreements
existing on the Closing Date are set forth in SCHEDULE 7.2C(E);
o applicable law to the extent restricting the transfer of assets;
and
o agreements (other than agreements referred to in clause (a) above)
prohibiting the creation or assumption of any Lien on assets utilized pursuant
to such agreement solely to the extent set forth in Schedule 7.2C(g).
o No Restrictions on Subsidiary Distributions to Company or Other
Subsidiaries. Except as provided herein, Company will not, and
will not permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such
Subsidiary to (i) pay dividends or make any other distributions
on any of such Subsidiary's capital stock owned by Company or any
other Subsidiary of Company (other than any such restrictions
imposed by applicable law), (ii) repay or prepay any Indebtedness
owed by such Subsidiary to Company or any other Subsidiary of
Company (other than any such restrictions imposed by applicable
foreign law with respect to the repayment or prepayment of
Indebtedness owed to or by a Foreign
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Subsidiary), (iii) make loans or advances to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or
assets to Company or any other Subsidiary of Company, except for
such consensual encumbrances or restrictions to the extent
arising pursuant to:
o agreements with governmental authorities containing a consensual
encumbrance or restriction on the ability of any Subsidiary of Company to
transfer any of its assets located in the jurisdiction of any such governmental
authority and utilized pursuant to the applicable agreement to Company or any
other Subsidiary of Company (i) to the extent existing on the Closing Date, as
set forth on SCHEDULE 7.2D(A), and (ii) to the extent such agreements are
entered into after the Closing Date, at the time any such agreement is entered
into, the aggregate value of such assets subject to such encumbrances or
restrictions, together with the aggregate value of any such assets subject to
the prohibitions permitted by subsection 7.2C(a)(ii), in each case as set forth
on the most recent consolidated balance sheet of Company and its Subsidiaries in
accordance with GAAP, shall not exceed 5% of the aggregate value of all assets
set forth on the most recent consolidated balance sheet of Company and its
Subsidiaries in accordance with GAAP;
o the Senior Subordinated Notes, the Senior Subordinated Note
Indenture or any guarantee thereof;
o (A) solely with respect to clause (iv) above, agreements
containing customary provisions restricting (1) the subletting or assignment of
any lease or (2) the transfer of copyrighted or patented materials, (B) solely
with respect to clause (iv) above, provisions in agreements that restrict the
assignment of such agreements or rights thereunder; PROVIDED that payments
received or to be received pursuant to such agreements shall be subject to the
Liens securing the Obligations or (C) solely with respect to clause (i) above,
customary provisions contained in the terms of any equity interests restricting
the payment of dividends and the making of distributions on Equity Interests, in
each case solely to the extent set forth in SCHEDULE 7.2D(C);
o any agreement or instrument governing Indebtedness permitted by
subsection 7.1(xi) containing any consensual encumbrance or restriction on the
ability of the Foreign Subsidiary incurring such Indebtedness to (i) pay
dividends or make any other distributions on any of such Foreign Subsidiary's
capital stock or (ii) transfer any of its property or assets to Company or any
other Subsidiary of Company; PROVIDED that the projected Consolidated EBITDA
attributable to the Foreign Subsidiary incurring such Indebtedness and any of
its Subsidiaries in any Fiscal Year (as set forth in the Financial Plan or
Revised Financial Plan, as the case may be, for such Fiscal Year) shall not
exceed 5% of the aggregate projected Consolidated EBITDA of Company and its
Subsidiaries in such Fiscal Year (as set forth in the Financial Plan or Revised
Financial Plan, as the case may be, for such Fiscal Year); PROVIDED FURTHER
that, in the event that the Foreign Subsidiary incurring such Indebtedness was
not included in the Financial Plan or Revised Financial Plan, as the case may
be, for such Fiscal Year because such Foreign Subsidiary was not a Subsidiary of
Company at the time such Financial Plan or Revised Financial Plan, as the case
may be, was prepared, for purposes of the preceding proviso the projected
Consolidated EBITDA attributable to such Foreign Subsidiary and its Subsidiaries
for such Fiscal Year shall be deemed to be the projected Consolidated
133
EBITDA of such Foreign Subsidiary and its Subsidiaries for the twelve months
immediately succeeding the incurrence of such Indebtedness as detailed in an
Officer's Certificate in form and substance reasonably acceptable to
Administrative Agent delivered to Administrative Agent prior to the incurrence
of such Indebtedness;
o solely with respect to clause (iv) above, restrictions on the
transfer of assets subject to any Liens permitted under this subsection 7.2 to
the extent imposed by the agreements creating such Liens;
o solely with respect to clause (iv) above, restrictions imposed by
any executed agreement with respect to an Asset Sale not in violation of this
Agreement with respect to the transfer of the assets to be sold in such Asset
Sale; and
o customary rights of first refusal with respect to Company's and
its Subsidiaries' interests in their respective non-wholly owned Subsidiaries
and Joint Ventures; provided that any such agreements existing on the Closing
Date are set forth in SCHEDULE 7.2C(E).
o INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
o Company and its Subsidiaries may make and own Investments in Cash
Equivalents;
o Company and its Subsidiaries may continue to own the Investments
owned by them as of the Closing Date in any Subsidiaries of
Company;
o Company and Subsidiary Guarantors may make Investments in
Subsidiary Guarantors and Subsidiaries of Company may make
Investments in Company;
o Company and its Subsidiaries may make (x) Consolidated Capital
Expenditures permitted by subsection 7.8 and (y) Consolidated
Capital Software Expenditures permitted by subsection 7.16;
o Company and its Subsidiaries may continue to own the Investments
owned by them as of the Closing Date and described in SCHEDULE
7.3 annexed hereto;
o Company and its Subsidiaries may make and own Investments in
Permitted Acquisitions permitted under subsection 7.7(vii);
o Company and its Subsidiaries may hold non-cash consideration
consisting of promissory notes received in connection with Asset
Sales permitted under subsection 7.7(viii) so long as the
aggregate principal amount of all such promissory notes does not
exceed $15 million at any time outstanding (determined without
regard to any write-downs or write-offs thereof);
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o Company and its Subsidiaries may make and own Investments in
Foreign Subsidiaries in an aggregate amount not to exceed $15
million at any time outstanding; provided that in the event that
any of Company or any of its Subsidiaries has an Investment in a
Foreign Subsidiary that is solely a holding company with no
material assets, liabilities or operations ("FOREIGN HOLDCO")
other than an equity Investment in another Foreign Subsidiary
that is a direct subsidiary of Foreign Holdco, Company's or such
Subsidiary's equity Investment in Foreign Holdco will not be
counted for purposes of the $15 million amount permitted by this
subsection 7.3(viii) to the extent such equity Investment in
Foreign Holdco is equal to or less than the equity Investment of
Foreign Holdco in such other Foreign Subsidiary;
o Company and its Subsidiaries may make and own Investments in
Joint Ventures and non-wholly owned Subsidiaries in an aggregate
amount not to exceed $15 million at any time outstanding;
o Company and its Subsidiaries may make and own other Investments
in an aggregate amount not to exceed $5 million at any time
outstanding; and
o So long as no Event of Default or Potential Event of Default has
occurred and is continuing, Company may make Investments as
required to be made by the Company pursuant to and in accordance
with the terms of the Consulting Agreement.
o CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
o Subsidiaries of Company may become and remain liable with respect
to Contingent Obligations in respect of the Subsidiary Guaranty;
o Company may become and remain liable with respect to Contingent
Obligations in respect of (x) Letters of Credit and (y) surety
bonds incurred in the ordinary course of business;
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under (x) Interest Rate
Agreements with Lenders or with any other party acceptable to
Administrative Agent with respect to Indebtedness in an aggregate
notional principal amount not to exceed at any time the aggregate
amount of the Commitments and (y) Currency Agreements with
Lenders entered into in the ordinary course of business for
hedging purposes only;
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations
incurred in connection with Asset Sales or other sales of assets;
135
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of the performance
by the Subsidiaries of Company of obligations (other than
obligations for the payment of money) of such Subsidiaries
incurred in the ordinary course of business;
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness
of Company or any of its wholly-owned Domestic Subsidiaries
permitted by subsection 7.1 (other than subsection 7.1(vi));
o Company and its Subsidiaries, as applicable, may remain liable
with respect to Contingent Obligations described in SCHEDULE 7.4
annexed hereto;
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in connection with Operating
Leases;
o Subsidiary Guarantors may become and remain liable with respect
to Contingent Obligations arising under subordinated guaranties
of the Senior Subordinated Notes as set forth in and to the
extent required under the Senior Subordinated Note Indenture as
in effect on the Closing Date;
o Company and its Domestic Subsidiaries may become and remain
liable with respect to other Contingent Obligations; PROVIDED
that the maximum aggregate liability, contingent or otherwise, of
Company and its Domestic Subsidiaries in respect of all such
Contingent Obligations, together with the aggregate principal
amount of all Indebtedness permitted under subsection 7.1(ix),
shall at no time exceed $20 million;
o Foreign Subsidiaries may become and remain liable with respect to
other Contingent Obligations; PROVIDED that the Contingent
Obligations are non-recourse to Company and its Domestic
Subsidiaries and the maximum aggregate liability, contingent or
otherwise, of Foreign Subsidiaries in respect of all such
Contingent Obligations, together with the aggregate principal
amount of all Indebtedness permitted under subsection 7.1(xi),
shall at no time exceed $10 million;
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of the contingent
deferred purchase price of any Permitted Acquisitions in an
aggregate amount not to exceed $5 million at any time
outstanding; and
o Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness
of SGIL permitted under subsection 7.1(x).
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o RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment, except:
o Company may make Restricted Junior Payments consisting of
payment-in-kind dividends paid on the Convertible Preferred
Stock;
o Company may make payments of regularly scheduled interest in
respect of the Senior Subordinated Notes in accordance with the
terms of and to the extent required by, and subject to the
subordination provisions contained in, the Senior Subordinated
Note Indenture;
o Company may repurchase (x) shares of its common stock and/or
warrants, rights or options to purchase such common stock to the
extent such repurchase is deemed to occur upon the exercise of
stock options to acquire common stock or similar arrangements to
acquire common stock; PROVIDED that such repurchased common stock
and/or warrants, rights or options to acquire shares of such
common stock represent a portion of the exercise price thereof;
PROVIDED FURTHER that no cash is expended (or obligation to
expend cash is incurred) by Company or any of its Subsidiaries
pursuant to this clause (iii)(x) and (y) shares of its common
stock and/or warrants, rights or options to purchase such common
stock held by directors, executive officers, members of
management or employees of Company or any of its Subsidiaries
upon the death, disability, retirement or termination of
employment of such directors, executive officers, members of
management or employees, so long as (1) no Potential Event of
Default or Event of Default then exists or would result therefrom
and (2) the aggregate amount of cash expended by Company pursuant
to this clause (iii) (y) does not exceed $2 million in any Fiscal
Year of Company; and
o Company may make withholding tax payments on behalf of the
holders of the Convertible Preferred Stock solely to the extent
required in connection with the payment by Company of
payment-in-kind dividends on the Convertible Preferred Stock;
PROVIDED that the aggregate amount of such withholding tax
payments made by Company in any Fiscal Year shall not exceed $1
million; PROVIDED, FURTHER, that the aggregate amount of such
withholding tax payments made by Company shall not exceed $5
million for the period from the Closing Date through and
including December 31, 2005; PROVIDED, FURTHER, still, that prior
to Company making any such withholding tax payments in any Fiscal
Year, the holders of the Convertible Preferred Stock shall have
previously made, or transferred to Company adequate funds so that
Company may make on behalf of the holders of the Convertible
Preferred Stock, withholding tax payments in an amount equal to
10% of the fair market value of such payment-in-kind dividends.
137
o FINANCIAL COVENANTS
o MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit the
Consolidated Fixed Charge Coverage Ratio, calculated on a Pro
Forma Basis, for any four-Fiscal Quarter period ending during any
of the periods set forth below to be less than the correlative
ratio indicated:
MINIMUM FIXED CHARGE
PERIOD COVERAGE RATIO
-------------------------------------------- -------------------------
Closing Date through September 30, 2000 1.35:1.00
October 1, 2000 through June 30, 2002 1.40:1.00
July 1, 2002 and thereafter 1.45:1.00
o MAXIMUM CONSOLIDATED LEVERAGE RATIO. Company shall not permit the
Consolidated Leverage Ratio, calculated on a Pro Forma Basis, for
any four-Fiscal Quarter period ending during any of the periods
set forth below to exceed the correlative ratio indicated:
MAXIMUM CONSOLIDATED
PERIOD LEVERAGE RATIO
---------------------------------------- ---------------------
Closing Date through December 31, 2000 5.25:1.00
January 1, 2001 through March 31, 2001 5.00:1.00
April 1, 2001 through June 30, 2001 4.75:1.00
July 1, 2001 through September 30, 2001 4.50:1.00
October 1, 2001 through December 31, 2001 4.35:1.00
January 1, 2002 through March 31, 2002 4.15:1.00
April 1, 2002 through June 30, 2002 4.10:1.00
July 1, 2002 through September 30, 2002 3.95:1.00
October 1, 2002 through December 31, 2002 3.80:1.00
January 1, 2003 through March 31, 2003 3.65:1.00
April 1, 2003 through June 30, 2003 3.55:1.00
July 1, 2003 through September 30, 2003 3.40:1.00
October 1, 2003 through December 31, 2003 3.30:1.00
January 1, 2004 through March 31, 2004 3.25:1.00
April 1, 2004 through June 30, 2004 3.15:1.00
July 1, 2004 through September 30, 2004 3.05:1.00
October 1, 2004 through December 31, 2004 2.95:1.00
January 1, 2005 through March 31, 2005 2.85:1.00
April 1, 2005 through June 30, 2005 2.75:1.00
July 1, 2005 through September 30, 2005 2.70:1.00
138
October 1, 2005 through December 31, 2005 2.60:1.00
January 1, 2006 through March 31, 2006 2.50:1.00
April 1, 2006 through June 30, 2006 2.45:1.00
July 1, 2006 through September 30, 2006 2.35:1.00
October 1, 2006 through December 31, 2006 2.25:1.00
January 1, 2007 and thereafter 2.00:1.00
o MINIMUM INTEREST COVERAGE RATIO. Company shall not permit the
Consolidated Interest Coverage Ratio, calculated on a Pro Forma
Basis, during any of the periods set forth below to be less than
the correlative ratio indicated:
MINIMUM INTEREST
PERIOD COVERAGE RATIO
--------------------------------------- ---------------------
Closing Date through December 31, 2000 1.70:1.00
January 1, 2001 through March 31, 2001 1.75:1.00
April 1, 2001 through June 30, 2001 1.85:1.00
July 1, 2001 through September 30, 2001 1.90:1.00
October 1, 2001 through December 31, 2001 1.95:1.00
January 1, 2002 through March 31, 2002 2.05:1.00
April 1, 2002 through June 30, 2002 2.10:1.00
July 1, 2002 through September 30, 2002 2.20:1.00
October 1, 2002 through December 31, 2002 2.25:1.00
January 1, 2003 through March 31, 2003 2.35:1.00
April 1, 2003 through June 30, 2003 2.45:1.00
July 1, 2003 through September 30, 2003 2.50:1.00
October 1, 2003 through December 31, 2003 2.60:1.00
January 1, 2004 through March 31, 2004 2.65:1.00
April 1, 2004 through June 30, 2004 2.75:1.00
July 1, 2004 through September 30, 2004 2.80:1.00
October 1, 2004 through December 31, 2004 2.90:1.00
January 1, 2005 through March 31, 2005 2.95:1.00
April 1, 2005 through June 30, 2005 3.05:1.00
July 1, 2005 through September 30, 2005 3.15:1.00
October 1, 2005 through December 31, 2005 3.25:1.00
January 1, 2006 through March 31, 2006 3.35:1.00
April 1, 2006 through June 30, 2006 3.45:1:00
139
July 1, 2006 and thereafter 3.50:1.00
o MINIMUM CONSOLIDATED NET WORTH. Company shall not permit
Consolidated Net Worth at any time to be less than the sum of (i)
$38.7 million ("Base Amount") PLUS (ii) (a) the sum of Adjusted
Consolidated Net Income for each Fiscal Quarter ending after the
Closing Date and ending on or before such date of determination
in which Adjusted Consolidated Net Income was positive MULTIPLIED
by (b) 75%; PROVIDED that for purposes of calculating Adjusted
Consolidated Net Income for the Fiscal Quarter ending on
September 30, 2000, such Fiscal Quarter shall be deemed to
commence on the first day after the Closing Date and end on
September 30, 2000; PROVIDED FURTHER, that the Base Amount shall
be increased to reflect 75% of any increase in the Consolidated
Net Worth of Company and its Subsidiaries as a result of any
Merger-related accounting adjustments made on or after the
Closing Date.
o RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of Company's
Subsidiaries to, alter the corporate, capital or legal structure of Company or
any of Company's Subsidiaries, or enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all the business, property or fixed assets of, or stock or other
evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
o any Domestic Subsidiary may be merged with or into Company or any
Subsidiary Guarantor, or be liquidated, wound up or dissolved, or
all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in
one transaction or a series of transactions, to Company or any
Subsidiary Guarantor; PROVIDED that, in the case of such a
merger, Company or such Subsidiary Guarantor shall be the
continuing or surviving corporation;
o Company and its Subsidiaries may make (x) Consolidated Capital
Expenditures permitted under subsection 7.8 and (y) Consolidated
Capital Software Expenditures permitted under subsection 7.16;
o Company and its Subsidiaries may dispose of obsolete, worn out or
surplus property in the ordinary course of business;
o Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales;
PROVIDED that the consideration received for such assets shall be
in an amount at least equal to the fair market value thereof;
140
o Acquisition Co. and Scientific Games may consummate the Merger;
o Company or any of its Subsidiaries may convey, sell, transfer or
otherwise dispose of for Cash any Margin Stock, whether now owned
or hereafter acquired; PROVIDED that such disposition is for fair
value and the proceeds are held in Cash or Cash Equivalents;
o Company and its Subsidiaries may consummate Permitted
Acquisitions; PROVIDED that each of the following conditions is
satisfied:
o the Acquired Business is engaged in a line of business that
Company and its Subsidiaries are permitted to engage in under
subsection 7.13A;
o the Acquired Business becomes a Subsidiary Guarantor or is
acquired by a Subsidiary Guarantor in such Permitted Acquisition;
o the aggregate amount of Cash consideration paid by Company and
its Subsidiaries (x) for any Permitted Acquisition or series of
related Permitted Acquisitions made after the Closing Date shall
not exceed $20 million and (y) for all Permitted Acquisitions
made after the Closing Date shall not exceed $60 million;
o the excess of the Revolving Loan Commitments over the Total
Utilization of Revolving Loan Commitments immediately after
giving effect to such Permitted Acquisition will be not less than
$15 million;
o concurrently with the consummation of such Permitted Acquisition,
Company shall, and shall cause its Subsidiaries to, comply with
the requirements of subsections 6.8 and 6.9 with respect to such
Permitted Acquisition;
o Company shall deliver to Administrative Agent an Officer's
Certificate (1) certifying that no Potential Event of Default or
Event of Default shall then exist or shall occur as a result of
such Permitted Acquisition and (2) demonstrating that after
giving effect to such Permitted Acquisition and to all
Indebtedness to be incurred or assumed or repaid in connection
with or as consideration for such Permitted Acquisition, Company
will be in compliance with the financial covenants set forth in
subsection 7.6, calculated on a Pro Forma Basis, as of the last
day of the four Fiscal Quarter period most recently ended prior
to the date of the proposed Permitted Acquisition for which the
relevant financial information is available;
o prior to the consummation of any Permitted Acquisition having a
purchase price in excess of $10 million, Company shall deliver to
Administrative Agent a copy, prepared in conformity with GAAP
(subject to year-end adjustments and the absence of footnotes),
of (i) financial statements of the Person or business so acquired
for the immediately preceding four consecutive Fiscal Quarter
period corresponding to the calculation period for the financial
covenants in the immediately preceding clause and (ii) to the
extent available
141
from the applicable seller of the Acquired Business or the
Acquired Business, audited or reviewed financial statements of
the Person or business to be so acquired for the fiscal year
ended within such period of such Person;
o prior to the consummation of any Permitted Acquisition having a
purchase price in excess of $15 million, Company shall deliver to
Administrative Agent revised financial projections (in a form
substantially consistent with previously provided projections)
for Company, on a Pro Forma Basis, for such proposed Permitted
Acquisition for the succeeding four Fiscal Quarters;
o the aggregate purchase price of all Permitted Acquisitions that
result in a new Foreign Subsidiary or result in the Acquired
Business being owned by a Foreign Subsidiary shall not exceed $10
million; and
o Company and its Subsidiaries may make Asset Sales of assets
having a fair market value of not in excess of $20 million in any
Fiscal Year or of $60 million in the aggregate for all such Asset
Sales during the term of this Agreement; provided that in each case
(x) the consideration received for such assets shall be in an amount
at least equal to the fair market value thereof; (y) 80% of the
consideration received therefor shall be Cash; and (z) the proceeds
of any such Asset Sale are applied as required by subsection
2.4B(iii)(a).
o CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in
an aggregate amount in excess of the corresponding amount (the "MAXIMUM
CONSOLIDATED CAPITAL EXPENDITURES AMOUNT") set forth below opposite such Fiscal
Year; PROVIDED that the Maximum Consolidated Capital Expenditures Amount for any
Fiscal Year shall be increased by an amount equal to the excess, if any, of the
Maximum Consolidated Capital Expenditures Amount for the previous Fiscal Year
only (prior to any adjustment in accordance with this proviso) over the actual
amount of Consolidated Capital Expenditures for such previous Fiscal Year;
PROVIDED, FURTHER that in no event shall the amount of such increase exceed 50%
of the Maximum Consolidated Capital Expenditures Amount for such previous Fiscal
Year (prior to any adjustment in accordance with this proviso):
142
FISCAL YEAR MAXIMUM CONSOLIDATED CAPITAL
EXPENDITURES
-----------------------------------------------------------------------
Fiscal Year 2000 $80.0 million
Fiscal Year 2001 $45.0 million
Fiscal Year 2002 $35.0 million
Fiscal Year 2003 $28.0 million
Fiscal Year 2004 $28.0 million
Fiscal Year 2005 $25.0 million
Fiscal Year 2006 $25.0 million
Fiscal Year 2007 $18.75 million
o SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or (ii) which Company or any of its Subsidiaries
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by Company or any of its Subsidiaries
to any Person (other than Company or any of its Subsidiaries) in connection with
such lease; PROVIDED that Company and its Subsidiaries may become and remain
liable as lessee, guarantor or other surety with respect to any such lease to
the extent that (i) such lease, if a Capital Lease, is permitted pursuant to
subsection 7.1(iii), (ii) the consideration received is at least equal to the
fair market value of the property sold as determined in good faith by Company's
Board of Directors; PROVIDED prior consent of the Board of Directors was
obtained if such fair market value was determined to be in excess of $1 million
and (iii) the Net Asset Sale Proceeds derived from the sale/leaseback of such
sold properties or assets owned by the Company or its Subsidiaries shall be
applied to prepay Loans and/or reduce commitments pursuant to subsection
2.4B(iii)(a) without regard to any reinvestment of such Net Asset Sale Proceeds
otherwise permitted under such subsection.
o SALE OR DISCOUNT OF RECEIVABLES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable;
PROVIDED that Company may discount accounts receivable arising under letters of
credit with respect to deferred customer financing in the ordinary course
143
of business so long as the aggregate amount of such discount does not exceed $2
million in any Fiscal Year.
o TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; PROVIDED that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of Company and its Subsidiaries, (iii)
reasonable fees and compensation paid to, and indemnity provided on behalf of,
officers, directors, employees or consultants of Company or any Subsidiary as
determined in good faith by Company's Board of Directors or its senior
management, (iv) Investments and Restricted Junior Payments permitted hereunder,
(v) transactions between the Company and any of its Subsidiaries or between
Subsidiaries, in each case, so long as no portion of the minority interest in
such Subsidiary is owned by an Affiliate of Company (other than a wholly-owned
Subsidiary or directors or officers of such Subsidiary that hold capital stock
of such Subsidiary to the extent that local law requires a resident of such
jurisdiction to own capital stock of such Subsidiary); PROVIDED such
transactions are not otherwise prohibited hereunder and the Board of Directors
of (x) Company, in the case of a transaction between Company and any of its
non-wholly owned Subsidiaries, or (y) the applicable wholly-owned Subsidiary in
the case of a transaction between a non-wholly owned Subsidiary and such
wholly-owned Subsidiary, in each case shall determine in good faith that such
transaction is fair to Company or such wholly-owned Subsidiary, as the case may
be, or (vi) any agreement as in effect as of the Closing Date (as amended by any
amendment thereto or any transaction contemplated thereby, in each case solely
to the extent such agreement and such transactions are set forth in SCHEDULE
7.11; PROVIDED that (a) any such amended agreement thereto is not more
disadvantageous to Company or any Subsidiary, as applicable, in any material
respect than such original agreement and (b) such amendment is not materially
adverse to Lenders.
o DISPOSAL OF SUBSIDIARY EQUITY.
Except pursuant to the Collateral Documents and except for any sale
of 100% of the capital stock or other equity Securities of any its Subsidiaries
in compliance with the provisions of subsection 7.7(i) or 7.7(viii), Company
shall not:
o directly or indirectly sell, assign, pledge or otherwise encumber
or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except to qualify
directors if required by applicable law; or
o permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of
capital stock or other equity Securities of any of its
Subsidiaries (including such Subsidiary), except to
144
Company or a Domestic Subsidiary, or to qualify directors if
required by applicable law.
o CONDUCT OF BUSINESS.
o From and after the Closing Date, Company shall not, and shall not
permit any of its Subsidiaries to, engage in any business other
than (i) the businesses engaged in by Company and its
Subsidiaries on the Closing Date and similar or related
businesses and (ii) such other lines of business as may be
consented to by Requisite Lenders.
o Company will not permit Acquisition Co. to engage in any
activities other than those that are necessary or advisable to
effect the Merger, and to effect the transaction contemplated by
this Agreement.
o AMENDMENTS OR WAIVERS OF RELATED AGREEMENTS.
o None of Company or any of its Subsidiaries will agree to any
material amendment to, or waive any of its material rights under,
any Related Agreement or the Consulting Agreement, as the case
may be, or terminate or agree to terminate any Related Agreement
or the Consulting Agreement, as the case may be, without in each
case obtaining the prior written consent of Requisite Lenders to
such amendment, waiver or termination, other than any amendment,
waiver or termination of any Related Agreement or the Consulting
Agreement, as the case may be, which is neither material nor
adverse to Lenders.
o Company shall not, and shall not permit any of its Subsidiaries
to, amend or otherwise change the terms of any Subordinated
Indebtedness, or make any payment consistent with an amendment
thereof or change thereto, if the effect of such amendment or
change is to increase the interest rate on such Subordinated
Indebtedness, change (to earlier dates) any dates upon which
payments of principal or interest are due thereon, change any
event of default or condition to an event of default with respect
thereto (other than to eliminate any such event of default or
increase any grace period related thereto), change the
redemption, prepayment or defeasance provisions thereof, change
the subordination provisions thereof (or of any guaranty
thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or
change, together with all other amendments or changes made, is to
increase materially the obligations of the obligor thereunder or
to confer any additional rights on the holders of such
Subordinated Indebtedness (or a trustee or other representative
on their behalf) which would be adverse to Company or Lenders.
o Company shall not, and shall not permit any of its Subsidiaries
to, designate any Indebtedness as "Designated Senior Debt" (as
defined in the Senior
145
Subordinated Note Indenture) for purposes of the Senior
Subordinated Note Indenture without the prior written consent of
Requisite Lenders.
o Company shall not make any payment on the Convertible Preferred
Stock in cash which could be made by the issuance of additional
shares of Convertible Preferred Stock.
o FISCAL YEAR.
Other than in compliance with subsection 6.11, Company shall not
change its Fiscal Year-end from October 31 of each calendar year, and, once such
change has been effected in compliance with subsection 6.11, Company shall not
change its Fiscal Year-end from December 31 of each calendar year.
o CONSOLIDATED CAPITAL SOFTWARE EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Software Expenditures, in any Fiscal Year indicated
below, in an aggregate amount in excess of the corresponding amount (the
"MAXIMUM CONSOLIDATED CAPITAL SOFTWARE EXPENDITURES AMOUNT") set forth below
opposite such Fiscal Year; PROVIDED that the Maximum Consolidated Capital
Software Expenditures Amount for any Fiscal Year shall be increased by an amount
equal to the excess, if any, of the Maximum Consolidated Capital Software
Expenditures Amount for the previous Fiscal Year only (prior to any adjustment
in accordance with this proviso) over the actual amount of Consolidated Capital
Software Expenditures for such previous Fiscal Year; PROVIDED, FURTHER that in
no event shall the amount of such increase exceed 50% of the Maximum
Consolidated Capital Software Expenditures Amount for such previous Fiscal Year
(prior to any adjustment in accordance with this proviso):
FISCAL YEAR MAXIMUM CONSOLIDATED CAPITAL
SOFTWARE EXPENDITURES
-----------------------------------------------------------------------
Fiscal Year 2000 $6.0 million
Fiscal Year 2001 $5.0 million
Fiscal Year 2002 $4.5 million
Fiscal Year 2003 $4.0 million
Fiscal Year 2004 $4.0 million
Fiscal Year 2005 $4.0 million
Fiscal Year 2006 $4.0 million
Fiscal Year 2007 $3.0 million
146
o MARGIN STOCK.
Notwithstanding anything to the contrary contained herein, Company and its
Subsidiaries shall not own Margin Stock with an aggregate value in excess of
$5,000,000.
o EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
o FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any Loan
when due, whether at stated maturity, by acceleration, by notice of voluntary
prepayment, by mandatory prepayment or otherwise; failure by Company to pay when
due any amount payable to an Issuing Lender in reimbursement of any drawing
under a Letter of Credit; or failure by Company to pay any interest on any Loan
or any fee or any other amount due under this Agreement within five days after
the date due; or
o DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations in an aggregate principal amount of $5 million or
more beyond the end of any grace period provided therefor; or (ii) breach or
default by Company or any of its Subsidiaries with respect to any other material
term of (a) one or more items of Indebtedness or Contingent Obligations in the
aggregate principal amount referred to in clause (i) above or (b) any loan
agreement, mortgage, indenture or other agreement relating to such item(s) of
Indebtedness or Contingent Obligation(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness or
Contingent Obligation(s) (or a trustee on behalf of such holder or holders) to
cause, that Indebtedness or Contingent Obligation(s) to become or be declared
due and payable prior to its stated maturity or the stated maturity of any
underlying obligation, as the case may be (upon the giving or receiving of
notice, lapse of time, both, or otherwise); or
o BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7; or
o BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made
by Company or any of its Subsidiaries in any Loan Document or in any statement
or certificate at any time given by Company or any of its Subsidiaries in
writing pursuant thereto or in connection therewith shall be false in any
material respect on the date as of which made; or
o OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or compliance
with any term contained in this Agreement or any of the other Loan Documents,
other than any such term referred to in any other subsection of this Section 8,
and such default shall not have been remedied or waived within thirty (30) days
after the earlier of (i) an officer of Company or such
147
Loan Party becoming aware of such default or (ii) receipt by Company and such
Loan Party of notice from Administrative Agent or any Lender of such default; or
o INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
A court having jurisdiction in the premises shall enter a decree or
order for relief in respect of Company or any of its Subsidiaries in an
involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against Company or any of its Subsidiaries under the Bankruptcy Code or under
any other applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii) shall continue for 60 days unless dismissed, bonded or
discharged; or
o VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Company or any of its Subsidiaries shall
make any assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries shall be unable, or shall fail generally, or shall admit in writing
its inability, to pay its debts as such debts become due; or the Board of
Directors of Company or any of its Subsidiaries (or any committee thereof) shall
adopt any resolution or otherwise authorize any action to approve any of the
actions referred to in clause (i) above or this clause (ii); or
o JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving either in any individual case or in the aggregate at any time an
amount in excess of $5 million (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company has
acknowledged coverage) shall be entered or filed against Company or any of its
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
148
o DISSOLUTION.
Any order, judgment or decree shall be entered against Company or
any of its Subsidiaries decreeing the dissolution or split up of Company or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of 30 days; or
o EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in
the aggregate results in, or, excluding any event described in clause (x) of the
definition of ERISA Event, would reasonably be expected to result in, liability
to Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $5 million during the term of this Agreement; or there shall exist
an amount of unfunded benefit liability calculated in accordance with the
provisions of subsection 5.11D which exceeds $5 million; or
o CHANGE IN CONTROL.
Any Change in Control shall occur; or
o INVALIDITY OF GUARANTIES; FAILURE OF SECURITY; REPUDIATION OF
OBLIGATIONS.
At any time after the execution and delivery thereof, (i) any
Subsidiary Guaranty for any reason, other than the satisfaction in full of all
Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void, (ii) any
Collateral Document shall cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or Administrative Agent for the benefit of
Lenders shall not have or shall cease to have a valid and perfected First
Priority Lien on any Collateral purported to be covered thereby, in each case
for any reason other than the failure of any Agent or any Lender to take any
action within its control, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability, including with respect to future advances by Lenders,
under any Loan Document to which it is a party;
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan, the
obligation of the Person which is Administrative Agent to issue any Letter of
Credit and the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate, and (ii) upon the occurrence and during the continuation of
any other Event of Default, Administrative Agent shall, upon the written
request, or may, with the written consent, of Requisite Lenders, by written
notice to Company, declare all or any portion of the amounts described in
clauses (a) through (c) above to be, and the same shall forthwith become,
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Company,
and the obligation of each Lender to make any Loan, the obligation of the Person
which is Administrative Agent to issue any Letter of Credit and the right of any
Lender to issue any Letter of Credit hereunder shall thereupon terminate;
PROVIDED that the foregoing shall not affect in any way the obligations of
Revolving Lenders under subsection 3.3C(i) or the obligations of Revolving
Lenders to purchase participations in any unpaid Swing Line Loans as provided in
subsection 2.1A(iv).
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Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent in the Collateral
Account established pursuant to the Security Agreement and shall be applied as
provided therein.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to clause (ii) of such paragraph Company shall pay all arrears of
interest and all payments on account of principal which shall have become due
otherwise than as a result of such acceleration (with interest on principal and,
to the extent permitted by law, on overdue interest, at the rates specified in
this Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in each
case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders and
are not intended, directly or indirectly, to benefit Company, and such
provisions shall not at any time be construed so as to grant Company the right
to require Lenders to rescind or annul any acceleration hereunder or to preclude
Administrative Agent or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
o THE AGENTS
o APPOINTMENT.
o Appointment of Agents. DLJ is hereby appointed Administrative
Agent and Syndication Agent hereunder and under the other Loan
Documents and each Lender hereby authorizes Administrative Agent
and Syndication Agent to act as its agent in accordance with the
terms of this Agreement and the other Loan Documents. LCPI is
hereby appointed Documentation Agent. Each of Administrative
Agent and Syndication Agent agrees to act upon the express
conditions contained in this Agreement and the other Loan
Documents, as applicable. The Documentation Agent shall have no
duties or responsibilities under this Agreement and the other
Loan Documents. The provisions of this Section 9 are solely for
the benefit of each of Agents and Lenders and Company shall have
no rights as a third party beneficiary of any of the provisions
thereof. In performing its functions and duties under this
Agreement, each of Administrative Agent and Syndication Agent
shall act solely as an agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation towards or
relationship of agency or trust with or for Company or any of its
Subsidiaries.
o Appointment of Supplemental Collateral Agents. It is the purpose
of this Agreement and the other Loan Documents that there shall
be no violation of any law of any jurisdiction denying or
restricting the right of banking corporations or associations to
transact business as agent or trustee in such
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jurisdiction. It is recognized that in case of litigation under
this Agreement or any of the other Loan Documents, and in
particular in case of the enforcement of any of the Loan
Documents, or in case Administrative Agent deems that by reason
of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or
in any of the other Loan Documents or take any other action which
may be desirable or necessary in connection therewith, it may be
necessary that Administrative Agent appoint an additional
individual or institution as a separate trustee, co-trustee,
collateral agent or collateral co-agent (any such additional
individual or institution being referred to herein individually
as a "Supplemental Collateral Agent" and collectively as
"Supplemental Collateral Agents").
In the event that Administrative Agent appoints a Supplemental
Collateral Agent with respect to any Collateral, (i) each and every right,
power, privilege or duty expressed or intended by this Agreement or any of the
other Loan Documents to be exercised by or vested in or conveyed to
Administrative Agent with respect to such Collateral shall be exercisable by and
vest in such Supplemental Collateral Agent to the extent, and only to the
extent, necessary to enable such Supplemental Collateral Agent to exercise such
rights, powers and privileges with respect to such Collateral and to perform
such duties with respect to such Collateral, and every covenant and obligation
contained in the Loan Documents and necessary to the exercise or performance
thereof by such Supplemental Collateral Agent shall run to and be enforceable by
either Administrative Agent or such Supplemental Collateral Agent, and (ii) the
provisions of this Section 9 and of subsections 10.2 and 10.3 that refer to
Administrative Agent shall inure to the benefit of such Supplemental Collateral
Agent and all references therein to Administrative Agent shall be deemed to be
references to Administrative Agent and/or such Supplemental Collateral Agent, as
the context may require.
Should any instrument in writing from Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by
Administrative Agent for more fully and certainly vesting in and confirming to
him or it such rights, powers, privileges and duties, Company shall, or shall
cause such other Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Administrative Agent. In case any
Supplemental Collateral Agent, or a successor thereto, shall die, become
incapable of acting, resign or be removed, all the rights, powers, privileges
and duties of such Supplemental Collateral Agent, to the extent permitted by
law, shall vest in and be exercised by Administrative Agent until the
appointment of a new Supplemental Collateral Agent.
o POWERS AND DUTIES; GENERAL IMMUNITY.
o Powers; Duties Specified. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other
Loan Documents as are specifically delegated or granted to such
Agent by the terms hereof and thereof, together with such powers,
rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Loan
Documents. Each Agent may exercise such powers, rights and
remedies
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and perform such duties by or through its agents or employees. No
Agent shall have, by reason of this Agreement or any of the other
Loan Documents, a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or any of the other Loan
Documents, expressed or implied, is intended to or shall be so
construed as to impose upon any Agent any obligations in respect
of this Agreement or any of the other Loan Documents except as
expressly set forth herein or therein. Notwithstanding anything
herein to the contrary, Agent shall not be responsible for
notifying any Federal banking authority of its activities
hereunder (including pursuant to the Bank Service Company Act (12
U.S.C. 1867)).
o No Responsibility for Certain Matters. No Agent shall be
responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any other Loan Document or for
any representations, warranties, recitals or statements made
herein or therein or made in any written or oral statements or in
any financial or other statements, instruments, reports or
certificates or any other documents furnished or made by such
Agent to Lenders or by or on behalf of Company to such Agent or
any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition
or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall such Agent be required to
ascertain or inquire as to the performance or observance of any
of the terms, conditions, provisions, covenants or agreements
contained in any of the Loan Documents or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or as
to the existence or possible existence of any Event of Default or
Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of
outstanding Loans or the Letter of Credit Usage or the component
amounts thereof.
o Exculpatory Provisions. None of the Agents nor any of their
respective officers, directors, employees or agents shall be
liable to Lenders for any action taken or omitted by any such
Agent under or in connection with any of the Loan Documents
except to the extent caused by such Agent's gross negligence or
willful misconduct. Each Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to
take an action) in connection with this Agreement or any of the
other Loan Documents or from the exercise of any power,
discretion or authority vested in it hereunder or thereunder
unless and until such Agent shall have received instructions in
respect thereof from Requisite Lenders (or such other Lenders as
may be required to give such instructions under subsection 10.6)
and, upon receipt of such instructions from Requisite Lenders (or
such other Lenders, as the case may be), such Agent shall be
entitled to act or (where so instructed) refrain from acting, or
to exercise such power, discretion or authority, in accordance
with such instructions. Without prejudice to the generality of
the foregoing, (i) each Agent shall be entitled to rely, and
shall be fully protected in relying,
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upon any communication, instrument or document believed by it to
be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall
be protected in relying on opinions and judgments of attorneys
(who may be attorneys for Company and its Subsidiaries),
accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever
against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of
the other Loan Documents in accordance with the instructions of
Requisite Lenders (or such other Lenders as may be required to
give such instructions under subsection 10.6).
o Agents Entitled to Act as Lender. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or
impose any duties or obligations upon, any Person which is an
Agent in its individual capacity as a Lender hereunder. With
respect to its participation in the Loans and the Letters of
Credit, each Person which is an Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the
same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or
any similar term shall, unless the context clearly otherwise
indicates, include such Person in its individual capacity. Any
Person which is an Agent and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking,
trust, financial advisory or other business with Company or any
of its Affiliates as if it were not performing the duties
specified herein, and may accept fees and other consideration
from Company for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
o REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL
OF CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
o RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees
to indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits,
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costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Loan Documents or otherwise in its
capacity as Administrative Agent or Syndication Agent, as the case may be, in
any way relating to or arising out of this Agreement or the other Loan
Documents; PROVIDED that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from any Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity except against gross negligence or
willful misconduct and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished.
o SUCCESSOR AGENTS AND SWING LINE LENDER.
o Successor Agents. Each Agent may resign at any time by giving 30
days' prior written notice thereof to the other Agents, Lenders
and Company, and any Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in
writing delivered to Company and the Agents and signed by
Requisite Lenders. Upon any notice of resignation or removal of
Administrative Agent, Requisite Lenders shall have the right,
upon five Business Days' notice to Company, to appoint a
successor Administrative Agent. If for any reason Requisite
Lenders cannot agree on a successor Administrative Agent, the
resigning Administrative Agent shall have the right to designate
a successor Administrative Agent, after consulting with Company.
Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, that successor
Administrative Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the
retiring or removed Administrative Agent, and the retiring or
removed Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder
as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this
Agreement.
o Successor Swing Line Lender. Any resignation or removal of
Administrative Agent pursuant to subsection 9.5A shall also
constitute the resignation or removal of DLJ or its successor as
Swing Line Lender, and any successor Administrative Agent
appointed pursuant to subsection 9.5A shall, upon its acceptance
of such appointment, become the successor Swing Line Lender for
all purposes hereunder. In such event (i) Company shall prepay
any outstanding Swing Line Loans made by the retiring or removed
Administrative Agent in its capacity as Swing Line Lender, (ii)
upon such prepayment, the retiring or removed Administrative
Agent and Swing Line Lender shall surrender the Swing Line Note
held by it to Company for cancellation, and (iii) Company shall
issue a new Swing Line Note to the
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successor Administrative Agent and Swing Line Lender
substantially in the form of EXHIBIT IV-D annexed hereto, in the
principal amount of the Swing Line Loan Commitment then in effect
and with other appropriate insertions.
o COLLATERAL DOCUMENTS AND GUARANTIES.
o Each Lender hereby further authorizes Administrative Agent, on
behalf of and for the benefit of Lenders, to enter into each
Collateral Document as secured party and to be the agent for and
representative of Lenders under each Subsidiary Guaranty, and
each Lender agrees to be bound by the terms of each Collateral
Document and Subsidiary Guaranty; PROVIDED that Administrative
Agent shall not (i) enter into or consent to any material
amendment, modification, termination or waiver of any provision
contained in any Collateral Document or Subsidiary Guaranty or
(ii) release any Collateral (except as otherwise expressly
permitted or required pursuant to the terms of this Agreement or
the applicable Collateral Document), in each case without the
prior consent of Requisite Lenders (or, if required pursuant to
subsection 10.6, all Lenders); PROVIDED FURTHER, HOWEVER, that,
without further written consent or authorization from Lenders,
Administrative Agent may execute any documents or instruments
necessary to (a) release any Lien encumbering any item of
Collateral that is the subject of a sale or other disposition of
assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented or (b) release any Subsidiary Guarantor
from the Subsidiary Guaranty if all of the equity Securities of
such Subsidiary Guarantor are sold to any Person (other than an
Affiliate of Company) pursuant to a sale or other disposition
permitted hereunder or to which Requisite Lenders have otherwise
consented. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Company, each Agent and each Lender
hereby agree that (X) no Lender shall have any right individually
to realize upon any of the Collateral under any Collateral
Document or to enforce any Subsidiary Guaranty, it being
understood and agreed that all rights and remedies under the
Collateral Documents and the Subsidiary Guaranties may be
exercised solely by Administrative Agent for the benefit of
Lenders in accordance with the terms thereof, and (Y) in the
event of a foreclosure by Administrative Agent on any of the
Collateral pursuant to a public or private sale, any Agent or any
Lender may be the purchaser of any or all of such Collateral at
any such sale and Administrative Agent, as agent for and
representative of all Lenders (but not any Lender or Lenders in
its or their respective individual capacities) if Requisite
Lenders shall agree in writing shall be entitled, for the purpose
of bidding and making settlement or payment of the purchase price
for all or any portion of the Collateral sold at any such public
sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any collateral payable by
Administrative Agent at such sale.
o Each Lender hereby authorizes Administrative Agent to execute any
and all powers of attorney or other instruments on behalf of such
Lender necessary to
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affect the pledge of any Subsidiary's shares of capital stock
under the laws of a jurisdiction outside of the United States of
America.
o MISCELLANEOUS
o SUCCESSORS AND ASSIGNS.
o The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that Company may
not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender (and
any attempted assignment or transfer by Company without such
consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto and their respective
successors and assigns permitted hereby and, to the extent
expressly contemplated hereby, the Affiliates of each of the
Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
o Any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans at
the time owing to it) and the other Loan Documents; provided that
(i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitments and the Loans at the
time owing to it or in the case of an assignment to a Lender or
an Affiliate of a Lender or an Approved Fund with respect to a
Lender, the aggregate amount of the Revolving Loan Commitment
(which for this purpose includes Loans outstanding thereunder) or
principal outstanding balance of the Term Loan of the assigning
Lender subject to each such assignment (determined as of the date
the Assignment Agreement with respect to such assignment is
delivered to Administrative Agent) shall not be less than $5
million, in the case of any assignment of a Revolving Loan, or $1
million, in the case of any assignment of a Term Loan, unless
each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, Company otherwise consent
(each such consent not to be unreasonably withheld or delayed),
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loan or the
Commitment assigned, except that this clause (ii) shall not
prohibit any Lender from assigning all or a portion of its rights
and obligations among separate Commitments or Loans on a non-PRO
RATA basis, and (iii) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment
Agreement, together with a processing and recordation fee of
$1500, and the Eligible Assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an administrative
questionnaire. Subject to acceptance and recording thereof by
Administrative Agent in the Register, from and after the
effective date specified in each Assignment Agreement, the
Eligible Assignee thereunder
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shall be a party hereto and, to the extent of the interest
assigned by such Assignment Agreement, have the rights and
obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned
by such Assignment Agreement, be released from its obligations
under this Agreement (and, in the case of an Assignment Agreement
covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of
subsections 2.6, 2.7, 3.6, 10.2 and 10.3. Any assignment or
transfer by a Lender of rights or obligations under this
Agreement that does not comply with this subsection 10.1B shall
be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in
accordance with subsection 10.1C.
o Any Lender may, without the consent of, or notice to, Company or
the Administrative Agent, sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of
such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitments and/or the Loans
owing to it); PROVIDED that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) Company, the
Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the
sole right to enforce this Agreement and to approve any
amendment, modification or waiver of any provision of this
Agreement; PROVIDED that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant
agree to any amendment, modification or waiver described in
clauses (a), (b), (c), (d) or (e) of subsection 10.6A that
affects such Participant. Subject to subsection 10.1D, Company
agrees that each Participant shall be entitled to the benefits of
subsections 3.6, 2.6D and 2.7 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to
subsection 10.1B. To the extent permitted by law, each
Participant also shall be entitled to the benefits of subsection
10.4 as though it were a Lender, provided such Participant agrees
to be subject to subsection 10.5 as though it were a Lender.
o A Participant shall not be entitled to receive any greater
payment under subsection 2.7 than the applicable Lender would
have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to
such Participant is made with Company's prior written consent. A
Participant that would be a foreign Lender if it were a Lender
shall not be entitled to the benefits of subsection 2.7 unless
Company is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of Company, to
comply with Section 2.7B(iii)(a) as though it were a Lender.
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o Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal
Reserve Bank; PROVIDED that no such pledge or assignment of a
security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee
for such Lender as a party hereto.
o Information. Each Lender may furnish any information concerning
any Loan Party in the possession of that Lender from time to time
to assignees and participants (including prospective assignees
and participants), subject to subsection 10.19.
o Representations of Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants (i) that it is an
Eligible Assignee or, upon the approval of Administrative Agent
and such other Persons, if any, required under the definition of
Eligible Assignee, will be an Eligible Assignee; (ii) that it has
experience and expertise in the making or acquiring of loans such
as the Loans; and (iii) that it will make or acquire its Loans
for its own account in the ordinary course of its business and
without a view to distribution of such Loans within the meaning
of the Securities Act or the Exchange Act or other federal
securities laws (it being understood that, subject to the
provisions of this subsection 10.1, the disposition of such Loans
or any interests therein shall at all times remain within its
exclusive control). Each Lender that becomes a party hereto
pursuant to an Assignment Agreement will be deemed to agree that
the representations and warranties of such Lender contained in
Section 2(c) of such Assignment Agreement are incorporated herein
by this reference.
o EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual out of pocket and
reasonable costs and expenses of preparation of the Loan Documents and any
consents, amendments, waivers or other modifications thereto; (ii) all the costs
of furnishing all opinions by counsel for Company (including any opinions
requested by Administrative Agent or Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this Agreement
and the other Loan Documents including with respect to confirming compliance
with environmental, insurance and solvency requirements; (iii) the reasonable
fees, expenses and disbursements of counsel to Arranger and Administrative Agent
in connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other documents or matters requested by Company; (iv) all the
actual costs and reasonable expenses of creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Collateral
Document, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums, and reasonable fees,
expenses and disbursements of counsel to Administrative Agent and of counsel
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providing any opinions that Administrative Agent or Requisite Lenders may
request in respect of the Collateral Documents or the Liens created pursuant
thereto; (v) all the actual out of pocket costs and reasonable expenses
(including the reasonable fees, expenses and disbursements of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents employed or retained by Administrative Agent or their respective
counsel) of obtaining and reviewing any appraisals, environmental audits or
reports and any audits or reports provided for under subsection 4.1I, 6.9B or
6.9C; (vi) the custody or preservation of any of the Collateral; (vii) all other
actual and reasonable costs and expenses incurred by Arranger or Administrative
Agent in connection with the syndication of the Commitments and the negotiation,
preparation and execution of the Loan Documents and any consents, amendments,
waivers or other modifications thereto and the transactions contemplated
thereby; and (viii) after the occurrence and during the continuation of an Event
of Default, all costs and expenses, including reasonable attorneys' fees and
costs of settlement, incurred by Administrative Agent and Lenders in enforcing
any Obligations of or in collecting any payments due from any Loan Party
hereunder or under the other Loan Documents by reason of such Event of Default
(including in connection with the sale of, collection from, or other realization
upon any of the Collateral or the enforcement of the Subsidiary Guaranties or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings).
o INDEMNITY.
In addition to the payment of expenses pursuant to subsection 10.2,
whether or not the transactions contemplated hereby shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Arranger, Agents and Lenders, and the officers,
directors, trustees, employees, agents and affiliates of Arranger, Agents and
Lenders (collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined); PROVIDED that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any
and all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including without limitation the costs of any investigation,
study, sampling, testing, abatement, cleanup, removal, remediation or other
response action necessary to remove, remediate, clean up or xxxxx any Hazardous
Materials Activity not caused solely by the gross negligence or willful
misconduct of Administrative Agent or the Lenders), expenses and disbursements
of any kind or nature whatsoever (including the reasonable fees and
disbursements of counsel for Indemnitees in connection with any investigative,
administrative or judicial proceeding commenced or threatened by any Person,
whether or not any such Indemnitee shall be designated as a party or a potential
party thereto, and any fees or expenses incurred by Indemnitees in enforcing
this indemnity), whether direct, indirect or consequential and whether based on
any federal, state or foreign laws, statutes, rules or regulations (including
securities and commercial laws, statutes, rules or regulations and Environmental
Laws), on common law or equitable cause or on contract or otherwise, that may be
imposed on, incurred by, or asserted against any such Indemnitee, in
159
any manner relating to or arising out of (i) this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby (including Lenders'
agreement to make the Loans hereunder or the use or intended use of the proceeds
thereof or the issuance of Letters of Credit hereunder or the use or intended
use of any thereof), or any enforcement of any of the Loan Documents (including
any sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Subsidiary Guaranties), (ii) the statements contained in
the commitment letter delivered by any Lender to Company with respect thereto,
or (iii) any Environmental Claim or any Hazardous Materials Activity relating to
or arising from, directly or indirectly, any past or present activity,
operation, land ownership, or practice of Company or any of its Subsidiaries.
No Lenders shall have any liability for special, incidental,
consequential or punitive damages arising out of such Lender's breach of this
Agreement or any other Loan Document to the extent such liability did not arise
solely from the gross negligence or willful misconduct of such Lender as
determined by a final judgment of a court of competent jurisdiction.
To the extent that the undertakings to defend, indemnify, pay and
hold harmless set forth in this subsection 10.3 may be unenforceable in whole or
in part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
o SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuation of any Event of Default each Lender is hereby authorized
by Company at any time or from time to time, without notice to Company or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including
Indebtedness evidenced by certificates of deposit, whether matured or unmatured,
but not including trust accounts) and any other Indebtedness at any time held or
owing by that Lender to or for the credit or the account of Company against and
on account of the obligations and liabilities of Company to that Lender under
this Agreement, the Letters of Credit and participations therein and the other
Loan Documents, including all claims of any nature or description arising out of
or connected with this Agreement, the Letters of Credit and participations
therein or any other Loan Document, irrespective of whether or not (i) that
Lender shall have made any demand hereunder or (ii) the principal of or the
interest on the Loans or any amounts in respect of the Letters of Credit or any
other amounts due hereunder shall have become due and payable pursuant to
Section 8 and although said obligations and liabilities, or any of them, may be
contingent or unmatured. Nothing in this subsection 10.4 or in subsection 10.5
shall limit any Lender's rights to make a set-off against other obligations owed
such Lender prior to or instead of setting off against the Aggregate Amounts Due
(as defined below) to such Lender. Company hereby further grants to each Agent
and each Lender a security interest in all deposits and accounts maintained with
such Agent or such Lender as security for the Obligations.
160
o RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise (except pursuant to subsections 2.4B, 2.8B or 10.1), or
as adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, amounts payable in respect of Letters of Credit,
fees and other amounts then due and owing to that Lender hereunder or under the
other Loan Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender)
which is greater than the proportion received by any other Lender in respect of
the Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Administrative Agent and each
other Lender of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; PROVIDED that if
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Company or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker's lien, set-off or counterclaim with respect to any and all monies owing
by Company to that holder with respect thereto as fully as if that holder were
owed the amount of the participation held by that holder.
o AMENDMENTS AND WAIVERS.
o No amendment, modification, termination or waiver of any
provision of this Agreement or of the other Loan Documents, and
no consent to any departure by Company therefrom, shall in any
event be effective without the written concurrence of Requisite
Lenders; PROVIDED that any amendment, modification, termination,
waiver or consent which:
o extends, postpones or waives the final scheduled maturity of any
Loan or Note, or extends the stated maturity of any Letter of
Credit beyond the Revolving Loan Commitment Termination Date, or
reduces the rate or extends the time of payment of interest or
fees thereon (except in connection with a waiver of applicability
of any post-default increase in interest rates), or reduces the
principal amount thereof (except to the extent repaid in cash),
or increases the amount or extends the expiration date of any
Lender's Commitments; or
o releases all or substantially all of (x) the Collateral (except
as expressly provided in the Loan Documents) under all the
Collateral Documents (it being
161
understood that an increase in the amount of Indebtedness of the
Company secured ratably by the Collateral shall not be deemed a
release of Collateral), or (y) the Subsidiary Guarantors (except
as expressly provided in the Loan Documents) from their
obligations under the Subsidiary Guaranty, or subordinates the
rights of any Lender in right of payment, or to any Collateral,
to the prior payment or priority of any other Person (including,
without limitation, any future Loans under this Agreement); or
o amends, modifies or waives any provision of this subsection 10.6;
or
o reduces the percentage specified in the definition "Requisite
Lenders" or "Requisite Class Lenders" (it being understood that,
with the consent of Requisite Lenders, holders of additional
extensions of credit pursuant to this Agreement may be included
in the determination of Requisite Lenders on substantially the
same basis as the holders of extensions of Term Loans and
Revolving Loan Commitments are included on the Closing Date); or
o consents to the assignment or transfer by any Loan Party of any
of its rights and obligations under this Agreement or any other
Loan Document or amends, modifies or waives any provision of any
Loan Document that, by its terms, requires the consent, approval
or satisfaction of all of the Lenders;
shall be effective only if evidenced in a writing signed by or on behalf of all
Lenders (with Obligations being directly affected in the case of clause (a)
above).
In addition, (i) no amendment, modification, termination or waiver
of any provision of any Note held by a Lender or which increases the Commitments
of any Lender over the amount thereof then in effect shall be effective without
the written concurrence of such Lender, (ii) no amendment, modification,
termination or waiver of any provision of subsection 2.1A(iv) or any other
provision of this Agreement relating to the Swing Line Lender shall be effective
without the written concurrence of Swing Line Lender, (iii) no amendment,
modification, termination or waiver of any provision of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Administrative Agent shall be effective without the
written concurrence of Administrative Agent, (iv) no amendment, modification,
termination or waiver of any provision of subsection 2.3C or subsection 2.4 or
any Collateral Document or Subsidiary Guaranty that has the effect of changing
any voluntary or mandatory prepayments or Commitment reductions or voluntary
prepayment fees or application of proceeds of Collateral or payments pursuant to
the Subsidiary Guaranty applicable to any Class (the "AFFECTED CLASS") in a
manner that disproportionately disadvantages such Class relative to the other
Classes shall be effective without the written concurrence of Requisite Class
Lenders of the Affected Class (it being understood and agreed that any
amendment, modification, termination or waiver of any such provision that only
postpones or reduces any voluntary or mandatory prepayment or Commitment
reduction set forth in subsection 2.4 with respect to one Class but not the
other Classes shall be deemed to disproportionately disadvantage one Class but
not to disproportionately disadvantage such other Classes for purposes of this
clause (iv), and it being further understood that any amendment covered by
clause (v) or clause (vi) shall be deemed not to disproportionately disadvantage
any
162
Class), (v) any increase in the Tranche A Term Loan Commitments, Tranche B
Term Loan Commitments or Revolving Loan Commitments (and any appropriate
conforming and supplemental modifications to this Agreement) shall require the
approval of Supermajority Lenders and each Lender increasing its Tranche A Term
Loan Commitment, Tranche B Term Loan Commitment or Revolving Loan Commitment, as
the case may be (provided that increases pursuant to subsection 2.1A(v) do not
require the consent of either Requisite Lenders or Supermajority Lenders), (vi)
the creation of an additional Class of commitments and loans made thereunder
(and any appropriate conforming and supplemental modifications to this
Agreement) shall require the approval of Supermajority Lenders and each Lender
providing a commitment under such additional Class, and (vii) no amendment,
modification, waiver or consent in respect of any provision of this Agreement or
any other Loan Document shall be effective without the consent of all of the
Tranche B Term Loan Lenders if such amendment, modification, termination, waiver
or consent amends, modifies, terminates or waives subsection 2.3C.
o If, in connection with any proposed amendment, modification,
termination or waiver of any of the provisions of this Agreement
or the Notes which requires the consent of all Lenders, the
consent of Requisite Lenders is obtained but the consent of one
or more of such other Lenders whose consent is required is not
obtained, then Company shall have the right, so long as all
non-consenting Lenders whose individual consent is required are
treated as described in either clause (i) or (ii) below, to
either (i) replace each such non-consenting Lender or Lenders
with one or more Replacement Lenders pursuant to subsection 2.8
so long as at the time of such replacement, each such Replacement
Lender consents to the proposed amendment, modification,
termination or waiver, or (ii) terminate such non-consenting
Lender's Commitments and repay in full its outstanding Loans in
accordance with subsections 2.4B(i)(b) and 2.4B(ii)(b); PROVIDED
that unless the Commitments that are terminated and the Loans
that are repaid pursuant to the preceding clause (ii) are
immediately replaced in full at such time through the addition of
new Lenders or the increase of the Commitments and/or outstanding
Loans of existing Lenders (who in each case must specifically
consent thereto), then in the case of any action pursuant to the
preceding clause (ii), the Requisite Lenders (determined before
giving effect to the proposed action) shall specifically consent
thereto; PROVIDED FURTHER that Company shall not have the right
to terminate such non-consenting Lender's Commitment and repay in
full its outstanding Loans pursuant to clause (ii) of this
subsection 10.6B if, immediately after the termination of such
Lender's Revolving Loan Commitment in accordance with subsection
2.4B(ii)(b), the Revolving Loan Exposure of all Lenders would
exceed the Revolving Loan Commitments of all Lenders; PROVIDED
STILL FURTHER that Company shall not have the right to replace a
Lender solely as a result of the exercise of such Lender's rights
(and the withholding of any required consent by such Lender)
pursuant to the second paragraph of subsection 10.6A.
o Administrative Agent may, but shall have no obligation to, with
the concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of that Lender. Any waiver or
consent shall be effective
163
only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on Company in any case
shall entitle Company to any other or further notice or demand in
similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this
subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on
Company.
o INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
o NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
or courier service and shall be deemed to have been given when delivered in
person or by courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; PROVIDED that notices to Administrative Agent shall not
be effective until received. For the purposes hereof, the address of each party
hereto shall be as set forth under such party's name on the signature pages
hereof or (i) as to Company and Administrative Agent, such other address as
shall be designated by such Person in a written notice delivered to the other
parties hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Administrative Agent.
o SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
o All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the
making of the Loans and the issuance of the Letters of Credit
hereunder.
o Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Company set forth in subsections
2.6D, 2.7, 3.5A, 3.6, 5.12, 6.7A, 10.2, 10.3 and 10.4 and the
agreements of Lenders set forth in subsections 9.2C, 9.4 and 10.5
shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, the foreclosure (including by the
exercise of power of sale) of any Mortgage or any deed given in
lieu of foreclosure, and the termination of this Agreement.
164
o FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of any Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude any other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
o MARSHALLING; PAYMENTS SET ASIDE.
None of Agents or Lenders shall be under any obligation to marshal
any assets in favor of Company or any other party or against or in payment of
any or all of the Obligations. To the extent that Company makes a payment or
payments to Administrative Agent or Lenders (or to Administrative Agent for the
benefit of Lenders), or any of Agents or Lenders enforce any security interests
or exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
o SEVERABILITY.
In case any provision in or obligation under this Agreement or the
Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
o OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender shall
be responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out of this Agreement and it shall not be necessary for any other
Lender to be joined as an additional party in any proceeding for such purpose.
o HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
165
o APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
o CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY OBJECTION TO VENUE AND ANY DEFENSE OF FORUM NON
CONVENIENS;
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST
EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION 5-1402
OR OTHERWISE.
o WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS
BETWEEN THEM
166
RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any court and
that relate to the subject matter of this transaction, including contract
claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN
WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
o CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant
to the requirements of this Agreement which has been identified as confidential
by Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates and professional advisors of such
Lender or disclosures reasonably required by (a) any bona fide assignee,
transferee or participant in connection with the contemplated or actual
assignment or transfer by such Lender of any Loans or any participations therein
or (b) by any direct or indirect contractual counterparties in swap agreements
or such contractual counterparties' professional advisors provided that such
contractual counterparty or professional advisor to such contractual
counterparty agrees to keep such information confidential to the same extent
required of the Lenders hereunder, or disclosures required or requested by any
governmental agency or representative thereof or pursuant to legal process;
PROVIDED that, unless specifically prohibited (or requested not to do so) by
applicable law or court order, each Lender shall notify Company of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information, or disclosure of
information in connection with any litigation to which such Lender is a party,
or disclosure of information which is or becomes publicly available other than
as a result of a breach by such Lender of this subsection 10.19, or disclosure
of information which is received by such Lender without restriction as to its
disclosure or use from a Person who, to such Lender's knowledge or reasonable
belief, was not prohibited from disclosing it by any duty of confidentiality;
and PROVIDED FURTHER that in no event shall Administrative Agent or any Lender
be obligated or required to return any materials furnished by Company or any of
its Subsidiaries.
167
o COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Administrative Agent of written or telephonic notification of such execution and
authorization of delivery thereof.
[Remainder of page intentionally left blank]
168
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
AUTOTOTE CORPORATION
By:_________________________________
Name:
Title:
Notice Address:
[ ]
Tel.: [ ]
Fax: [ ]
S-1
LENDERS:
DLJ CAPITAL FUNDING, INC., individually
and as Administrative Agent and
Syndication Agent
By:_________________________________
Name:
Title:
Notice Address:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: [ ]
Tel.: 000-000-0000
Fax: 000-000-0000
XXXXXX COMMERCIAL PAPER INC.,
individually and as Documentation Agent
By:_________________________________
Name:
Title:
Notice Address:
____________________________________
____________________________________
Attention:__________________________
Tel.:_______________________________
Fax:________________________________
S-2
XXXXXX BROTHERS INC., as Co-Arranger
By:_________________________________
Name:
Title:
Notice Address:
____________________________________
____________________________________
Attention:__________________________
Tel.:_______________________________
Fax:________________________________
S-3
$345,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF OCTOBER 6, 2000
AMONG
AUTOTOTE CORPORATION,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
DLJ CAPITAL FUNDING, INC.,
AS SYNDICATION AGENT,
XXXXXX COMMERCIAL PAPER INC.,
AS DOCUMENTATION AGENT,
AND
DLJ CAPITAL FUNDING, INC.,
AS ADMINISTRATIVE AGENT
LEAD ARRANGER AND SOLE BOOK RUNNING MANAGER:
DLJ CAPITAL FUNDING, INC.
CO-ARRANGER:
XXXXXX BROTHERS INC.
$345,000,000
AUTOTOTE CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
Section 1. DEFINITIONS......................................................2
1.1 Defined Terms....................................................2
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement....................................35
1.3 Other Definitional Provisions and Rules of Construction.........36
Section 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS......................36
2.1 Commitments; Making of Loans; Notes.............................36
2.2 Interest on the Loans...........................................45
2.3 Fees............................................................49
2.4 Repayments, Prepayments and Reductions in Loan Commitments;
General Provisions Regarding Payments...........................50
2.5 Use of Proceeds.................................................60
2.6 Special Provisions Governing LIBO Rate Loans....................61
2.7 Increased Costs; Taxes; Capital Adequacy........................63
2.8 Obligation of Lenders and Issuing Lenders to Mitigate;
Replacement of Lender...........................................67
Section 3. LETTERS OF CREDIT...............................................69
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein..........................................69
3.2 Letter of Credit Fees...........................................72
3.3 Drawings and Reimbursement of Amounts Paid Under Letters of
Credit..........................................................73
3.4 Obligations Absolute............................................75
3.5 Indemnification; Nature of Issuing Lenders' Duties..............76
3.6 Increased Costs and Taxes Relating to Letters of Credit.........77
Section 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT.......................78
4.1 Conditions to Initial Loans.....................................78
4.2 Conditions to All Loans.........................................89
4.3 Conditions to Letters of Credit.................................90
4.4 Restatement Effective Date Conditions...........................90
Section 5. COMPANY'S REPRESENTATIONS AND WARRANTIES........................93
5.1 Organization, Powers, Qualification, Good Standing,
PAGE
Business and Subsidiaries.......................................93
5.2 Authorization of Borrowing, etc.................................94
5.3 Financial Condition.............................................96
5.4 No Material Adverse Change; No Restricted Junior Payments.......96
5.5 Title to Properties; Liens; Real Property.......................96
5.6 Litigation; Adverse Facts.......................................97
5.7 Payment of Taxes................................................97
5.8 Performance of Agreements; Materially Adverse Agreements........98
5.9 Governmental Regulation.........................................98
5.10 Securities Activities...........................................98
5.11 Employee Benefit Plans..........................................98
5.12 Certain Fees....................................................99
5.13 Environmental Protection.......................................100
5.14 Employee Matters...............................................101
5.15 Solvency.......................................................101
5.16 Matters Relating to Collateral.................................101
5.17 Related Agreements.............................................102
5.18 Disclosure.....................................................102
5.19 Certain Jurisdictions..........................................102
Section 6. COMPANY'S AFFIRMATIVE COVENANTS................................102
6.1 Financial Statements and Other Reports.........................103
6.2 Legal Existence, etc...........................................108
6.3 Payment of Taxes and Claims; Tax Consolidation.................109
6.4 Maintenance of Properties; Insurance; Application of Net
Insurance/Condemnation Proceeds................................109
6.5 Inspection Rights; Lender Meeting..............................112
6.6 Compliance with Laws, etc......................................112
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws......112
6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries; IP Collateral....................................115
6.9 Leasehold Properties; Matters Relating to Additional Real
Property Collateral; Certain Opinions; Removal of Liens........116
6.10 Interest Rate Protection.......................................120
6.11 Fiscal Year....................................................120
6.12 Connecticut Lottery Corporation................................120
6.13 Delisting......................................................120
ii
Section 7. COMPANY'S NEGATIVE COVENANTS...................................121
7.1 Indebtedness...................................................121
7.2 Liens and Related Matters......................................123
7.3 Investments; Joint Ventures....................................127
7.4 Contingent Obligations.........................................128
7.5 Restricted Junior Payments.....................................129
7.6 Financial Covenants............................................130
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions...................................................132
7.8 Consolidated Capital Expenditures..............................135
7.9 Sales and Lease-Backs..........................................135
7.10 Sale or Discount of Receivables................................136
7.11 Transactions with Stockholders and Affiliates..................136
7.12 Disposal of Subsidiary Equity..................................137
7.13 Conduct of Business............................................137
7.14 Amendments or Waivers of Related Agreements....................137
7.15 Fiscal Year....................................................138
7.16 Consolidated Capital Software Expenditures.....................138
7.17 Margin Stock...................................................139
Section 8. EVENTS OF DEFAULT..............................................139
8.1 Failure to Make Payments When Due..............................139
8.2 Default in Other Agreements....................................139
8.3 Breach of Certain Covenants....................................139
8.4 Breach of Warranty.............................................140
8.5 Other Defaults Under Loan Documents............................140
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc...........140
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.............140
8.8 Judgments and Attachments......................................141
8.9 Dissolution....................................................141
8.10 Employee Benefit Plans.........................................141
8.11 Change in Control..............................................141
8.12 Invalidity of Guaranties; Failure of Security; Repudiation
of Obligations.................................................141
Section 9. THE AGENTS.....................................................142
9.1 Appointment....................................................142
9.2 Powers and Duties; General Immunity............................144
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness..................................145
9.4 Right to Indemnity.............................................145
9.5 Successor Agents and Swing Line Lender.........................146
9.6 Collateral Documents and Guaranties............................146
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Section 10. MISCELLANEOUS..................................................147
10.1 Successors and Assigns.........................................147
10.2 Expenses.......................................................149
10.3 Indemnity......................................................150
10.4 Set-Off; Security Interest in Deposit Accounts.................151
10.5 Ratable Sharing................................................152
10.6 Amendments and Waivers.........................................152
10.7 Independence of Covenants......................................155
10.8 Notices........................................................155
10.9 Survival of Representations, Warranties and Agreements.........155
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative..........155
10.11 Marshalling; Payments Set Aside................................156
10.12 Severability...................................................156
10.13 Obligations Several; Independent Nature of Lenders' Rights.....156
10.14 Headings.......................................................156
10.15 Applicable Law.................................................156
10.17 Consent to Jurisdiction and Service of Process.................157
10.18 Waiver of Jury Trial...........................................158
10.19 Confidentiality................................................158
10.20 Counterparts; Effectiveness....................................159
Signature pages......................................................S-1
iv
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF REQUEST FOR ISSUANCE OF LETTER OF CREDIT
IV-A FORM OF TRANCHE A TERM NOTE
IV-B FORM OF TRANCHE B TERM NOTE
IV-C FORM OF REVOLVING NOTE
IV-D FORM OF SWING LINE NOTE
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF FINANCIAL CONDITION CERTIFICATE
VII-A FORM OF CLOSING DATE OPINION OF XXXXXX XXXXX XXXXXXXX &
XXXXXXX L.L.P
VII-B FORM OF CLOSING DATE OPINION OF XXXXX, XXXXXXXX & XXXXXXX, LLP
VII-C FORM OF CLOSING DATE OPINION OF SILLS, CUMMIS, RADIN,
TISCHMAN, XXXXXXX & GROSS P.A.
VII-D FORM OF CLOSING DATE OPINION OF TOBIN, CARBERRY, X'XXXXXX,
XXXXX & XXXXXXXX, P.C.
VII-E FORM OF CLOSING DATE OPINION OF XXXXXX XXXXXX
VII-F FORM OF CLOSING DATE OPINION OF XXXXXX X. XXXXXXX, ESQ.
VII-G FORM OF CLOSING DATE OPINION OF C. XXXX XXXXXX, ESQ.
VIII FORM OF OPINION OF O'MELVENY & XXXXX LLP
IX FORM OF ASSIGNMENT AGREEMENT
X FORM OF CERTIFICATE RE NON-BANK STATUS
XI INTENTIONALLY OMITTED
XII FORM OF SECURITY AGREEMENT
XIII FORM OF SUBSIDIARY GUARANTY
XIV FORM OF AGREEMENT OF JOINDER
v
XV FORM OF COLLATERAL ACCESS AGREEMENT
XVI MASTER RESTATEMENT CONFIRMATION
XVII FORM OF RESTATEMENT EFFECTIVE DATE OPINION OF XXXXXX XXXXX
XXXXXXXX & XXXXXXX L.L.P
XVIII FORM OF RESTATEMENT EFFECTIVE DATE OPINION OF XXXXXX X.
XXXXXXX, ESQ.
XIX FORM OF RESTATEMENT EFFECTIVE DATE OPINION OF O'MELVENY &
XXXXX LLP
vi
SCHEDULES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.6 LITIGATION
5.13 ENVIRONMENTAL MATTERS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.2C(a) CERTAIN EXISTING AGREEMENTS WITH GOVERNMENTAL AUTHORITIES
PROHIBITING THE ASSUMPTION OR CREATION OF LIENS
7.2C(e) EXISTING RIGHTS OF FIRST REFUSAL WITH RESPECT TO INTERESTS IN
CERTAIN SUBSIDIARIES AND JOINT VENTURES
7.2C(g) CERTAIN AGREEMENTS PROHIBITING THE CREATION OR ASSUMPTION OF ANY
LIEN ON ASSETS
7.2D(a) CERTAIN EXISTING AGREEMENTS WITH GOVERNMENTAL AUTHORITIES
RESTRICTING THE ABILITY TO TRANSFER ASSETS
7.2D(c) CERTAIN AGREEMENTS RESTRICTING THE PAYMENT OF DIVIDENDS AND THE
MAKING OF DISTRIBUTIONS ON EQUITY INTERESTS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.11(vi) TRANSACTIONS WITH AFFILIATES
vii
