EXHIBIT 10.1
EXECUTION COPY
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$400,000,000
FIVE-YEAR REVOLVING CREDIT AGREEMENT
Dated as of April 14, 2005
among
THE READER'S DIGEST ASSOCIATION, INC.
as Borrower and Guarantor
BOOKS ARE FUN, LTD.,
QSP, INC.
and
XXXXXX MEDIA GROUP, INC.
as Borrowing Subsidiaries and Subsidiary Guarantors
The Lenders Party Hereto
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
and Collateral Agent
THE ROYAL BANK OF SCOTLAND PLC,
as Syndication Agent
and
COMMERZBANK AG, NEW YORK BRANCH,
HSBC BANK USA, NATIONAL ASSOCIATION
and
WACHOVIA BANK, NATIONAL ASSOCIATION
as Co-Documentation Agents
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X.X. XXXXXX SECURITIES, INC. RBS SECURITIES CORPORATION
AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Definitions....................................................1
SECTION 1.02. Classification of Loans and Borrowings........................20
SECTION 1.03. Terms Generally...............................................20
SECTION 1.04. Accounting Terms and Determinations...........................20
ARTICLE II
The Loans
SECTION 2.01. Commitments...................................................21
SECTION 2.02. Loans.........................................................21
SECTION 2.03. Requests for Borrowings.......................................22
SECTION 2.04. Funding of Borrowings.........................................22
SECTION 2.05. Repayment of Loans; Evidence of Debt..........................23
SECTION 2.06. Interest Elections............................................23
SECTION 2.07. Fees..........................................................25
SECTION 2.08. Interest on Loans.............................................25
SECTION 2.09. Default Interest..............................................26
SECTION 2.10. Alternate Rate of Interest....................................26
SECTION 2.11. Termination and Reduction of Commitments......................26
SECTION 2.12. Mandatory Offer to Reduce Commitments.........................27
SECTION 2.13. Increase in Commitments.......................................28
SECTION 2.14. Prepayment....................................................29
SECTION 2.15. Reserve Requirements; Change in Circumstances.................30
SECTION 2.16. Change in Legality............................................31
SECTION 2.17. Indemnity.....................................................32
SECTION 2.18. Pro Rata Treatment............................................33
SECTION 2.19. Sharing of Setoffs............................................33
SECTION 2.20. Payments......................................................33
SECTION 2.21. Taxes.........................................................34
SECTION 2.22. Duty to Mitigate; Assignment of Rights Under Certain
Circumstances...............................................35
ARTICLE III
Conditions
SECTION 3.01. Effectiveness.................................................36
SECTION 3.02. Borrowings....................................................38
ARTICLE IV
Representations and Warranties
SECTION 4.01. Organization; Powers..........................................38
SECTION 4.02. Authorization; Enforceability.................................38
SECTION 4.03. Governmental Approvals; No Conflicts..........................39
SECTION 4.04. Financial Condition; No Material Adverse Change...............39
SECTION 4.05. Properties....................................................39
SECTION 4.06. Litigation and Environmental Matters..........................40
SECTION 4.07. Compliance with Laws and Agreements...........................40
SECTION 4.08. Not an Investment Company or Holding Company..................40
SECTION 4.09. Taxes.........................................................40
SECTION 4.10. ERISA.........................................................40
SECTION 4.11. Disclosure....................................................40
SECTION 4.12. Federal Reserve Regulations...................................41
SECTION 4.13. Subsidiaries..................................................41
SECTION 4.14. Security Documents............................................41
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other Information....................42
SECTION 5.02. Notices of Material Events....................................43
SECTION 5.03. Existence; Conduct of Business................................43
SECTION 5.04. Payment of Obligations........................................44
SECTION 5.05. Maintenance of Properties; Insurance..........................44
SECTION 5.06. Books and Records; Inspection Rights..........................44
SECTION 5.07. Compliance with Laws..........................................44
SECTION 5.08. Use of Proceeds...............................................44
SECTION 5.09. Information Regarding Collateral..............................45
SECTION 5.10. Further Assurances............................................45
SECTION 5.11. Compliance with Federal Reserve Regulations...................45
ARTICLE VI
Negative Covenants
SECTION 6.01. Debt and Preferred Stock of Subsidiaries......................45
SECTION 6.02. Liens.........................................................46
SECTION 6.03. Sale and Leaseback Transactions...............................48
SECTION 6.04. Fundamental Changes...........................................48
SECTION 6.05. Transactions with Affiliates..................................49
SECTION 6.06. Restrictive Agreements........................................50
SECTION 6.07. Swap Agreements...............................................50
SECTION 6.08. Consolidated Interest Coverage Ratio..........................50
2
SECTION 6.09. Consolidated Leverage Ratio...................................50
ARTICLE VII
Events Of Default
ARTICLE VIII
The Agents
ARTICLE IX
Joint And Several Liability Of Borrowers; Guarantee; Subsidiary Guarantees
SECTION 9.01. Joint and Several Liability of Borrowers......................55
SECTION 9.02. Guarantee.....................................................55
SECTION 9.03. Subsidiary Guarantees.........................................56
ARTICLE X
Miscellaneous
SECTION 10.01. Notices.......................................................58
SECTION 10.02. Waivers; Amendments...........................................59
SECTION 10.03. Expenses; Indemnity; Damage Waiver............................60
SECTION 10.04. Successors and Assigns........................................61
SECTION 10.05. Survival......................................................65
SECTION 10.06. Counterparts; Integration; Effectiveness......................65
SECTION 10.07. Severability..................................................66
SECTION 10.08. Right of Setoff...............................................66
SECTION 10.09. Governing Law; Jurisdiction; Consent to Service of Process....66
SECTION 10.10. WAIVER OF JURY TRIAL..........................................67
SECTION 10.11. Headings......................................................67
SECTION 10.12. Confidentiality...............................................67
SECTION 10.13. Conversion of Currencies......................................68
SECTION 10.14. Release of Loan Parties and Collateral........................69
SECTION 10.15. Security Documents............................................70
SECTION 10.16. Power of Attorney.............................................70
SECTION 10.17. Appointment...................................................71
SECTION 10.18. U.S.A. Patriot Act............................................71
3
FIVE-YEAR REVOLVING CREDIT AGREEMENT dated as of April
14, 2005 (this "Agreement"), among THE READER'S DIGEST
ASSOCIATION, INC., as a Borrower and as the Guarantor (each
as defined herein), BOOKS ARE FUN, LTD., QSP, INC., and
XXXXXX MEDIA GROUP, INC., as Borrowing Subsidiaries (as
defined herein) and Subsidiary Guarantors (as defined
herein), the LENDERS (as defined herein) and JPMORGAN CHASE
BANK, N.A., as administrative agent and as collateral agent.
The Borrowers (such term and each other capitalized term used but not
otherwise defined herein having the meaning assigned to it in Article I) have
requested that the Lenders extend commitments under which they may obtain Loans
in an aggregate principal amount at any time outstanding not in excess of
$400,000,000 (as such amount may be reduced pursuant to Section 2.11 or Section
2.12 or increased pursuant to Section 2.13), and the Lenders are prepared to
extend such commitments on the terms and subject to the conditions set forth
herein.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINITIONS. The following terms, as used herein, have
the following meanings:
"ABR BORROWING" means a Borrowing comprised of ABR Loans.
"ABR LOAN" means any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means JPMCB in its capacity as administrative
agent for the Lenders hereunder, and its successors in such capacity.
"ADMINISTRATIVE FEES" shall have the meaning assigned to such term in
Section 2.07.
"ADMINISTRATIVE QUESTIONNAIRE" means an administrative questionnaire
in the form of Exhibit A hereto.
"AFFILIATE" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"AGENTS" means the Administrative Agent and the Collateral Agent.
"AGREEMENT CURRENCY" has the meaning set forth in Section 10.13(b).
"ALTERNATE BASE RATE" means, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in
effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to
a change in the Prime Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Effective Rate, respectively.
"APPLICABLE CREDITOR" has the meaning set forth in Section 10.13(b).
"APPLICABLE PERCENTAGE" shall mean, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment.
"APPLICABLE RATE" means on any date, with respect to any Loan or with
respect to the Commitment Fees payable hereunder, the applicable rate per annum
set forth below under the caption "Eurodollar Spread" (in the case of a
Eurodollar Loan), "ABR Spread" (in the case of an ABR Loan) or "Commitment Fees"
(in the case of Commitment Fees), as the case may be, based upon the
Consolidated Leverage Ratio as of the most recent determination date:
Pricing Table
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CONSOLIDATED EURODOLLAR ABR SPREAD COMMITMENT
LEVERAGE RATIO SPREAD FEES
-------------------------------------------------------------
XXXXX 0 1.50% 0.50% 0.375%
>
-3.0
-------------------------------------------------------------
XXXXX 0 1.25% 0.25% 0.250%
>
-2.5 and <3.0
-------------------------------------------------------------
XXXXX 0 1.00% 0.00% 0.200%
>
-2.0 and <2.5
-------------------------------------------------------------
XXXXX 0 0.75% 0.00% 0.175%
>
-1.5 and <2.0
-------------------------------------------------------------
XXXXX 0 0.50% 0.00% 0.150%
<
-1.5
-------------------------------------------------------------
The Consolidated Leverage Ratio used on any date to determine the Applicable
Rate shall be that in effect at the end of the most recent fiscal quarter for
which financial statements have been delivered pursuant to Section 5.01(a) or
(b) (or, prior to the delivery of the first financial statements delivered
pursuant to Section 5.01(a) or (b), the financial statements referred to in
Section 4.04(a)(ii)); PROVIDED, that if any financial statements required to
have been delivered under Section 5.01(a) or (b) shall not at any time have been
delivered, the Applicable Rate shall, until such financial statements shall have
been delivered, be determined by reference to Level 1 in the above table.
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"APPROVED FUND" has the meaning set forth in Section 10.04.
"ARRANGERS" means X.X. Xxxxxx Securities Inc. and RBS Securities
Corporation.
"ASSET SALE" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of the Company or
any Subsidiary to any Person other than the Company or a directly or
indirectly wholly owned Subsidiary, other than sales of inventory or used
or surplus equipment in the ordinary course of business and any sale or
discounting, in each case without recourse, of accounts receivable in the
ordinary course of business in connection with the compromise or
collection thereof; or
(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Company or any Subsidiary; or
(c) the issuance and sale by any Subsidiary of any Equity Interests
to any Person other than the Company or a directly or indirectly wholly
owned Subsidiary.
"ASSIGNEE" means a Person to whom any Lender has assigned all or a
portion of its rights and obligations under this Agreement (including if the
Commitments remain in effect, all or a portion of its Commitments and the Loans
at the time owing to it) pursuant to Section 10.04.
"ASSIGNMENT AND ASSUMPTION" means an agreement substantially in the
form of Exhibit B hereto.
"AVAILABILITY PERIOD" means the period from and including the
Effective Date and to but excluding the earlier of the Maturity Date and the
date of the termination of the Commitments.
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States.
"BORROWER" means the Company or any Borrowing Subsidiary.
"BORROWING" means Loans of the same Type and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect.
"BORROWING REQUEST" means a request for a Borrowing in accordance
with Section 2.03.
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"BORROWING SUBSIDIARY" means any Subsidiary named as such in the
heading of this Agreement.
"BUSINESS DAY" means any day (other than a Saturday, Sunday or legal
holiday in the State of New York) on which banks are open for business in New
York City; PROVIDED, HOWEVER, that when used in connection with a Eurodollar
Loan, the term "BUSINESS DAY" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"CANADIAN SUBSIDIARY" means The Reader's Digest Association
(Canada) Ltd.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
A "CHANGE IN CONTROL" shall be deemed to have occurred if (a) any
person or group shall have "beneficial ownership" (as defined in Rule 13d-3
under the Securities Exchange Act of 1934, as in effect as of the date hereof)
of Equity Interests representing 35% or more of the voting power represented by
the issued and outstanding Equity Interests of the Company; or (b) during any
period of 12 consecutive calendar months, (i) the directors (the "preceding
directors") constituting the Company's board of directors at the beginning of
such period and (ii) any new directors whose election by the Company's directors
or whose nomination for election by the Company's stockholders was, in each
case, approved by a majority of the Company's directors then in office who were
either preceding directors or whose election or nomination for election was
previously so approved, when all such directors are taken together, shall cease
for any reason to constitute a majority of the Company's board of directors. As
used in this definition, "group" shall have the meaning given to such term in
Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the date
hereof. In the event the Company shall merge into another Person in a
transaction permitted by Section 6.04, the term "Company" shall, for purposes of
determining the "preceding directors", have the meaning assigned to it hereunder
as of the beginning of any relevant 12 month period.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof after the date of this Agreement
or (c) compliance by any Lender with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CHARGE OVER SHARES" means the Charge over Shares in The Reader's
Digest Association Limited dated the date hereof between The Reader's Digest
Association, Inc. and JPMorgan Chase Bank, N.A.
4
"CLO" has the meaning set forth in Section 10.04.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" means "Collateral" as defined in the Pledge Agreement
and any other property or assets in which Liens are created to secure the
Obligations under any other Security Document.
"COLLATERAL AGENT" means JPMCB, in its capacity as collateral agent
for the Lenders.
"COLLATERAL REQUIREMENT" means, at any time, subject to Section
10.14, the requirement that:
(a) the Administrative Agent shall have received from the Company and
each Borrowing Subsidiary a counterpart of the Pledge Agreement duly
executed and delivered on behalf of the Company or such Borrowing
Subsidiary;
(b) all outstanding Equity Interests of (i) any Domestic Subsidiary
directly owned by any Loan Party at such time other than Excluded
Subsidiaries and (ii) the Canadian Subsidiary shall have been pledged
pursuant to the Pledge Agreement (except that the Loan Parties shall not
be required to pledge more than 65% of outstanding voting Equity Interests
of the Canadian Subsidiary) and the Collateral Agent shall have received
certificates representing all such Equity Interests (other than
uncertificated Equity Interests), together with undated stock powers or
other instruments of transfer with respect thereto endorsed in blank;
(c) the Administrative Agent shall have received Foreign Pledge
Agreements in connection with the pledge of 65% of the outstanding voting
Equity Interests of any Foreign Subsidiary that is directly owned by any
Loan Party and has, together with its own subsidiaries, accounted for 5%
or more of Consolidated Revenue for the most recently ended fiscal year
and 2% or more of Consolidated Assets at the end of such most recently
ended fiscal year (other than the Canadian Subsidiary) and the Collateral
Agent shall have received certificates representing all such Equity
Interests (other than uncertificated Equity Interests);
(d) all documents and instruments, including all Uniform Commercial
Code financing statements, required by law or reasonably requested by the
Collateral Agent to be filed, registered or recorded to perfect the Liens
intended to be created by the Pledge Agreement shall have been filed,
registered or recorded or delivered to the Collateral Agent for filing,
registration or recording; and
(e) each Loan Party shall have obtained all consents and approvals
required to be obtained by it in connection with the execution and
delivery of the Pledge Agreement and each other Security Document to which
it is a party, the performance of its obligations thereunder and the
granting by it of the Liens thereunder;
5
The Collateral Agent may grant extensions of time for the perfection of pledges
in or the obtaining of legal opinions with respect to particular Equity
Interests (including extensions beyond the Effective Date for the perfection of
pledges of Equity Interests owned by the Loan Parties on such date) where it
determines that perfection cannot be accomplished without undue effort or
expense by the time or times at which it would otherwise be required by this
Agreement or the Security Documents.
"COMMITMENT" means, with respect to each Lender, the commitment of
such Lender to make Loans hereunder, as such commitment may be (a) reduced from
time to time pursuant to Section 2.11 or Section 2.12, (b) increased from time
to time pursuant to Section 2.13 and (c) reduced or increased from time to time
pursuant to assignments by or to such Lender pursuant to Section 10.04. The
initial amount of each Lender's Commitment is set forth on Schedule 2.01, or in
the Assignment and Assumption pursuant to which such Lender shall have assumed
its Commitment, as applicable. The initial aggregate amount of the Lenders'
Commitments is $400,000,000.
"COMMITMENT FEE" shall have the meaning assigned to such term in
Section 2.07.
"COMPANY" means The Reader's Digest Association, Inc., a Delaware
corporation.
"CONSOLIDATED ASSETS" means, at any time, all assets of the Company
and its consolidated Subsidiaries at such date, as determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of the
Company and its consolidated Subsidiaries that are (or would be) set forth in a
consolidated statement of cash flows of the Company for such period prepared in
accordance with GAAP and (b) Capital Lease Obligations incurred by the Company
and its consolidated Subsidiaries during such period.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income
for such period PLUS, to the extent subtracted in computing such Consolidated
Net Income, the sum (without duplication) of (a) income tax expense, (b)
Interest Expense, (c) depreciation and amortization, (d) non-cash restructuring
charges, (e) non-cash expenses in respect of compensation paid to employees or
members of the Board of Directors of the Company in the form of equity
incentives, (f) non-cash impairment of goodwill and other intangibles, (g)
extraordinary losses and (h) the cumulative effect of changes in accounting
principles, MINUS, to the extent added in computing such Consolidated Net
Income, the sum (without duplication) of (x) consolidated interest income, (y)
extraordinary gains and (z) the cumulative effect of changes in accounting
principles. Notwithstanding the foregoing, for purposes of determining
Consolidated EBITDA, reductions in Consolidated Net Income in the five
consecutive fiscal quarters of the Company commencing with the fiscal quarter
ending June 30, 2004, that are attributable to the expensing during such fiscal
quarters of promotion costs capitalized by
6
the Company prior to June 30, 2004, shall be excluded; PROVIDED, that the
reductions in Consolidated Net Income that are excluded under this sentence
shall not exceed $66,500,000 in the aggregate.
"CONSOLIDATED INTEREST COVERAGE RATIO" means the ratio of (a)
Consolidated EBITDA to (b) Consolidated Net Interest Expense.
"CONSOLIDATED LEVERAGE RATIO" means, at any time, the ratio of (a)
Consolidated Total Debt at such time to (b) Consolidated EBITDA for the period
of four fiscal quarters ended at or most recently prior to such time.
"CONSOLIDATED NET INCOME" means, for the Company and the consolidated
Subsidiaries for any period, the aggregate net income (or net deficit) of such
persons, determined on a consolidated basis in accordance with GAAP consistently
applied.
"CONSOLIDATED NET INTEREST EXPENSE" means, with respect to the
Company and the consolidated Subsidiaries for any period, Interest Expense (net
of any interest income for such period determined on a consolidated basis in
accordance with GAAP).
"CONSOLIDATED REVENUE" means, for the Company and the consolidated
Subsidiaries for any period, the aggregate revenues of such persons, determined
on a consolidated basis in accordance with GAAP consistently applied.
"CONSOLIDATED TOTAL DEBT" means, for the Company and the consolidated
Subsidiaries at any date, the aggregate Debt of such persons, determined on a
consolidated basis in accordance with GAAP consistently applied.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" shall have meanings correlative thereto.
"DEBT" of any Person means, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect
of the deferred purchase price of property or services, (e) all Debt of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Debt secured thereby has been
assumed, (f) all Guarantees by such Person of Debt of others, (g) all Capital
Lease Obligations of such Person, (h) all Securitization Transactions of such
Person and (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit, letters of guaranty and banker's
acceptances; PROVIDED, HOWEVER, that Debt of any Person shall not include (i)
trade payables, (ii) any obligations of such Person incurred in connection with
letters of credit, letters of guaranty, banker's acceptances, bills of exchange
and similar instruments obtained or created in the ordinary course of business
to support or evidence obligations of such Person that do not constitute Debt,
7
(iii) endorsements of checks, bills of exchange and other instruments for
deposit or collection in the ordinary course of business, (iv) customer deposits
and advances and interest payable thereon in the ordinary course of business in
accordance with customary trade terms and other obligations incurred in the
ordinary course of business through credit on an open account basis customarily
extended to such Person, (v) any Debt secured on a non-recourse basis by any
assets of such Person to the extent that the outstanding balance thereof exceeds
the fair market value of such assets, (vi) statutory or other legal requirements
to make deposits in connection with sweepstakes or similar contests, or surety
bonds posted pursuant to such requirements and (vii) obligations under overdraft
arrangements with banks outside the United States incurred in the ordinary
course of business to cover working capital needs.
"DEFAULT" means any condition or event which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.06.
"DOLLARS" or "$" means lawful currency of the United States.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws
of the United States, any State thereof, the District of Columbia or any of its
territories or possessions or any political subdivision thereof.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 3.01 are satisfied and this Agreement becomes effective.
"ENVIRONMENTAL LAWS" means any and all federal, state and local
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges or releases of pollutants, contaminants, petroleum or petroleum
products, chemicals or industrial, toxic or hazardous substances or wastes into
the environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes or the clean-up or other
remediation thereof.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
directly or indirectly resulting from or based upon (a) violation or alleged
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other
8
consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"EQUITY INTEREST" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants or options or other rights to acquire any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder (other than an event for
which the 30-day notice period is waived), with respect to a Plan; (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Company or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate
from the PBGC or a plan administrator of any notice of termination, or the
intention to terminate, any Plan or Plans or to appoint a trustee to administer
any Plan where the Administrative Agent or the Required Lenders shall have
determined in good faith that such termination or appointment is reasonably
likely to result; (f) the incurrence by the Company or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal
from any Plan or Multiemployer Plan; or (g) the receipt by the Company or any
ERISA Affiliate of any notice of the imposition of, or an intention to impose,
Withdrawal Liability, where the Administrative Agent or the Required Lenders
shall have determined in good faith that such imposition is reasonably likely to
result or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA.
"EURODOLLAR BORROWING" means a Borrowing comprised of Eurodollar
Loans.
"EURODOLLAR LOAN" means any Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"EVENT OF DEFAULT" has the meaning set forth in Article VII.
"EXCLUDED SUBSIDIARIES" means, at any time, Domestic Subsidiaries
that do not represent more than 1% for any such Subsidiary, or more than 5% in
the aggregate for all such Subsidiaries, of either (a) Consolidated Assets or
(b) the consolidated revenues of the Company and the Subsidiaries for the period
of four fiscal quarters most
9
recently ended, and that (i) do not own Equity Interests or Debt (other than de
minimis Debt) of any Material Subsidiary, (ii) do not own material intellectual
property and (iii) do not have any Debt that is guaranteed by the Company or any
Material Subsidiary; PROVIDED that no Subsidiary that is a Borrowing Subsidiary
under this Agreement shall be an Excluded Subsidiary.
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of any Borrower hereunder, (a) income, franchise or other taxes
imposed on (or measured by) its net income by the United States, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
any Person referred to in the preceding clause (a) is located and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.22(b)), any withholding tax that is imposed by the
United States or by any other jurisdiction in which such Lender is organized or
has its principal office or its applicable lending office on amounts payable to
such Foreign Lender at the time such Foreign Lender becomes a party to this
Agreement (or designates a new lending office) or is attributable to such
Foreign Lender's failure to comply with Section 2.21(e), except to the extent
that such Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new lending office (or assignment), to receive additional
amounts from any Borrower with respect to such withholding tax pursuant to
Section 2.21(a).
"EXISTING FIVE-YEAR CREDIT AGREEMENT" means the Amended and Restated
Five-Year Revolving Credit and Competitive Advance Facility Agreement dated as
of May 20, 2002, as amended and restated, among the Company, certain borrowing
subsidiaries, certain lenders and JPMorgan Chase Bank, N.A., as administrative
agent.
"EXISTING TERM LOAN AGREEMENT" means the Term Loan Agreement dated as
of May 20, 2002, as amended and restated, among the Company, certain borrowing
subsidiaries, certain lenders and JPMorgan Chase Bank, N.A., as administrative
agent.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEES" means the Commitment Fees and the Administrative Fees.
"FINANCIAL OFFICER" of any Person shall mean the chief financial
officer, principal accounting officer, treasurer or comptroller of such Person.
10
"FOREIGN LENDER", with respect to any Loan, means any Lender making
such Loan that is organized under the laws of a jurisdiction other than the
United States.
"FOREIGN PLEDGE AGREEMENT" means a pledge agreement governed by the
law of a jurisdiction other than the United States and satisfactory in form and
substance to the Administrative Agent and the Company.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the laws of
a jurisdiction outside the United States or any of its territories or
possessions or any political subdivision thereof.
"GAAP" means United States generally accepted accounting principles,
applied on a consistent basis.
"GOVERNMENTAL AUTHORITY" means the government of the United States,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"GUARANTEE" means any agreement by which the Company or any
Subsidiary assumes, guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise becomes liable upon, the Debt of
another Person, or agrees to maintain the net worth or working capital or other
financial condition of such Person so as to enable such Person to pay such Debt
or otherwise assure any creditor of such Person against loss with respect to
such Debt, but shall not include (i) customary indemnifications, representations
and warranties made in connection with purchases, sales or leasing of property
or assets or issuances of securities, (ii) assurances given in the ordinary
course of business of the payment of obligations of customers or suppliers of
the Company or any Subsidiary and (iii) retained liability in connection with
sales of accounts receivable or chattel paper in the ordinary course of business
(but only to the extent customary in connection with sales accounted for as true
sales).
"GUARANTOR" means the Company, in its capacity as guarantor of the
Obligations hereunder.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature which in each case are
regulated pursuant to any Environmental Law.
"INDEMNIFIED TAXES" means Taxes, including Other Taxes, but
excluding Excluded Taxes.
"INDEMNITEE" shall have the meaning assigned to such term in Section
10.03(b).
11
"INFORMATION" shall have the meaning assigned to such term in Section
10.12.
"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated March 2005 relating to the Company and the Transactions.
"INTEREST ELECTION REQUEST" means, a request by any Company to
convert or continue a Borrowing in accordance with Section 2.06.
"INTEREST EXPENSE" means, for any period, the interest expense of the
Company and the consolidated Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP (and giving effect to any Swap
Agreements that have the effect of increasing or decreasing such interest
expense), including (i) the amortization of debt discounts to the extent
included in interest expense in accordance with GAAP, (ii) the amortization of
all fees (including fees with respect to interest rate protection agreements or
other interest rate hedging agreements) payable in connection with the
incurrence of indebtedness to the extent included in interest expense in
accordance with GAAP and (iii) the portion of any rents payable under capital
leases allocable to interest expense in accordance with GAAP. Notwithstanding
the foregoing, "Interest Expense" shall not include accelerated amortization of
fees previously paid in connection with the Existing Term Loan Agreement.
"INTEREST PAYMENT DATE" means (a) with respect to any Loan, the last
day of each Interest Period applicable to the Borrowing of which such Loan is a
part and, in addition, the date of any prepayment of such Loan or conversion of
such Loan to a Loan of a different Type and (b) in the case of a Eurodollar Loan
with an Interest Period of more than three months' duration, each day that would
have been an Interest Payment Date for such Loan had successive Interest Periods
of three months' duration been applicable to such Loan.
"INTEREST PERIOD" means (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter, as the Borrower may elect and (b) as to any ABR
Borrowing, the period commencing on the date of such Borrowing or on the last
day of the immediately preceding Interest Period applicable to such Borrowing,
as the case may be, and ending on the earliest of (i) the next succeeding March
31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii) the
date such Borrowing is converted to a Borrowing of a different Type or repaid or
prepaid in accordance with Section 2.05 or Section 2.14; PROVIDED, HOWEVER, that
if any Interest Period would end on a day other than a Business Day, such
Interest Period shall be extended to the next succeeding Business Day unless, in
the case of Eurodollar Loans only, such next succeeding Business Day would fall
in the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day. Interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest Period.
12
"JPMCB" means JPMorgan Chase Bank, N.A., and its successors.
"JUDGMENT CURRENCY" shall have the meaning assigned to such term in
Section 10.13(b).
"LENDERS" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the interest rate per annum (rounded upwards, if necessary, to
the next 1/100 of 1%) appearing on Dow Xxxxx Telerate Page 3750 (or any
successor page) as of 11:00 a.m. (London time) on the date two Business Days
prior to the commencement of such Interest Period for deposits in Dollars with a
maturity comparable to such Interest Period or, in the event no such rate
appears on Dow Xxxxx Telerate Page 3750 (or any successor page), the rate at
which deposits in Dollars approximately equal in principal amount to such
Borrowing and for a maturity comparable to such Interest Period are offered to
the principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, the Company or any Subsidiary shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
"LOAN" means a loan made by a Lender to a Borrower pursuant to this
Agreement.
"LOAN DOCUMENTS" means this Agreement, the Pledge Agreement, the
Foreign Pledge Agreements and the notes and each amendment, supplement,
modification, consent or waiver of, to or in respect of any of the foregoing.
"LOAN PARTIES" means the Company and the Borrowing Subsidiaries.
"LONG-TERM DEBT" means any Debt that, in accordance with GAAP,
constitutes (or, when incurred, constituted) a long-term liability.
"MATERIAL ADVERSE EFFECT" means (a) a materially adverse effect on
the business, assets, results of operations or financial condition of the
Company and its Subsidiaries, taken as a whole, (b) material impairment of the
ability of the Company and its Subsidiaries, taken as a whole, to perform the
Obligations or (c) material impairment of the rights available to the Lenders or
the Agents under any Loan Document.
13
"MATERIAL DEBT" means Debt (other than the Loans), or obligations in
respect of one or more Swap Agreements, of any one or more of the Company and
its Subsidiaries in an aggregate principal amount exceeding $20,000,000 (or the
equivalent thereof in one or more other currencies).
"MATERIAL SUBSIDIARY" means, at any time, each Subsidiary other than
(a) Excluded Subsidiaries and (b) Foreign Subsidiaries that do not represent
more than 1% for any such Foreign Subsidiary, or more than 5% in the aggregate
for all such Foreign Subsidiaries, of either (a) Consolidated Assets or (b) the
Consolidated Revenues of the Company and the Subsidiaries for the period of four
fiscal quarters most recently ended, and that (i) do not own Equity Interests or
Debt (other than de minimis Debt) of any Material Subsidiary, (ii) do not own
material intellectual property and (iii) do not have any Debt that is guaranteed
by the Company or any Material Subsidiary; PROVIDED that each Subsidiary that is
a Borrowing Subsidiary under this Agreement shall be a Material Subsidiary.
"MATURITY DATe" means April 14, 2010.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, (a) the
cash proceeds received in respect of such event including (i) any cash received
in respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all fees and out-of-pocket expenses (including underwriting discounts and
commissions, attorneys fees and investment banking fees and costs) paid by the
Company and the Subsidiaries to third parties (other than Affiliates) in
connection with such event, (ii) the amount of all payments required to be made
by the Company and the Subsidiaries as a result of such event to repay
Indebtedness secured by the subject assets, (iii) the amount of all taxes paid
(or estimated in good faith to be payable) by the Company and the Subsidiaries
that are directly attributable to such event, and (iv) the amount of any
payments that the Company estimates in good faith will be required to be made in
respect of contingent liabilities directly attributable to such event and set
forth in a notice delivered to the Administrative Agent (PROVIDED that the
Company will evaluate in good faith not less often than quarterly any estimate
resulting in a reduction of Net Cash Proceeds under this clause (iv) and will
promptly notify the Administrative Agent if the estimated amount of payments in
respect of any contingent liability shall be reduced, and the Company and the
Subsidiaries shall be deemed to have received Net Cash Proceeds equal to the
amount of any such reduction).
"OBLIGATIONS" means (a) the due and punctual payment of (i) the
principal of and interest (including interest accruing during the pendency of
any bankruptcy, insolvency, receivership or other similar proceeding, regardless
of whether allowed or
14
allowable in such proceeding) on the Loans, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, and (ii) all other monetary obligations of the Loan Parties to any of
the Secured Parties under this Agreement and each of the other Loan Documents,
including fees, costs, expenses and indemnities, whether primary, secondary,
direct, contingent, fixed or otherwise (including monetary obligations incurred
during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), (b)
the due and punctual performance of all other obligations of the Loan Parties
under this Agreement and the other Loan Documents and (c) the due and punctual
payment and performance of all obligations of the Company or any Subsidiary
under or in connection with each Swap Agreement and cash management arrangement
or agreement that (i) shall have been in effect on the Effective Date with a
counterparty that shall have been a Lender or an Affiliate of a Lender as of the
Effective Date or (ii) shall have been entered into after the Effective Date
with any counterparty that shall have been a Lender or an Affiliate of a Lender
at the time such Swap Agreement or cash management arrangement or agreement was
entered into.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution or delivery
of, or otherwise with respect to, this Agreement.
"PARTICIPANT" has the meaning set forth in Section 10.04.
"PAYMENT LOCATION" shall mean an office, branch or other place of
business of any Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERFECTION CERTIFICATE" means a certificate in the form of Exhibit D
or any other form approved by the Collateral Agent.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for Taxes, fees, assessments or other
governmental charges or levies that are not yet due and payable or are
being contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, vendors' or lessors' Liens (and deposits to obtain the
release of such Liens), set-off rights and other like Liens imposed by law
(or contract, to the extent that such contractual Liens are similar in
nature and scope to Liens imposed by law), in each case arising in the
ordinary course of business and securing obligations that either (i) are
not overdue by more than 60 days or (ii) are being contested in compliance
with Section 5.04;
15
(c) Liens incurred and pledges and deposits made in the ordinary
course of business in connection with workers' compensation, disability or
unemployment insurance, old-age pensions, retiree health benefits and
other similar plans or programs and other social security laws or
regulations;
(d) deposits (including deposits made to satisfy statutory or other
legal obligations in connection with sweepstakes or similar contests) to
secure the performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of
business;
(e) (i) easements, covenants, conditions, restrictions, zoning
restrictions, building codes, land use laws, leases, subleases, licenses,
rights of way, minor irregularities in, or lack of, title and similar
encumbrances affecting real property, (ii) with respect to any lessee's or
licensee's interest in real or personal property, mortgages, liens, rights
and obligations and other encumbrances arising by, through or under any
owner, lessor or licensor thereof, with or without the lessee's or
licensee's consent, and (iii) leases, licenses, rights and obligations in
connection with patents, copyrights, trademarks, tradenames and other
intellectual property, in each case that do not secure the payment of
borrowed money (other than, with respect to any lessee's or licensee's
interest in real or personal property, mortgages, liens, rights and
obligations and other encumbrances arising by, through or under any owner,
lessor or licensor thereof) to the extent, in the case of each of (i),
(ii) and (iii), that the Liens referred to therein do not, in the
aggregate, materially detract from the value of the affected property as
used by the Company or any Subsidiary in the ordinary course of business
or materially interfere with the ordinary conduct of the business of the
Company and its Subsidiaries, taken as a whole;
(f) Liens in favor of customs and revenue authorities to secure
payment of customs duties in connection with the importation of goods;
PROVIDED that "Permitted Encumbrances" shall not include any Lien securing
Debt.
"PERMITTED INVESTMENTS" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States (or
by any agency thereof to the extent such obligations are backed by the
full faith and credit of the United States), in each case maturing within
one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition
thereof issued or
16
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the
laws of the United States or any State thereof which has a short term
deposit rating of A1 from S&P and P1 from Moody's and has a combined
capital and surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria described in
clause (c) above; and
(e) money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company
Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody's and (iii) have
portfolio assets of at least $5,000,000,000.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, a limited liability partnership, an association, a trust or
any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PLEDGE AGREEMENT" means the Pledge Agreement among the Company, the
Collateral Agent and the Subsidiary Guarantors substantially in the form of
Exhibit C.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by JPMCB as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"RATINGS REQUIREMENT" shall mean the requirement that the Company's
senior unsecured non-credit enhanced indebtedness for borrowed money be rated
BBB- (with a stable outlook) or higher by S&P and Baa3 (with a stable outlook)
or higher by Moody's (or, if the Company shall have no senior unsecured
non-credit enhanced indebtedness for borrowed money, that the Company's
corporate credit rating be BBB- (with a stable outlook) or higher by S&P and
Baa3 (with a stable outlook) or higher by Moody's); PROVIDED that if at any time
either Moody's or S&P, or both, shall no longer maintain a rating for the
Company's senior unsecured non-credit enhanced indebtedness for borrowed money,
or no longer maintain a corporate credit rating for the Company, as the case may
be, the Administrative Agent and the Company may agree to determine the Ratings
Requirement using the corresponding ratings level of one or more Nationally
Recognized Statistical Rating Organizations (as defined in Rule 436 under the
Securities Act of 1933).
17
"REGISTER" shall have the meaning assigned to such term in Section
10.04(b).
"REGISTERED NOTE" shall have the meaning assigned to such term in
Section 2.05(e).
"REGULATION U" means Regulation U of the Board, as in effect from
time to time.
"REGULATION X" means Regulation X of the Board, as in effect from
time to time.
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing more than 50% of the sum of
aggregate Revolving Credit Exposures and unused Commitments at such time.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Loans of
such Lender.
"S&P" means Standard and Poor's Ratings Group, a division of
XxXxxx-Xxxx.
"SECURED PARTIES" has the meaning assigned to such term in the Pledge
Agreement.
"SECURITIZATION TRANSACTION" means any transfer by the Company or any
Subsidiary of accounts receivable or interests therein (a) to a trust,
partnership, corporation or other entity, which transfer is funded in whole or
in part, directly or indirectly, by the incurrence or issuance by the transferee
or any successor transferee of debt or other securities that are to receive
payments from, or that represent interests in, the cash flow derived from such
accounts receivable or interests, or (b) directly to one or more investors or
other purchasers. The amount of any Securitization Transaction shall be deemed
at any time to be the aggregate principal or stated amount of the Debt or other
securities referred to in the preceding sentence or, if there shall be no such
principal or stated amount, the uncollected amount of the accounts receivable
transferred pursuant to such Securitization Transaction net of any such accounts
receivable that have been written off as uncollectible.
"SECURITY DOCUMENTS" means the Pledge Agreement and the Foreign
Pledge Agreements.
"SENIOR NOTES" means the Company's 6-1/2% Senior Notes due 2011, as
the same may be refinanced.
18
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D or any comparable
regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power or, in the case
of a partnership, more than 50% of the general partnership interests are, as of
such date, owned by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Company.
"SUBSIDIARY GUARANTOR" means a Borrowing Subsidiary.
"SWAP AGREEMENT" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Company or the Subsidiaries shall be a Swap Agreement. The
"principal amount" of the obligations of the Company or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Company or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority, and all liabilities with respect thereto (including without
limitation any interest, penalties or other additions to tax).
19
"TRANSACTIONS" means the execution, delivery and performance by the
Loan Parties of the Loan Documents, the borrowing of Loans hereunder, the use of
the proceeds of such Loans, the creation of the Guarantees hereunder and the
creation of the Liens provided for in the Security Documents and the other
transactions contemplated hereby.
"TYPE", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, "RATE" shall include the LIBO
Rate and the Alternate Base Rate.
"UNITED STATES" and "U.S." each means the United States of America.
"U.S. PERSON" means any Person that is (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized under the laws of the United States or any State thereof or (iii) any
estate or trust that is subject to U.S. Federal income taxation regardless of
the source of its income.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan"). Borrowings also may be classified and referred to by Type
(e.g., a "Eurodollar Borrowing").
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement, (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights and (f) any reference
herein to "the date hereof" or "the date of this Agreement" shall mean the date
of this Amended and Restated Term Loan Agreement.
SECTION 1.04. ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required
20
to be delivered hereunder shall be prepared in accordance with GAAP as in effect
from time to time; PROVIDED that, if the Company notifies the Administrative
Agent that the Company wishes to amend any provision hereof, including, without
limitation, any covenant in Article VI, to eliminate the effect of any change in
generally accepted accounting principles adopted after the Effective Date on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders wish to amend any such provision for such purpose),
then the Company's compliance with such provision shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such provision is amended in
a manner satisfactory to the Company and the Required Lenders.
ARTICLE II
THE LOANS
SECTION 2.01. COMMITMENTS. (a) Subject to the terms and conditions set
forth herein, each Lender agrees, severally and not jointly, to make Loans to
any Borrower at any time and from time to time during the Availability Period in
an aggregate principal amount that will not result in (a) such Lender's
Revolving Credit Exposure exceeding such Lender's Commitment or (b) the sum of
the total Revolving Credit Exposures exceeding the total Commitments. Within the
foregoing limits and subject to the terms and conditions set forth herein, the
Borrowers may borrow, prepay and reborrow Loans.
SECTION 2.02. LOANS. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; PROVIDED that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required. The Loans comprising any Borrowing shall be in an aggregate principal
amount that is an integral multiple of $1,000,000 and not less than $5,000,000
(or an aggregate principal amount equal to the remaining balance of Commitments)
or such lesser amounts as the Administrative Agent may agree. All Loans shall be
made in Dollars.
(b) Subject to Section 2.10, each Loan shall be comprised entirely of
ABR Loans or Eurodollar Loans as the Borrower may request in accordance
herewith. Each Lender at its option may make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
PROVIDED that any exercise of such option shall not affect the obligation of the
applicable Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
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SECTION 2.03. REQUESTS FOR BORROWINGS. To request each Borrowing, the
Borrower shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on
the date of the proposed Borrowing. Each such telephonic Borrowing Request shall
be irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request in a form approved by
the Administrative Agent and signed by the Borrower. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.04.
If no election as to the Type of any Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent designated by it for such purpose by notice to the
Lenders. The Administrative Agent will make such Loans available to the Borrower
by promptly crediting the amounts so received, in like funds, to an account of
the Borrower maintained with the Administrative Agent in New York City and
designated by the Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of any Borrowing,
the Administrative Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section and may,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. In such event, if a
22
Lender has not in fact made its share of the applicable Borrowing available to
the Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.05. REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The
outstanding principal amount of each Loan shall be due and payable on the
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Borrower, the Type and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from each Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder from each Borrower and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations therein recorded; PROVIDED, HOWEVER, that the failure
of any Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligations of the Borrowers to repay
the Loans in accordance with their terms.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note or notes payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns (in
each such case, a "REGISTERED NOTE")) and in a form reasonably approved by the
Administrative Agent. Thereafter, the Loans evidenced by such promissory note
and interest thereon shall at all times (including after assignment pursuant to
Section 10.04) be represented by one or more promissory notes in such form
payable to the order of the payee named therein (or, if such promissory note is
a Registered Note, to such payee and its registered assigns).
SECTION 2.06. INTEREST ELECTIONS. (a) Each Borrowing initially shall
be of the Type specified in the applicable Borrowing Request and, in the case of
a Eurodollar Borrowing, shall have an initial Interest Period as specified in
such Borrowing
23
Request. Thereafter, the Borrower may elect to convert such Borrowing to a
different Type or to continue such Borrowing and, in the case of a Eurodollar
Borrowing, may elect Interest Periods therefor, all as provided in this Section.
The Borrower may elect different options with respect to different portions of
the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the
Loans comprising each such portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different portions
thereof, the portions thereof to be allocated to each resulting Borrowing
(in which case the information to be specified pursuant to clauses (iii)
and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing.
24
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Administrative Agent, at the request of the
Required Lenders, so notifies the Borrower, then, so long as an Event of Default
is continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION 2.07. FEES. (a) The Company agrees to pay to each Lender,
through the Administrative Agent, on each March 31, June 30, September 30 and
December 31 (with the first payment being due on June 30, 2005) and on the date
on which the Commitment of such Lender shall have been terminated, a commitment
fee (a "Commitment Fee"), which shall accrue at the Applicable Rate on the daily
unused amount of the Commitment of such Lender during the preceding quarter (or
other period commencing on the date hereof or ending with the date on which the
Commitment of such Lender shall be terminated). All Commitment Fees shall be
computed on the basis of the actual number of days elapsed in a year of 360
days. The Commitment Fee due to each Lender shall be payable in arrears and
shall commence to accrue on the date hereof and cease to accrue on the date on
which the Commitment of such Lender shall have terminated and such Lender shall
have no further Revolving Credit Exposure.
(b) The Company agrees to pay to the Administrative Agent, for its own
account, the administrative and other fees separately agreed to by the Company
and the Administrative Agent (collectively, the "Administrative Fees").
(c) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders. Once paid, none of the Fees shall be refundable under any
circumstances other than to correct errors in payment.
SECTION 2.08. INTEREST ON LOANS. (a) Subject to the provisions of
Section 2.09, the Loans comprising each Eurodollar Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 360
days) at a rate per annum equal to the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Rate from time to time
in effect.
(b) Subject to the provisions of Section 2.09, the Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, for
periods during which the Alternate Base Rate is determined by reference to the
Prime Rate and 360 days for other periods) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Rate from time to time in effect.
(c) Interest on each Loan shall be payable on each Interest Payment
Date applicable to such Loan except as otherwise provided in this Agreement. The
applicable Adjusted LIBO Rate or Alternate Base Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
25
SECTION 2.09. DEFAULT INTEREST. If any Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, whether by scheduled maturity, notice of prepayment, acceleration
or otherwise, such Borrower shall on demand from time to time from the
Administrative Agent pay interest from and including the date of such default,
to the extent permitted by law, on such defaulted amount up to (but not
including) the date of actual payment (after as well as before judgment) at a
rate per annum (computed as provided in Section 2.08) equal to the higher of (a)
the rate, if any, otherwise applicable to such amount hereunder plus 2% per
annum and (b) the Alternate Base Rate plus the Applicable Rate from time to time
in effect plus 2% per annum.
SECTION 2.10. ALTERNATE RATE OF INTEREST. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined (i) that deposits in Dollars in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market or any other market in which the Lenders shall be funding such Loans,
(ii) that the rates at which such deposits are being offered will not adequately
and fairly reflect the cost to Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period or (iii) that reasonable
means do not exist for ascertaining the LIBO Rate, the Administrative Agent
shall, as soon as practicable thereafter, give telecopy notice of such
determination to the Company and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Company and
the Lenders that the circumstances giving rise to such notice no longer exist,
any affected Borrowing shall bear interest at the Alternate Base Rate. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
SECTION 2.11. TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless
previously terminated, the Commitments shall be automatically and permanently
terminated on the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable telecopy
notice to the Administrative Agent, the Company may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the
Commitments; provided, however, that (i) each partial reduction of the
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $10,000,000 and (ii) no such termination or reduction shall
be made (A) which would reduce the Commitments to an amount less than the sum of
the aggregate Revolving Credit Exposures or (B) which would reduce any Lender's
Commitment to an amount that is less than such Lender's Revolving Credit
Exposure.
(c) Each reduction in the Commitments pursuant to this Section 2.11
shall be made ratably among the Lenders in accordance with their respective
Commitments. The Company shall pay to the Administrative Agent for the account
of the Lenders, on the date of each termination or reduction of the Commitments,
the Commitment Fees on the amount of the Commitments so terminated accrued
through the date of such termination or reduction.
26
SECTION 2.12. MANDATORY OFFER TO REDUCE COMMITMENTS. (a) In the event
and on each occasion that any Net Cash Proceeds are received by or on behalf of
the Company or any Subsidiary in respect of any Asset Sale, other than Net Cash
Proceeds in an aggregate amount not greater than $50,000,000 received during any
fiscal year of the Company, the Company shall promptly notify the Administrative
Agent thereof and shall offer permanently to reduce the Commitments by an
aggregate amount equal to the lesser of (i) 100% of such Net Cash Proceeds and
(ii) the amount by which the aggregate Commitments exceed $200,000,000 (a
"REDUCTION OFFER"); PROVIDED that if the Company shall deliver to the
Administrative Agent a certificate of a Financial Officer to the effect that the
Company intends to apply or cause one or more Subsidiaries to apply such Net
Cash Proceeds (or a portion thereof specified in such certificate), within 365
days after receipt of such Net Cash Proceeds, to acquire real property,
equipment or other tangible assets to be used in the business of the Company and
the Subsidiaries, and certifying that no Default has occurred and is continuing,
then a Reduction Offer shall be required only in the event that any such Net
Proceeds have not been so applied by the 350th day after the receipt of such Net
Cash Proceeds, and the amount by which the Company shall be required to offer to
reduce the Commitments shall be equal to the lesser of (i) the amount of such
Net Cash Proceeds not so applied by the 365th day after receipt of such Net Cash
Proceeds and (ii) the amount by which the aggregate Commitments exceed
$200,000,000 on such 365th day. Notwithstanding the foregoing, no Reduction
Offer shall be required to be made at any time when (i) the Ratings Requirement
shall be satisfied or (ii) the Senior Notes shall no longer be outstanding or
the related indenture shall have been amended in a manner satisfactory to the
Administrative Agent to eliminate any requirement that proceeds of Asset Sales
be applied to redeem any Senior Notes.
(b) Each Reduction Offer shall be made in writing, shall specify the
date on which reductions of the Commitments are to become effective (which date
shall be not sooner than the 10th day and not later than the 15th day after the
date of the Reduction Offer) and shall be delivered to the Administrative Agent,
which shall promptly notify each Lender of the contents thereof. Each Lender
shall, by notice to the Company and the Administrative Agent given not less than
10 days after the date of the Reduction Offer, either accept the offer to reduce
its Commitment by all or a portion of such Lender's Applicable Percentage of the
amount of the Reduction Offer (any Lender so accepting the offer to reduce its
Commitment being called a "REDUCING LENDER") or decline to reduce its Commitment
(and any Lender that does not deliver such a notice within such period of 10
days shall be deemed to have declined to reduce its Commitment). The Commitments
of Lenders that have accepted the Reduction Offer shall be reduced in accordance
with the terms of such Reduction Offer and such acceptances on the effective
date specified in the Reduction Offer.
(c) On the effective date of and after giving effect to any reduction
of Commitments pursuant to this Section, the Borrowers shall prepay the Loans of
the Reducing Lenders in such amounts as shall be necessary in order that each
Lender's outstanding Loans shall be in a principal amount equal to such Lender's
Applicable Percentage of the aggregate principal amount of the outstanding
Loans. Any prepayments made pursuant to this paragraph in respect of Eurodollar
Loans shall be
27
subject to indemnification by the Borrowers pursuant to the provisions of
Section 2.17 if such prepayments occur other than on the last day of the
Interest Period relating thereto and breakage costs result.
SECTION 2.13. INCREASE IN COMMITMENTS. (a) The Company may on one or
more occasions, by written notice to the Administrative Agent (which shall
promptly deliver a copy to each of the Lenders), request that the total
Commitments be increased by an amount not less than $50,000,000; PROVIDED that
the aggregate amount of all increases in the Commitments under this Section
shall not exceed $200,000,000. Each such notice shall set forth the amount of
the requested increase in the total Commitments, and the date on which such
increase is requested to become effective (which shall be not less than 30 days
or more than 60 days after the date of such notice), and shall offer each Lender
the opportunity to increase its Commitment by its Applicable Percentage of the
proposed increased amount. Each Lender shall, by notice to the Company and the
Administrative Agent given not more than 10 Business Days after the date of the
Company's notice, either agree to increase its Commitment by all or a portion of
the offered amount (each Lender so agreeing being an "INCREASING LENDER") or
decline to increase its Commitment (and any Lender that does not deliver such a
notice within such period of 10 Business Days shall be deemed to have declined
to increase its Commitment) (each Lender so declining or deemed to have declined
being a "NON-INCREASING LENDER"). In the event that, on the 10th Business Day
after the Company shall have delivered a notice pursuant to the first sentence
of this paragraph, the Lenders shall have agreed pursuant to the preceding
sentence to increase their Commitments by an aggregate amount less than the
increase in the total Commitments requested by the Company, the Company may
arrange for one or more Persons(any such Person being called an "AUGMENTING
LENDER"), which may include any Lender, to extend Commitments, or increase their
existing Commitments, as the case may be, in an aggregate amount equal to the
unsubscribed amount; PROVIDED that each Augmenting Lender, if not already a
Lender hereunder or an Affiliate of such a Lender or an Approved Fund, shall be
subject to the approval of the Administrative Agent (which approval shall not be
unreasonably withheld) and the Borrowers and each Augmenting Lender shall
execute all such documentation as the Administrative Agent shall reasonably
specify to evidence the Commitment of such Augmenting Lender and/or its status
as a Lender hereunder. Any increase in the total Commitments may be made in an
amount which is less than the increase requested by the Company if the Company
is unable to arrange for, or chooses not to arrange for, Augmenting Lenders.
(b) On the effective date (the "INCREASE EFFECTIVE DATE") of any
increase in the total Commitments pursuant to this Section (the "COMMITMENT
INCREASE"), (i) the aggregate principal amount of the Loans outstanding (the
"INITIAL LOANS") immediately prior to giving effect to the Commitment Increase
on the Increase Effective Date shall be deemed to be paid, (ii) each Increasing
Lender and each Augmenting Lender that shall have been a Lender prior to the
Commitment Increase shall pay to the Administrative Agent in same day funds an
amount equal to the difference between (A) the product of (1) such Lender's
Applicable Percentage
28
(calculated after giving effect to the Commitment Increase), multiplied by (2)
the amount of the Subsequent Borrowings (as hereinafter defined) and (B) the
product of (1) such Lender's Applicable Percentage (calculated without giving
effect to the Commitment Increase), multiplied by (2) the amount of the Initial
Loans, (iii) each Augmenting Lender that shall not have been a Lender prior to
the Commitment Increase shall pay to the Administrative Agent in same day funds
an amount equal to the product of (1) such Augmenting Lender's Applicable
Percentage (calculated after giving effect to the Commitment Increase)
multiplied by (2) the amount of the Subsequent Borrowings, and (iv) after the
Administrative Agent receives the funds specified in clauses (ii) and (iii)
above, the Administrative Agent shall pay to each Non-Increasing Lender the
portion of such funds that is equal to the excess of (A) the product of (1) such
Non-Increasing Lender's Applicable Percentage (calculated without giving effect
to the Commitment Increase) multiplied by (2) the amount of the Initial Loans,
over (B) the product of (1) such Non-Increasing Lender's Applicable Percentage
(calculated after giving effect to the Commitment Increase) multiplied by (2)
the amount of the Subsequent Borrowings, (v) after the effectiveness of the
Commitment Increase, the applicable Borrowers shall be deemed to have made new
Borrowings (the "SUBSEQUENT BORROWINGS") in an aggregate principal amount equal
to the aggregate principal amount of the Initial Loans and of the types and for
the Interest Periods specified in a Borrowing Request delivered to the
Administrative Agent in accordance with Section 2.03, (vi) each Non-Increasing
Lender, each Increasing Lender and each Augmenting Lender shall be deemed to
hold its Applicable Percentage of each Subsequent Borrowing (each calculated
after giving effect to the Commitment Increase) and (vii) the applicable
Borrowers shall pay each Increasing Lender and each Non-Increasing Lender any
and all accrued but unpaid interest on the Initial Loans. The deemed payments
made pursuant to clause (i) above in respect of each Eurodollar Loan shall be
subject to indemnification by the Borrowers pursuant to the provisions of
Section 2.17 if the Increase Effective Date occurs other than on the last day of
the Interest Period relating thereto and breakage costs result.
(c) Increases and new Commitments pursuant to this Section shall
become effective on the date specified in the notice delivered by the Company
pursuant to the first sentence of paragraph (a) above.
(d) Notwithstanding the foregoing, no increase in total Commitments
(or in any Commitment of any Lender) or addition of an Augmenting Lender shall
become effective under this Section unless, (i) on the date of such increase,
the conditions set forth in paragraphs (b) and (c) of Section 3.02 shall be
satisfied and the Administrative Agent shall have received a certificate to that
effect dated such date and executed by the chief financial officer of the
Company, and (ii) the Administrative Agent shall have received (with sufficient
copies for each of the Lenders) documents consistent with those delivered on the
Effective Date under clauses (f) and (h) of Section 3.01 as to the corporate
power and authority of the applicable Borrowers to borrow hereunder after giving
effect to such increase.
SECTION 2.14. PREPAYMENT. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, subject to prior notice in
accordance with paragraph (b) of this Section, in whole or in part, without
premium or penalty (but including amounts owed under Section 2.17).
29
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.11 or Section 2.12, the Borrowers shall pay or prepay so
much of the Borrowings as shall be necessary in order that the aggregate
Revolving Credit Exposures will not exceed total Commitments, after giving
effect to such termination or reduction.
(c) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 10:00 a.m., New York City time,
one Business Day before the date of prepayment (or such shorter time as the
Administrative Agent may agree). Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Borrowing or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that is at least $10,000,000 (or, if smaller, the amount of such
Borrowing), or such lesser amount as the Administrative Agent may agree, and an
integral multiple of $1,000,000 (or, if smaller, the amount of such Borrowing),
or such lesser amount as the Administrative Agent may agree, except as necessary
to fully apply the required amount of a mandatory prepayment. Each prepayment of
a Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.08. All prepayments under this Section 2.14 shall be
subject to Section 2.17 but otherwise without premium or penalty.
SECTION 2.15. RESERVE REQUIREMENTS; CHANGE IN CIRCUMSTANCES. (a)
Notwithstanding any other provision herein but subject to paragraph (d) below
and to Section 2.22, if any Change in Law shall result in the imposition,
modification or applicability of any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender, or shall result in the imposition on any Lender or the
London interbank market or any other market in which the funding operations of
any Lender shall be conducted of any other condition, in any such case,
affecting this Agreement, such Lender's Commitment or any Eurodollar Loan made
by such Lender, and the result of any of the foregoing shall be to increase the
cost to such Lender of making or maintaining any Eurodollar Loan or to reduce
the amount of any sum received or receivable by such Lender hereunder (whether
of principal, interest or otherwise) by an amount deemed by such Lender to be
material, then the Company and the applicable Borrower agree to pay such
additional amount or amounts as will compensate such Lender for such additional
costs or reduction.
(b) If any Lender shall have determined that any Change in Law regarding
capital adequacy has or would have the effect of reducing the rate of return on
such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement, such Lender's Commitment or the Loans
made by such Lender pursuant hereto to a level below that which such Lender or
30
such Lender's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy) by an amount deemed
by such Lender to be material, then the Company and the applicable Borrower
agree to pay to such Lender from time to time such additional amount or amounts
as will compensate such Lender for such reduction.
(c) A certificate of each Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above, as the case may be, and setting forth
in reasonable detail the manner in which such amount or amounts shall have been
determined, shall be delivered to the Company with a copy to the Administrative
Agent and shall be conclusive absent manifest error. The Company or the
applicable Borrower, as the case may be, shall pay each Lender the amount shown
as due on any such certificate delivered by it within 10 Business Days after its
receipt of the same.
(d) Failure or delay on the part of any Lender to demand compensation
for any increased costs or reduction in amounts received or receivable or
reduction in return on capital shall not constitute a waiver of such Lender's
right to demand such compensation with respect to such period or any other
period, except that no Lender shall be entitled to any compensation under this
Section 2.15 for any costs incurred or reduction suffered with respect to any
date unless such Lender shall have notified the Company that it will demand
compensation for such costs or reductions under paragraph (c) above not more
than 60 days after the later of (i) such date and (ii) the date on which such
Lender shall have become aware of such costs or reductions. The protection of
this Section shall be available to each Lender regardless of any possible
contention of the invalidity or inapplicability of any law, rule, regulation or
guideline or any Change in Law. Notwithstanding any other provision in this
Section 2.15, no Lender shall demand compensation for any increased cost or
reduction referred to above if it shall not at the time be the general policy or
practice of such Lender to demand such compensation in similar circumstances
under comparable provisions of other credit agreements, if any. If any Lender
shall receive as a refund any moneys from any source in respect of any increased
cost or reduction that it has identified on any certificate provided pursuant to
paragraph (c) above, to the extent that the Company or any Borrower has
previously paid the Lender any compensation in respect thereof, the Lender shall
promptly forward such refund to the Company or such Borrower, as the case may
be, without interest.
SECTION 2.16. CHANGE IN LEGALITY. (a) Notwithstanding any other
provision herein, if any Change in Law shall make it unlawful for any Lender or
its applicable lending office to make or maintain any Eurodollar Loan or to give
effect to its obligations as contemplated hereby with respect to any Eurodollar
Loan, then, such Lender shall give written notice thereof to the Company and to
the Administrative Agent and as long as such illegality, limitation or
impracticality continues to exist, such Lender:
(i) may declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, and any request by any Borrower for Eurodollar Loans
shall, as to such Lender only, be deemed a request for an ABR Loan unless
such declaration shall be subsequently withdrawn; and
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(ii) shall promptly enter into negotiations with the Company and
negotiate in good faith to agree to a solution to such illegality,
limitation or impracticability; PROVIDED, HOWEVER, that if such an
agreement has not been reached by the date at which the applicable notice
becomes effective as provided in paragraph (b) below, the affected
Eurodollar Loans shall be automatically converted on such date into ABR
Loans.
(b) For purposes of this Section 2.16, a notice by any Lender shall be
effective as to each Eurodollar Loan, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt.
(c) Each Lender that has delivered a notice pursuant to paragraph (a)
above, if the circumstances giving rise to such notice cease to exist, shall
notify each applicable Borrower thereof as soon as practicable.
SECTION 2.17. INDEMNITY. Each Borrower agrees to indemnify each Lender
making any Loan to it against any loss or expense which such Lender may sustain
or incur as a consequence of (a) any failure by any Borrower to borrow or to
refinance, convert or continue any Loan hereunder after irrevocable notice of
such borrowing, refinancing, conversion or continuation has been given pursuant
to Section 2.03, (b) any payment, prepayment or conversion of a Loan to such
Borrower required by any other provision of this Agreement or otherwise made or
deemed made, or any purchase required pursuant to the provisions of Section
2.22(b) (except pursuant to Sections 2.22(b)(iii) or (iv)), on a date other
than the last day of the Interest Period, if any, applicable thereto or (c) any
default by such Borrower in payment or prepayment of the principal amount of any
Loan or any part thereof or interest accrued thereon, as and when due and
payable (at the due date thereof, whether by scheduled maturity, acceleration,
irrevocable notice of prepayment or otherwise), including, in each such case,
any loss or reasonable expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties acquired to
effect or maintain such Loan or any part thereof. Such loss or reasonable
expense shall include an amount equal to the excess, if any, as reasonably
determined by such Lender, of (i) its cost of obtaining the funds for the Loan
being paid, prepaid, refinanced or not borrowed (which in the case of a
Eurodollar Loan will be assumed to be the LIBO Rate applicable thereto) for the
period from the date of such payment, prepayment, refinancing or failure to
borrow or refinance to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow or refinance the Interest Period for such Loan
which would have commenced on the date of such failure) over (ii) the amount of
interest (as reasonably determined by such Lender) that would be realized by
such Lender in reemploying the funds so paid, prepaid or not borrowed or
refinanced for such period or Interest Period, as the case may be. A certificate
of any Lender setting forth any amount or amounts which such Lender is entitled
to receive pursuant to this Section and setting forth in reasonable detail the
manner in which such
32
amount or amounts shall have been determined shall be delivered to such Borrower
with a copy to the Administrative Agent and shall be conclusive absent manifest
error.
SECTION 2.18. PRO RATA TREATMENT. Each Borrowing, each payment of the
Commitment Fees and each reduction of the Commitments shall be allocated pro
rata among the Lenders in accordance with their respective Commitments. Each
continuation, payment or prepayment of principal of any Borrowing and each
refinancing or conversion of any Borrowing shall be allocated pro rata among the
Lenders participating in such Borrowing in accordance with the respective
principal amounts of their outstanding Loans comprising such Borrowing. Each
payment of interest on any Borrowing shall be allocated pro rata among the
Lenders participating in such Borrowing in accordance with the respective
amounts of accrued and unpaid interest on their outstanding Loans comprising
such Borrowing. Each Lender agrees that in computing such Lender's portion of
any Borrowing to be made hereunder, the Administrative Agent may, in its
discretion, round each Lender's percentage of such Borrowing to the next higher
or lower whole unit amount.
SECTION 2.19. SHARING OF SETOFFS. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means (other than as provided in
Section 2.16 or pursuant to an assignment under Section 2.22 or Section 10.04),
obtain payment (voluntary or involuntary) in respect of any Loan or Loans as a
result of which the unpaid principal portion of its Loans shall be
proportionately less than the unpaid principal portion of the Loans of any other
Lender, it shall be deemed simultaneously to have purchased from such other
Lender at face value, and shall promptly pay to such other Lender the purchase
price for, a participation in the Loans of such other Lender, so that the
aggregate unpaid principal amount of the Loans and participations in the Loans
held by each Lender shall be in the same proportion to the aggregate unpaid
principal amount of all Loans then outstanding as the principal amount of its
Loans prior to such exercise of banker's lien, setoff or counterclaim or other
event was to the principal amount of all Loans outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; PROVIDED,
HOWEVER, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.19 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest. Any Lender holding a participation in a
Loan deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all moneys owing
to such Lender by reason thereof as fully as if such Lender had made a Loan in
the amount of such participation.
SECTION 2.20. PAYMENTS. (a) Each Borrower shall make each payment
(including the principal of or interest on any Borrowing made by it or any Fees
or other amounts payable by it) hereunder from a Payment Location in the United
States not later than 12:00 noon, New York City time, on the date when due in
Dollars to the
33
Administrative Agent at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, in
immediately available funds without set-off, counterclaim or deduction of any
kind. The Administrative Agent shall distribute any such payments received by it
for the account of any other Person to the appropriate recipient promptly
following receipt thereof.
(b) Whenever any payment (including the principal of or interest on
any Borrowing or any Fees or other amount) hereunder shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.21. TAXES. (a) Any and all payments by or on account of any
obligation of the Borrowers hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; PROVIDED that if any Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as determined in good faith by the Administrative Agent or the
applicable Lender to be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) such
Borrower shall make such deductions and (iii) such Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent and each
Lender within 20 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrowers hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Company by a Lender, or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by a Borrower to a Governmental Authority, the Company shall deliver
to the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
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(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which a
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Company (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable
law or reasonably requested by the Company as will permit such payments to be
made without withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by a Borrower or with respect to which a Borrower
has paid additional amounts pursuant to this Section 2.21, it shall pay over
such refund to the Company (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrowers under this Section 2.21 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); PROVIDED, that the Borrowers, upon the request of
the Administrative Agent or such Lender, agree to repay the amount paid over to
such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
any Borrower or any other Person.
SECTION 2.22. DUTY TO MITIGATE; ASSIGNMENT OF RIGHTS UNDER CERTAIN
CIRCUMSTANCES. (a) Any Lender claiming any additional amounts payable pursuant
to Section 2.15, or 2.21, or exercising its rights under Section 2.16, shall use
reasonable efforts (consistent with legal and regulatory restrictions) to file
any certificate or document requested by the Company or to change the
jurisdiction of its applicable lending office or to take such other actions as
may reasonably be requested by the Company if the making of such a filing or
change would avoid the need for or reduce the amount of any such additional
amounts which may thereafter accrue or avoid the circumstances giving rise to
such exercise and would not, in the reasonable determination of such Lender, be
otherwise disadvantageous to such Lender.
(b) In the event that (i) any Lender shall have delivered a notice or
certificate pursuant to Section 2.15 or 2.16, (ii) any Borrower shall be
required or reasonably believes it will be required, to make additional payments
to any Lender under Section 2.21, (iii) any Lender shall become, or a
substantial part of the property of any Lender shall become, the subject of any
receivership or similar proceeding or (iv) any Lender shall default on its
commitment to lend hereunder, the Company shall have the right, at its own
expense, upon notice to such Lender and the Administrative Agent, to require
such Lender to transfer and assign without recourse, free and clear of all
deductions and withholding (in accordance with, upon the terms of and subject to
the restrictions contained in Section 10.04), all interests, rights and
obligations contained
35
hereunder to another financial institution or to another Lender which shall
assume such obligations; PROVIDED that (A) no such assignment shall conflict
with any law, rule or regulation or order of any Governmental Authority and (B)
the assignee or the Company, as the case may be, shall pay to the affected
Lender in immediately available funds on the date of such assignment the
principal of and the interest accrued to the date of payment on the Loans made
by it hereunder and all other amounts accrued for its account or owed to it
hereunder.
ARTICLE III
CONDITIONS
SECTION 3.01. EFFECTIVENESS. The obligations of the Lenders under this
Agreement shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 10.02):
(a) The Administrative Agent shall have received counterparts hereof
signed by each of the parties hereto.
(b) The representations and warranties set forth in Article IV shall
be true and correct in all material respects on the Effective Date.
(c) The Borrowers shall be in compliance with all the terms and
provisions set forth herein on their part to be observed or performed, and
at the time of and immediately after the Effective Date, no Event of
Default or Default shall have occurred and be continuing.
(d) The Collateral Requirement shall be satisfied.
(e) The Agents shall have received a certificate, signed by a
Financial Officer of the Company, confirming the satisfaction of the
conditions set forth in paragraphs (b) and (c) above on and as of the
Effective Date, after giving effect to the Transactions occurring on or
prior to such date.
(f) The Agents shall have received written opinions of (i) Xxxxxxxx X.
X. XxXxxx, Associate General Counsel of the Company; (ii) Wachtell, Lipton,
Xxxxx & Xxxx, counsel to the Borrowers; (iii) opinions of foreign counsel
in Germany and the United Kingdom, each addressing such matters relating to
the pledge of Equity Interests of Subsidiaries organized in the applicable
jurisdiction as the Agents shall reasonably have requested and in form and
substance reasonably acceptable to the Agents.
(g) The Agents shall have received a completed Perfection Certificate
dated the Effective Date and signed by a Financial Officer of the Company,
together with all attachments contemplated thereby, including the results
of a search of the UCC (or equivalent) filings made with respect to the
Loan Parties in the jurisdictions contemplated by the Perfection
Certificate and copies of the
36
financing statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Administrative Agent that the Liens
indicated by such financing statements (or similar documents) are permitted
by Section 6.02 or have been released.
(h) The Agents shall have received, on behalf of the Lenders (i) a
copy of the certificate or articles of incorporation or other
organizational documents, including all amendments thereto, of each of the
Loan Parties, certified as of a recent date by the Secretary of State (or
other appropriate governmental authority) of the state of its organization;
(ii) a certificate as to the good standing or subsistence, to the extent
available, of each of the Loan Parties as of a recent date, from the
appropriate Secretary of State (or other appropriate governmental
authority) or other evidence reasonably satisfactory to the Agents as to
the good standing of such Loan Party; (iii) a certificate of the Secretary
or Assistant Secretary of each Loan Party dated the Effective Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws or other organizational documents of such Loan Party as in effect
on the Effective Date and at all times since a date prior to the date of
the resolutions described in clause (B) below, (B) that attached thereto is
a true and complete copy of resolutions duly adopted by the Board of
Directors (or other analogous governing body) and, where applicable, the
Executive Committee of such Board of Directors) of such Loan Party (and, if
necessary, resolutions duly adopted by the shareholders or other equity
owners of such Loan Party) authorizing the execution, delivery and
performance of the Loan Documents to which such Loan Party is or is to be a
party and the Transactions, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C) that
the certificate or articles of incorporation or other organizational
documents of such Loan Party have not been amended since the date of the
last amendment thereto shown on the certificate furnished pursuant to
clause (i) above, and (D) as to the incumbency and specimen signature of
each officer executing any Loan Document or any other document delivered in
connection herewith on behalf of such Loan Party; (iv) a certificate of
another officer as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to
clause (iii) above; and (v) such other documents as the Lenders or Cravath,
Swaine & Xxxxx LLP, counsel for the Agents, may reasonably request related
to the foregoing.
(i) The commitments of the lenders under the Existing Term Loan
Agreement and the Existing Five-Year Credit Agreement shall have been
terminated and the principal of and interest accrued on the loans
outstanding thereunder, all fees and other amounts accrued or otherwise due
thereunder, shall have been paid in full and all Commitments thereunder
shall have been cancelled.
(j) All fees and other amounts due and payable hereunder on or prior
to the Effective Date, including, to the extent invoiced, all out-of-pocket
expenses required to be reimbursed or paid by any Borrower hereunder, shall
have been paid.
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SECTION 3.02. BORROWINGS. The obligation of each Lender to make a Loan
on the occasion of any Borrowing hereunder, is subject to the satisfaction of
the following conditions:
(a) The Administrative Agent shall have received a notice of borrowing
as required by Section 2.03.
(b) Immediately prior to and after such Borrowing, no Default shall
have occurred and be continuing.
(c) The representations and warranties of the Company and the
applicable Borrower contained in Article IV of this Agreement shall be true
in all material respects on and as of the date of such Borrowing; provided
that, notwithstanding the foregoing, the representations and warranties
contained in Sections 4.04(b) and 4.06(a) hereof shall not be required to
be true on the date of a Borrowing if (i) the Ratings Requirement shall be
satisfied on the date of such Borrowing and (ii) the proceeds of such
Borrowing will be used to repay commercial paper maturing on such date.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Company and the applicable Borrower on the date of such Borrowing as to the
matters specified in clauses (b) and (c) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company, as to itself and each of its Subsidiaries, represents
and warrants to the Agents and each of the Lenders, as of the Effective Date, as
follows:
SECTION 4.01. ORGANIZATION; POWERS. Each of the Company and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization (except, in the case of
Subsidiaries that are not Material Subsidiaries, where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect), has all requisite power and authority to carry on
its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 4.02. AUTHORIZATION; ENFORCEABILITY. Except as set forth in
Schedule 4.02, the Transactions are within the corporate powers of each Borrower
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by the
Company and each Borrowing Subsidiary and constitutes (assuming due execution by
the Lenders and the Agents), and each other Loan Document to which any Loan
Party is a party, when executed and delivered by such Loan Party, will
constitute (assuming due execution by
38
the Lenders and the Agents), a legal, valid and binding obligation of such Loan
Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION 4.03. GOVERNMENTAL APPROVALS; NO CONFLICTS. Except as set
forth in Schedule 4.03, the Transactions (a) do not require any consent or
approval of, registration or filing with or other action by any Governmental
Authority, (b) will not violate any applicable material law or regulation or the
charter, by-laws or other organizational documents of the Company or any of its
Material Subsidiaries or any order of any Governmental Authority, (c) will not
violate or result in a default under any indenture or other material agreement
or instrument binding upon the Company or any of its Material Subsidiaries or
any assets of any of them, or give rise to a right thereunder to require any
payment to be made by the Company or any of its Material Subsidiaries, and (d)
will not result in the creation or imposition of any Lien (other than the Liens
created by the Security Documents) on any asset of the Company or any of its
Material Subsidiaries.
SECTION 4.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a) The
Company has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended June 30, 2004, reported on by KPMG LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended December 31, 2004, certified by its chief financial officer.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Company and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP.
(b) Since June 30, 2004, there has been no change that would
constitute a material adverse change in the business, assets, results of
operations or financial condition of the Company and its Subsidiaries taken as a
whole.
SECTION 4.05. PROPERTIES. (a) Each of the Company and its Subsidiaries
has good title to all its real and personal property purportedly owned by it and
material to its business, except for defects or lack of title that could not
reasonably be expected to result in a Material Adverse Effect.
(b) Each of the Company and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, except where lack of ownership or of any
license could not reasonably be expected to result in a Material Adverse Effect,
and the use thereof by the Company and its Subsidiaries does not infringe upon
the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
39
SECTION 4.06. LITIGATION AND ENVIRONMENTAL MATTERS. (a) Except for the
Disclosed Matters, there are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Company, threatened against or affecting the Company or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination
and that, if adversely determined, could reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect or (ii) that assert the
invalidity or unenforceability of or otherwise challenge this Agreement or the
Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, neither the Company nor any of its
Subsidiaries (i) is in material violation of any Environmental Law or has failed
to obtain, maintain or comply with any material permit, license or other
approval required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received written notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis reasonably
likely to result in any Environmental Liability.
SECTION 4.07. COMPLIANCE WITH LAWS AND AGREEMENTS. Neither the Company
nor any of its Subsidiaries is in violation of any law, regulation or order of
any Governmental Authority applicable to it or its property or any indenture,
agreement or other instrument binding upon it or its property, where such
violation, individually or in the aggregate with other violations, could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.08. NOT AN INVESTMENT COMPANY OR HOLDING COMPANY. Neither
the Company nor any of its Subsidiaries is (a) an "investment company" as
defined in, or subject to regulation under, the Investment Company Act of 1940
or (b) a "holding company" as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935.
SECTION 4.09. TAXES. Each of the Company and its Subsidiaries has
timely filed or caused to be timely filed all returns and reports required to
have been filed and has paid or caused to be paid all Taxes required to have
been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Company or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 4.11. DISCLOSURE. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Company to
the Administrative Agent or any Lender in connection with the negotiation of
this Agreement
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or delivered hereunder (as modified or supplemented by other information so
furnished), taken as a whole, contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
PROVIDED that, with respect to projected financial information, the Company
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time made.
SECTION 4.12. FEDERAL RESERVE REGULATIONS. (a) Neither the Company nor
any of the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of buying or
carrying margin stock (as defined in Regulation U).
(b) No part of the proceeds of any Loan will be used, whether directly
or indirectly, and whether immediately, incidentally or ultimately, for any
purpose that entails a violation of the provisions of the Regulations of the
Board, including Regulation U or X. Not more than 25% of the assets of the
Company or the Company and the Subsidiaries taken as a whole that are subject to
the restrictions of Sections 6.02 and 6.04 will at any time constitute margin
stock.
SECTION 4.13. SUBSIDIARIES. At the Effective Date, except as set forth
in Schedule 4.13, all the issued and outstanding Equity Interests of each of the
Subsidiaries have been validly issued and are fully paid and nonassessable and
are owned directly or indirectly by it free and clear of all Liens (other than
Liens permitted under Section 6.02), and there are no options, warrants, calls,
conversions or exchange rights, commitments or agreements of any character
obligating any of the Subsidiaries to issue, deliver or sell additional shares
of capital stock of any class or any securities convertible into or exchangeable
for any such capital stock or any additional partnership or other Equity
Interests. Schedule 4.13 sets forth the name of, and the ownership interest of
the Company in, each Subsidiary of the Company, in each case as of the Effective
Date.
SECTION 4.14. SECURITY DOCUMENTS. Subject to the provisions of Section
10.14, the Pledge Agreement creates in favor of the Collateral Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable security
interest in the Collateral (as defined in the Pledge Agreement) securing the
Obligations, subject to Liens permitted under Section 6.02, and constitutes a
fully perfected Lien on all right, title and interest of the Loan Parties in the
Collateral prior and superior to the rights of any other Person, subject only to
Liens permitted under Section 6.02.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Company covenants and agrees with the Lenders that:
41
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION. The Company
will furnish to the Agents and each Lender:
(a) within 15 days of each date the Company is required to file a
report on Form 10-K for any fiscal year with the Securities Exchange
Commission (without giving effect to any extension of such due date), its
audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by KPMG LLP or other independent public
accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 15 days of each date the Company is required to file a
report on Form 10-Q for any fiscal quarter with the Securities Exchange
Commission (without giving effect to any extension of such due date), its
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for the corresponding period of
the previous fiscal year, or such other financial statements required to be
included in Securities and Exchange Commission Form 10-Q, all certified by
one of its Financial Officers as presenting fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Company (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth
calculations demonstrating that the Company is in compliance with Sections
6.08 and 6.09 and (iii) if any change in GAAP has occurred since the last
date of delivery of financial statements and has had a material effect on
the financial statements of the Company, specifying such effect, unless
such effect is noted in such financial statements;
(d) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Company or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, or distributed
by the Company to its shareholders generally, as the case may be; and
42
(e) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Company or any Subsidiary, or compliance with the terms of this Agreement,
as the Administrative Agent or any Lender may reasonably request.
Information required to be delivered pursuant to the clauses above shall be
deemed to have been delivered if such information, or one or more annual or
quarterly reports containing such information, shall have been posted on the
Company's website on the Internet at xxx.xx.xxx (or such other address as the
Company shall provide to the Lenders) or by the Administrative Agent on an
IntraLinks or similar site to which the Lenders have been granted access or
shall be available on the website of the Securities and Exchange Commission at
xxxx://xxx.xxx.xxx (and a confirming electronic correspondence shall have been
delivered or caused to be delivered to the Administrative Agent and each Lender
providing notice of such posting or availability); PROVIDED that the Borrower
shall deliver paper copies of such information to the Administrative Agent for
any Lender that requests such delivery through the Administrative Agent.
Information required to be delivered pursuant to this Section 5.01 may also be
delivered by electronic communications pursuant to procedures approved by the
Administrative Agent.
SECTION 5.02. NOTICES OF MATERIAL EVENTS. Upon becoming aware of any
of the following, the Company will furnish to the Agents and each Lender prompt
written notice thereof:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Company or any Affiliate thereof that could reasonably be expected to
result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event or event that would be an ERISA
Event if the Administrative Agent or the Required Lenders made the
determination referred to in the definition of ERISA Event, in each case,
that, alone or together with any other ERISA Events that have occurred,
could reasonably be expected to result in liability of the Company and its
Subsidiaries in an aggregate amount exceeding $5,000,000; and
(d) any other development that results in, or, in the judgment of the
Company, could reasonably be expected to result in, a Material Adverse
Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. EXISTENCE; CONDUCT OF BUSINESS. The Company will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights,
43
licenses, permits, privileges, patents, copyrights, trademarks, tradenames and
franchises material to the conduct of its business except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect;
PROVIDED that the foregoing shall not prohibit any merger, consolidation,
liquidation, dissolution, sale, transfer, lease or other disposition permitted
under Section 6.04.
SECTION 5.04. PAYMENT OF OBLIGATIONS. The Company will, and will cause
each of its Subsidiaries to, pay its Debt (and other obligations, including Tax
liabilities) before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings and the Company or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP or (b) the
failure to make payment could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. MAINTENANCE OF PROPERTIES; INSURANCE. The Company will,
and will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect and (b) maintain, with
financially sound and reputable insurance companies, insurance in such amounts
and against such risks as are customarily maintained by similar companies
engaged in the same or similar businesses operating in the same or similar
locations; PROVIDED that the Company and its Subsidiaries may (i) self-insure
against such risks and in such amounts as are usually self-insured by similar
companies engaged in the same or similar businesses operating in the same or
similar locations and (ii) elect not to carry publisher's liability insurance or
terrorism insurance.
SECTION 5.06. BOOKS AND RECORDS; INSPECTION RIGHTS. The Company will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in which true and correct entries are made of all material dealings and
transactions in relation to its business and activities. The Company will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times during normal business
hours as reasonably requested.
SECTION 5.07. COMPLIANCE WITH LAWS. The Company will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.08. USE OF PROCEEDS. The proceeds of the Loans will be used
to repay amounts outstanding under the Existing Term Loan Agreement and the
Existing Five-Year Credit Agreement, and for general corporate purposes. No part
of the
44
proceeds of any Loan will be used, whether directly or indirectly, for
any purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X.
SECTION 5.09. INFORMATION REGARDING COLLATERAL. The Company will
furnish to the Administrative Agent and to Cravath, Swaine & Xxxxx LLP, Attn:
Xxxxx X. Xxxxxx or such other Person as the Administrative Agent shall specify,
prompt written notice of any change (i) in any Loan Party's corporate name, (ii)
in any Loan Party's jurisdiction of organization, (iii) in any Loan Party's
identity or corporate structure, (iv) in any Loan Party's Federal Taxpayer
Identification Number or organizational identification number and (v) in the
ownership of any Equity Interests pledged under the Pledge Agreement. The
Company agrees not to effect or permit any change referred to in the preceding
sentence until the Company has notified the Collateral Agent in writing of such
change, and that prior to or promptly after any such change the Company will
take all such actions as may be required in order that the Collateral Agent
shall continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral.
SECTION 5.10. FURTHER ASSURANCES. The Company will, and will cause
each Loan Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all further reasonable actions (including
the filing and recording of financing statements and other documents), that may
be required under any applicable law, or that the Collateral Agent or the
Required Lenders may reasonably request, to cause the Collateral Requirement to
be and remain satisfied, all at the expense of the Loan Parties. The Company
agrees to give the Collateral Agent prompt written notice of the formation or
acquisition of any Subsidiary the Equity Interests of which are required to be
pledged pursuant to the Collateral Requirement. The Company also agrees to
provide to the Collateral Agent, from time to time upon request, evidence
reasonably satisfactory to the Collateral Agent as to the perfection and
priority of the Liens created or intended to be created by the Pledge Agreement.
SECTION 5.11. COMPLIANCE WITH FEDERAL RESERVE REGULATIONS. The Company
and its Subsidiaries will comply with all rules, regulations and restrictions of
the Regulations of the Board, including Regulation U and X.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full,
the Company covenants and agrees with the Lenders that:
SECTION 6.01. DEBT AND PREFERRED STOCK OF SUBSIDIARIES. (a) The
Company will not permit any Subsidiary to create, incur, assume or permit to
exist any Debt, except:
(i) Debt outstanding on the Effective Date and set forth on Schedule
6.01;
45
(ii) Debt created under the Loan Documents;
(iii) Debt of any Subsidiary to the Company or any other Subsidiary
that in either case shall not have been transferred or pledged to any third
party;
(iv) Debt of any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including
Capital Lease Obligations, and any Debt assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements
of any such Debt that do not increase the outstanding principal amount
thereof; PROVIDED that (A) such Debt is incurred prior to or within 180
days after such acquisition or the completion of such construction or
improvement and (B) the aggregate principal amount of Debt permitted by
this clause (iv) shall not exceed $50,000,000 at any time outstanding;
(v) Debt of any Person that shall have become a Subsidiary after the
Effective Date; PROVIDED that such Debt shall have existed at the time such
Person becomes a Subsidiary and shall not have been created in
contemplation of or in connection with such Person becoming a Subsidiary;
(vi) Debt refinancing or replacing any of the Debt referred to in the
preceding clauses (i) through (v); provided that (A) the principal amount
of such refinancing or replacement Debt shall not exceed that of the Debt
refinanced or replaced, (B) the maturity and weighted average life to
maturity of such refinancing or replacement Debt shall not be less than the
remaining maturity and weighted average life to maturity of the Debt
refinanced or replaced and (C) the obligors on such refinancing or
replacement Debt shall not include Subsidiaries that were not obligors in
respect of the Debt refinanced or replaced;
(vii) Debt of any Subsidiary as an account party in respect of trade
letters of credit employed in the ordinary course of business; and
(viii) other Debt that, when aggregated with the aggregate outstanding
Debt of the Company secured by Liens permitted pursuant to Section 6.02(n)
and the aggregate sale price of the assets sold in sale and leaseback
transactions permitted pursuant to Section 6.03, shall at no time exceed
10.0% of Consolidated Assets.
(b) The Company will not permit any Subsidiary to issue any preferred
stock or other preferred Equity Interest, other than any preferred stock or
other preferred Equity Interest held by the Company or another Subsidiary.
SECTION 6.02. LIENS. The Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
46
(b) any Lien on any property or asset of the Company or any Subsidiary
existing on the Effective Date and set forth in Schedule 6.02; PROVIDED
that (i) such Lien shall not apply to any other property or asset of the
Company or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals
and replacements thereof that do not increase the outstanding principal
amount thereof as of the date hereof;
(c) any Lien existing on any property or asset prior to the
acquisition thereof by the Company or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary; PROVIDED that
(i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii)
such Lien shall not apply to any other property or assets of the Company or
any Subsidiary and (iii) such Lien shall secure only those obligations
which it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof as of such date;
(d) any Lien on fixed or capital assets acquired, constructed or
improved by the Company or any Subsidiary, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof; PROVIDED that (i) such Lien and the Debt secured thereby are
incurred prior to or within 180 days after such acquisition or the
completion of such construction or improvement, (ii) the Debt secured
thereby does not exceed the cost of acquiring, constructing or improving
such fixed or capital assets and (iii) such Lien shall not apply to any
other property or assets of the Company or any Subsidiary;
(e) any Lien on the property or assets of any Subsidiary of the
Company in favor of the Company or any wholly owned Subsidiary;
(f) any Lien on equipment (including printing presses and
data-processing equipment) owned by the Company or any Subsidiary and
located on the premises of any supplier and used in the ordinary course of
the Company's or such Subsidiary's business;
(g) any judgment or judicial attachment Lien with respect to any
judgment that does not constitute an Event of Default;
(h) any Lien securing any reimbursement, indemnification or similar
obligation or liability incurred in connection with any letter of credit,
letter of guaranty, banker's acceptance, xxxx of exchange or similar
instrument to backstop trade obligations (but not Debt) of the Company or a
Subsidiary;
(i) any Lien imposed by law where (x) the validity or amount thereof
is being contested in good faith by appropriate proceedings and the Company
or any Subsidiary has set aside on its books adequate reserves with respect
thereto in
47
accordance with GAAP or (y) the failure to remove such Lien could not
reasonably be expected to result in a Material Adverse Effect;
(j) any Lien deemed to exist by virtue of any Capital Lease Obligation
not otherwise prohibited hereunder;
(k) any Lien arising under any Loan Document;
(l) any Lien on assets of a Subsidiary that is not a Material
Subsidiary securing obligations that do not constitute Debt;
(m) other Liens arising in the ordinary course of business that do not
secure Debt and do not interfere with the material operations of the
Company and the Subsidiaries and do not individually or in the aggregate
materially impair the value of the assets of the Company and the
Subsidiaries;
(n) other Liens securing Debt that, when aggregated with the Debt of
Subsidiaries permitted under Section 6.01(a)(viii) and the aggregate sale
price of the assets sold in sale and leaseback transactions permitted under
Section 6.03, does not exceed 10.0% of Consolidated Assets at any time; and
(o) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in
the foregoing clauses (other than clause (n)), PROVIDED that (i) the
obligations secured thereby shall be limited to the obligations secured by
the Lien so extended, renewed or replaced (and, to the extent provided in
the foregoing clauses, extensions, renewals and replacements thereof) and
(ii) such Lien shall be limited to all or a part of the assets that secured
the Lien so extended, renewed or replaced.
SECTION 6.03. SALE AND LEASEBACK TRANSACTIONS. The Company will not,
and will not permit any Subsidiary to, enter into any arrangement, directly or
indirectly, with any Person whereby it shall sell or transfer any property, real
or personal, used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease property which it intends to use for
substantially the same purpose or purposes as the property being sold or
transferred; PROVIDED, HOWEVER, that, notwithstanding the above, the Company or
any Subsidiary may engage in any other sale and leaseback transactions if the
aggregate sale price of the assets sold in such other transactions, when
aggregated with the Debt of Subsidiaries permitted under Section 6.01(a)(viii)
and the Debt secured by Liens permitted pursuant to Section 6.02(n), does not
exceed 10.0% of Consolidated Assets at any time.
SECTION 6.04. FUNDAMENTAL CHANGES. (a) The Company will not, and will
not permit any Material Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) assets (including capital stock of Material Subsidiaries)
constituting all or substantially all the assets of the Company and the
Subsidiaries on a consolidated basis (whether now owned
48
or hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) the Company or any Subsidiary may merge or
consolidate with any Person; PROVIDED that (A) in the case of any merger or
consolidation involving the Company, either (x) the Company shall be the
continuing or surviving corporation or (y) the continuing or surviving
corporation shall be organized under the laws of the United States or any State
thereof and shall assume all of the Company's obligations under this Agreement
in a manner reasonably acceptable to the Arrangers and (B) in the case of any
merger or consolidation involving a Subsidiary (other than a merger or
consolidation with the Company), the surviving entity shall be a Subsidiary,
(ii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets
to the Company or to another Subsidiary and (iii) any Subsidiary may liquidate
or dissolve if the Company determines in good faith that such liquidation or
dissolution is in the best interests of the Company and is not materially
disadvantageous to the Lenders.
(b) The Company will not, and will not permit any Subsidiary to,
engage to any material extent in any business other than businesses of the type,
or involving similar themes, content and customer orientation, as the business
conducted by the Company and its Subsidiaries on the date hereof and businesses
reasonably related thereto.
SECTION 6.05. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any Subsidiary to, sell, lease or otherwise transfer any
material property or assets to, or purchase, lease or otherwise acquire any
material property or assets from, or otherwise engage in any other material
transactions with, any of its Affiliates, except (a) at prices and on terms and
conditions not less favorable to the Company or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b) transactions
between or among any wholly owned Subsidiary and the Company or any other wholly
owned Subsidiary not involving any Affiliate that is not a wholly owned
Subsidiary, (c) payments made and other transactions entered into in the
ordinary course of business with officers and directors of the Company or any
Subsidiary, and consulting fees and expenses incurred in the ordinary course of
business payable to former officers or directors of the Company or any
Subsidiary, (d) reclassifications or changes in the terms of or other
transactions relating to Equity Interests in the Company held by Affiliates that
do not involve the payment of any consideration (other than Equity Interests of
the Company) or any other transfer of value by the Company or any Subsidiary to
any such Affiliate, and (e) any payments by the Company or any Subsidiary to or
on behalf of any Affiliate of the Company or any Subsidiary in connection with
out-of-pocket expenses incurred in connection with any public or private
offering, other issuance or sale of stock by the Company or an Affiliate of the
Company or other transaction for the benefit of the Company or any Subsidiary;
PROVIDED, HOWEVER, that this Section shall not limit the operation or effect of,
or any payments under, (i) any license, lease, service contract, purchasing
agreement, disposition agreement or similar arrangement entered into in the
ordinary course of business between any Subsidiary and the Company or any other
Subsidiary or (ii) any joint venture to which the Company or any Subsidiary is a
party entered into in connection with, or reasonably related to, its lines of
business.
49
SECTION 6.06. RESTRICTIVE AGREEMENTS. The Company will not, and will
not permit any Subsidiary to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon the ability of any Subsidiary to pay dividends or
other distributions with respect to its Equity Interests or to make or repay
loans or advances to the Company or any other Subsidiary or to guarantee Debt of
the Company or any other Subsidiary; PROVIDED that the foregoing shall not apply
to (a) restrictions and conditions imposed by law or by this Agreement, (b)
restrictions and conditions with respect to a Person that is not a Subsidiary on
the date hereof, which restrictions and conditions are in existence at the time
such Person becomes a Subsidiary and are not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary and (c) provisions limiting
loans, advances, guarantees or other investments or Restricted Payments (as
defined in the Existing Term Loan Agreement) by Subsidiaries that are not more
restrictive than the provisions related to loans, advances, guarantees or other
investments or Restricted Payments by Subsidiaries set forth in Section 6.06 or
Section 6.10(a) of the Existing Term Loan Agreement.
SECTION 6.07. SWAP AGREEMENTS. The Company will not, and will not
permit any of its Subsidiaries to, enter into any Swap Agreement, other than
Swap Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Company or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities or to take advantage of
reduced interest rates by converting fixed rate obligations to floating rate
obligations.
SECTION 6.08. CONSOLIDATED INTEREST COVERAGE RATIO. The Company will
not permit the Consolidated Interest Coverage Ratio for any period of four
consecutive fiscal quarters ending after the date hereof to be less than 3.00 to
1.00.
SECTION 6.09. CONSOLIDATED LEVERAGE RATIO. The Company will not permit
the Consolidated Leverage Ratio as of the last day of any fiscal quarter to be
greater than 3.25 to 1.00.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) any representation or warranty made or deemed made by or on behalf
of the Company or any Subsidiary in or in connection with any Loan
Document, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document,
shall prove to have been incorrect in any material respect when made or
deemed made;
(b) any Borrower shall fail to pay any principal of any Loan when and
as the same shall become due and payable, whether at the due date thereof
or at a date fixed for prepayment thereof or otherwise;
50
(c) any Borrower shall fail to pay any interest on any Loan or any Fee
or any other amount (other than an amount referred to in clause (b) above)
payable under any Loan Document, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;
(d) the Company or any Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, Section 5.03
(with respect to any Borrower's existence) or Section 5.08 or in Article
VI;
(e) the Company or any Subsidiary shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other than
those specified in clause (b), (c) or (d) above), and such failure shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent or any Lender to the Company;
(f) (i) the Company or any Material Subsidiary shall fail to make any
payment of principal, interest or other amounts in respect of any Material
Debt, when and as the same shall become due and payable (or, in the case of
payments other than principal payments, within any applicable grace
period), or (ii) any other event or condition occurs that results in any
Material Debt becoming due prior to its scheduled maturity or that enables
or permits the holder or holders of any Material Debt or any trustee or
agent on its or their behalf to cause any Material Debt to become due, or
to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; PROVIDED that this clause (ii) shall not
apply to (A) secured Debt that becomes due as a result of the voluntary
sale or transfer of the property or assets securing such Debt or (B) any
mandatory redemption of Senior Notes required to be made with the proceeds
of any asset sale;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the Company or any Material Subsidiary or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any
Material Subsidiary or for a substantial part of its assets; and, in each
case, such proceeding or petition shall continue undismissed for 60 days or
an order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Company or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause
(h)(i) above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Company or any Material Subsidiary or for a substantial part of its
51
assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(i) the Company or any Material Subsidiary shall become unable, admit
in writing or fail generally to pay its debts as they become due;
(j) one or more judgments for the payment of money in an aggregate
amount (to the extent not covered by insurance) in excess of $20,000,000
shall be rendered against the Company, any Material Subsidiary or any
combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Company or any Material Subsidiary to enforce
any such judgment;
(k) an ERISA Event shall have occurred that, when taken together with
all other ERISA Events that have occurred, could reasonably be expected to
result in any liability of the Company and its Subsidiaries in an aggregate
amount not exceeding $10,000,000 or could reasonably be expected to result
in a Material Adverse Effect;
(l) a Change in Control shall occur;
(m) any material provision of the Guarantee or Pledge Agreement, or of
any other Security Document relating to any material portion of the
Collateral, shall, for any reason, not be, or shall be asserted in writing
by the Company or any Subsidiary not to be, in full force and effect, or
otherwise valid, binding and enforceable against any person purported to be
bound by it; or
(n) any Lien purported to be created under the Pledge Agreement or any
other Security Document, in each case, with respect to any material portion
of the Collateral shall cease to be, or shall be asserted by any Loan Party
not to be, a valid, perfected first priority Lien (subject only to Liens
permitted under Section 6.02) on such Collateral, except as a result of the
release of such Collateral pursuant to the provisions of this Agreement or
the Security Documents
then, and in every such event (other than an event with respect to any Borrower
described in clause (g), (h) or (i) above), and at any time thereafter during
the continuance of such event, the Administrative Agent may with the consent of
the Required Lenders, and at the request of the Required Lenders shall, by
notice to the Company, take either or both of the following actions, at the same
or different times: (i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
liabilities of the Borrowers accrued hereunder, shall become due and payable
immediately, without presentment, demand,
52
protest or other notice of any kind, all of which are hereby waived by the
Borrowers; and in case of any event with respect to any Borrower described in
clause (g), (h) or (i) above, the Commitments shall automatically terminate and
the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other liabilities of the Borrowers accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrowers.
Upon the occurrence and during the continuance of any Event of
Default the Administrative Agent may, with the consent of the Required Lenders,
and shall, at the request of the Required Lenders, instruct the Collateral Agent
to exercise any remedies available to it under any Security Document.
ARTICLE VIII
THE AGENTS
Each of the Lenders hereby irrevocably appoints the Agents as its
agents and authorizes the Agents to take such actions on its behalf and to
exercise such powers as are delegated to the Agents by the terms hereof and of
the other Loan Documents, together with such actions and powers as are
reasonably incidental thereto.
The bank or banks serving as the Agents hereunder shall have the same
rights and powers in their capacity as Lenders as any other Lender and may
exercise the same as though they were not Agents, and such bank or banks and
their Affiliates may accept deposits from, lend money to and generally engage in
any kind of business with the Company or any Subsidiary or other Affiliate
thereof as if they were not Agents hereunder.
The Agents shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing (a)
the Agents shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing, (b) the Agents
shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated hereby that the Agents are required to exercise in writing by the
Required Lenders, and (c) except as expressly set forth herein, the Agents shall
not have any duty to disclose, and shall not be liable for the failure to
disclose, any information communicated to the Agents by or relating to the
Company or any of its Subsidiaries. The Agents shall not be liable for any
action taken or not taken by them with the consent or at the request of the
Required Lenders or the Lenders, as the case may be, or in the absence of their
own gross negligence or wilful misconduct. In addition, the Agents shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Agents by the Company or a Lender, and the Agents shall
not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or
53
other terms or conditions set forth herein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article III or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Agents.
The Agents shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by them to be genuine
and to have been signed or sent by the proper Person. The Agents also may rely
upon any statement made to them orally or by telephone and believed by them to
be made by the proper Person, and shall not incur any liability for relying
thereon. The Agents may consult with legal counsel (who may be counsel for the
Company), independent accountants and other experts selected by them, and shall
not be liable for any action taken or not taken by them in accordance with the
advice of any such counsel, accountants or experts.
The Agents may perform any and all their duties and exercise their
rights and powers by or through any one or more sub-agents appointed by the
Agents. The Agents and any such sub-agent may perform any and all their duties
and exercise their rights and powers through their respective Affiliates. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Affiliates of the Agents and any such sub-agent.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders and
the Company. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor with the Company's written consent (which shall not
be unreasonably withheld or delayed and shall not be required from the Company
if an Event of Default has occurred and is continuing). If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, with the
Company's written consent (which shall not be unreasonably withheld or delayed
and shall not be required if an Event of Default has occurred and is
continuing), appoint a successor Agent which shall be a bank or an Affiliate
thereof, in each case with a net worth of at least $1,000,000,000 and an office
in New York, New York. Upon the acceptance of its appointment as Agent hereunder
by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After an
Agent's resignation hereunder, the provisions of this Article and Section 10.03
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Agents or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Agents or any other Lender and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own
54
decisions in taking or not taking action under or based upon this Agreement, any
related agreement or any document furnished hereunder or thereunder.
None of the Joint Lead Arrangers, the Syndication Agent or the
Co-Documentation Agents named on the cover page of this Agreement shall, in its
capacity as such, have any duties or responsibilities under this Agreement
(other than, in the case of the Joint Lead Arrangers, those described in Section
6.04).
ARTICLE IX
JOINT AND SEVERAL LIABILITY OF BORROWERS; GUARANTEE; SUBSIDIARY GUARANTEES
SECTION 9.01. JOINT AND SEVERAL LIABILITY OF BORROWERS.
Notwithstanding any other provision of this Agreement, it is agreed that each
Borrower shall be fully liable, both severally and jointly with the other
Borrowers, for the full amount of the Obligations, whether incurred by such
Borrower or by any other Borrower.
SECTION 9.02. GUARANTEE. In order to induce the Lenders to extend
credit to the Borrowing Subsidiaries hereunder, and without limiting the
provisions of Section 9.01, the Guarantor hereby unconditionally and irrevocably
guarantees, as a primary obligor and not merely as a surety, the Obligations of
the Borrowing Subsidiaries. The Guarantor also agrees that the Obligations of
the Borrowing Subsidiaries may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its Guarantee hereunder notwithstanding any such extension or renewal of any
such Obligation.
The Guarantor waives presentment to, demand of payment from and
protest to any Borrower of any of the Obligations of the Borrowing Subsidiaries,
and also waives notice of acceptance of its obligations and notice of protest
for nonpayment. The obligations of the Guarantor hereunder shall not be affected
by the failure of any Lender or the Agents to assert any claim or demand or to
enforce any right or remedy under the provisions of this Agreement or any of the
other Loan Documents or otherwise, or, except as specifically provided therein,
by any rescission, waiver, amendment or modification of any of the terms or
provisions of this Agreement, any of the other Loan Documents or any other
agreement.
The Guarantor further agrees that its Guarantee hereunder constitutes
a promise of payment when due and not merely of collection, and waives any right
to require that any resort be had by any Lender to any balance of any deposit
account or credit on the books of any Lender in favor of any Borrowing
Subsidiary or any other person.
The obligations of the Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, and shall
not be subject to any defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations of the Borrowing Subsidiaries, any impossibility in the performance
of such Obligations or otherwise and
55
regardless of any law, regulation or order of any jurisdiction, or any other
event, affecting any term of any such Obligation or any Lender's rights with
respect thereto. Without limiting the generality of the foregoing, the
obligations of the Guarantor hereunder shall not be discharged or impaired or
otherwise affected by the failure of the Agents or any Lender to assert any
claim or demand or to enforce any remedy under this Agreement or under any other
Loan Document or any other agreement, by any waiver or modification in respect
of any thereof, by any default, failure or delay, wilful or otherwise, except as
specifically provided therein, in the performance of the Obligations of the
Borrowing Subsidiaries, by any release of any other guarantor, or by any other
act or omission which may or might in any manner or to any extent vary the risk
of the Guarantor or otherwise operate as a discharge of the Guarantor as a
matter of law or equity.
The Guarantor further agrees that its obligations hereunder shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of principal of or interest on any Obligation of
the Borrowing Subsidiaries is rescinded or must otherwise be restored by the
Agents or any Lender upon the bankruptcy or reorganization of any Borrower or
otherwise.
In furtherance of the foregoing and not in limitation of any other
right which the Agents or any Lender may have at law or in equity against the
Guarantor by virtue hereof, upon the failure of any Borrowing Subsidiary to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Guarantor hereby
promises to and will, upon receipt of written demand by the Agents, forthwith
pay, or cause to be paid, in cash the amount of such unpaid Obligation.
Upon payment by the Guarantor of any sums as provided above, all
rights of the Guarantor against any Borrowing Subsidiary arising as a result
thereof by way of right of subrogation or otherwise shall in all respects be
subordinated and junior in right of payment to the prior indefeasible payment in
full of all the Obligations, the Guarantor hereby agreeing that it will not
assert any claim in respect of such rights until all the Obligations shall have
been indefeasibly paid in full.
SECTION 9.03. SUBSIDIARY GUARANTEES. In order to induce the Lenders
to extend credit to the Borrowers hereunder, and without limiting the provisions
of Section 9.01, each Subsidiary Guarantor hereby unconditionally and
irrevocably guarantees, jointly with the other Subsidiary Guarantors and
severally, as a primary obligor and not merely as a surety, the due and punctual
payment and performance of the Obligations. Each Subsidiary Guarantor also
agrees that the Obligations may be extended or renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its Guarantee hereunder notwithstanding any such extension or renewal of any
such Obligation.
Each Subsidiary Guarantor waives presentment to, demand of payment
from and protest to the Company or any Borrower of any of the Obligations, and
also waives notice of acceptance of its obligations and notice of protest for
nonpayment. The obligations of each Subsidiary Guarantor hereunder shall not be
affected by the failure of
56
any Lender or the Agents to assert any claim or demand or to enforce any right
or remedy under the provisions of this Agreement or any of the other Loan
Documents or otherwise, or, except as specifically provided therein, by any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Agreement, any of the other Loan Documents or any other agreement.
Each Subsidiary Guarantor further agrees that its Guarantee hereunder
constitutes a promise of payment when due and not merely of collection, and
waives any right to require that any resort be had by any Lender to any balance
of any deposit account or credit on the books of any Lender in favor of the
Company, any Borrower or any other Person.
The obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason,
and shall not be subject to any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations, any impossibility in the performance of
such Obligations or otherwise and regardless of any law, regulation or order of
any jurisdiction, or any other event, affecting any term of any such Obligation
or any Lender's rights with respect thereto. Without limiting the generality of
the foregoing, the obligations of each Subsidiary Guarantor hereunder shall not
be discharged or impaired or otherwise affected by the failure of the Agents or
any Lender to assert any claim or demand or to enforce any remedy under this
Agreement or under any other Loan Document or any other agreement, by any waiver
or modification in respect of any thereof, by any default, failure or delay,
wilful or otherwise, except as specifically provided therein, in the performance
of the Obligations, by any release of any other guarantor, or by any other act
or omission which may or might in any manner or to any extent vary the risk of
such Subsidiary Guarantor or otherwise operate as a discharge of such Subsidiary
Guarantor as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its obligations
hereunder shall continue to be effective or be reinstated, as the case may be,
if at any time payment, or any part thereof, of principal of or interest on any
Obligation is rescinded or must otherwise be restored by the Agents or any
Lender upon the bankruptcy or reorganization of any Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which the Agents or any Lender may have at law or in equity against the
Subsidiary Guarantors by virtue hereof, upon the failure of any Borrower to pay
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each Subsidiary Guarantor
hereby promises to and will, upon receipt of written demand by the Agents,
forthwith pay, or cause to be paid, in cash the amount of such unpaid
Obligation.
Upon payment by any Subsidiary Guarantor of any sums as provided
above, all rights of such Subsidiary Guarantor against the Company or any
Borrower arising as a result thereof by way of right of subrogation or otherwise
shall in all respects be subordinated and junior in right of payment to the
prior indefeasible payment in full of
57
all the Obligations, each Subsidiary Guarantor hereby agreeing that it will not
assert any claim in respect of such rights until all the Obligations shall have
been indefeasibly paid in full.
In addition to all such rights of indemnity and subrogation as the
Subsidiary Guarantors may have under applicable law (but subject to the
immediately preceding paragraph), the Company agrees that in the event a payment
shall be made by any Subsidiary Guarantor under this Section, the Company shall
indemnify such Subsidiary Guarantor for the full amount of such payments and
shall be subrogated to the rights of the Person to whom such payment shall have
been made to the extent of such payment.
Each Subsidiary Guarantor (a "CONTRIBUTING GUARANTOR") agrees
(subject to the seventh paragraph of this Section 9.03) that in the event a
payment shall be made by any other Subsidiary Guarantor hereunder in respect of
any Obligation and such other Subsidiary Guarantor (the "CLAIMING GUARANTOR")
shall not have been fully indemnified by the Company as provided in the
immediately preceding paragraph, the Contributing Guarantor shall indemnify the
Claiming Guarantor in an amount equal to the amount of such payment multiplied
by a fraction of which the numerator shall be the net worth of the Contributing
Guarantor of the date hereof and the denominator shall be the aggregate net
worth of all the Subsidiary Guarantors on the date hereof. Any Contributing
Guarantor making any payment to a Claiming Guarantor pursuant to this paragraph
shall be subrogated to the rights of such Claiming Guarantor under this
paragraph, and to the rights of the Person that shall have held the Obligations
so paid, in each case to the extent of such payment.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Company, to it at Reader's Xxxxxx Xxxx, Xxxxxxxxxxxxx,
Xxx Xxxx 00000-0000, Attention of Treasurer (Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent or Collateral Agent, to JPMorgan
Chase Bank, N.A., 0000 Xxxxxx, Xxxxxxx, Xxxxx 00000, Attention of Xxxxxxx
Xxxxxxx (Telecopy No. (000) 000-0000), with a copy to JPMorgan Chase Bank,
N.A., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxxx
Xxxxx (Telecopy No. (000) 000-0000). Each notice required to be given by
the Administrative Agent or by the Required Lenders under this Agreement,
other than any notice under Article 2 or Section 10.04, shall
simultaneously be given to the Collateral Agent; and
58
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire;
PROVIDED, HOWEVER, that any notice or other communication provided for herein to
be given to or by the Company or any Borrowing Subsidiary shall be deemed
effective as to the Company and as to all Borrowing Subsidiaries when given to
or by the Company, as the case may be.
Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 10.02. WAIVERS; AMENDMENTS. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) below, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given.
(b) None of this Agreement, any other Loan Document or any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Borrowers and the
Required Lenders or by the Borrowers and the Administrative Agent or the
Collateral Agent, as the case may be, with the consent of the Required Lenders;
PROVIDED that no such agreement shall (i) increase or extend the expiration date
of the Commitment of any Lender without the written consent of such Lender, (ii)
reduce or forgive all or part of the principal amount of any Loan or reduce the
rate of interest thereon, or reduce any Fees or other amounts payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment or prepayment of the principal amount of any Loan, or
any interest payable hereunder, or any Fees or other amounts payable hereunder,
or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18 in a manner that would
alter the pro rata sharing of any payment without the written consent of each
Lender adversely affected thereby, or change any provision of the Pledge
Agreement or any other Security Document to alter the pro rata distribution of
amounts payable to the Secured Parties, in each case without the written consent
of each Lender adversely affected thereby, (v) reduce or terminate the
obligations of the Guarantor, any Subsidiary Guarantor or any Borrower under
Article IX, without the written consent of each Lender, (vi) change any of the
provisions of this Section or the definition of "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required in
order to
59
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, (vii) release
all or substantially all the Subsidiary Guarantors from their Guarantees
hereunder, or release all or substantially all the Collateral from the Liens of
the Pledge Agreement (other than as contemplated in Section 10.04), without the
written consent of each Lender or (viii) amend the reinstatement provisions of
Section 10.14(c), without the written consent of each Lender; PROVIDED FURTHER
that no such agreement shall amend, modify or otherwise affect the respective
rights or duties of either Agent without the prior written consent of such
Agent.
SECTION 10.03. EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Company
agrees to pay (i) all reasonable out-of-pocket expenses incurred by each Agent
and its Affiliates, including the reasonable fees, charges and disbursements of
Cravath, Swaine & Xxxxx LLP, counsel for the Agents, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and
evaluations of the Collateral (limited, in the absence of a continuing Default,
to one such evaluation in any fiscal year) or other due diligence conducted by
the Agents and (ii) all reasonable out-of-pocket expenses incurred by either
Agent or any Lender, including the reasonable fees, charges and disbursements of
any counsel for such Agent or Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement or the Loans made
hereunder. The Lenders shall endeavor in good faith to limit the number of
counsel retained by them to avoid duplication of expenses.
(b) The Company agrees to indemnify each Agent and each Lender, each
Affiliate of any of the foregoing Persons and each of their respective
directors, officers, employees, trustee, advisors and agents (each such Person
being called an "INDEMNITEE") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including the fees, charges and disbursements of any counsel for any Indemnitee,
incurred by or asserted against any Indemnitee relating to the execution or
delivery of this Agreement or any agreement or instrument contemplated thereby,
the performance of its obligations thereunder, the Borrowings hereunder, the
consummation of the Transactions or any other transactions contemplated hereby,
the enforcement of its rights under any Loan Document or any actual or alleged
presence or release of Hazardous Materials on or from any property currently or
formerly owned, operated or leased by the Company or any of its Subsidiaries or
Environmental Liability related in any way to the Company or any of its
Subsidiaries, including any of the foregoing arising out of, in connection with,
or as a result of any claim, litigation, investigation or proceeding (whether or
not any Indemnitee is a party thereto); PROVIDED that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction to have resulted from the gross negligence, wilful misconduct or
bad faith of such Indemnitee. The Lenders shall endeavor in good faith to limit
the number of counsel retained by them to avoid duplication of expenses.
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(c) To the extent that the Company, any Borrower or the Company in its
capacity as Guarantor fails to pay any amount required to be paid by it to
either of the Agents under paragraph (a) or (b) of this Section, each Lender
severally agrees to pay to such Agent such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; PROVIDED that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent in its capacity as such
and are not determined by a court of competent jurisdiction to have resulted
from the gross negligence, wilful misconduct or bad faith of such Agent.
(d) All amounts due under this Section shall be payable promptly after
written demand therefor.
(e) To the extent permitted by applicable law, the Company, any
Borrower or the Company as Guarantor shall not assert, and hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, any Loan or the use of the proceeds
thereof or the Transactions.
(f) Notwithstanding anything above to the contrary, no indemnified
person shall be liable for any damages arising from the use by others of
information or other materials obtained through electronic telecommunications or
other information transmission systems.
SECTION 10.04. SUCCESSORS AND ASSIGNS. (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that (i) no
Borrower may 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 any Borrower without such consent shall be null and
void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby, Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more 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) with the prior written
consent (such consent not to be unreasonably withheld or delayed) of:
(A) the Company; provided that no consent of the Company shall be
required for an assignment to a Lender, an Affiliate of a Lender, an
Approved
61
Fund (as defined below) or, if an Event of Default has occurred and is
continuing, any other assignee; and
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment to a Lender, an
Affiliate of a Lender or an Approved Fund.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of
a Lender, the amount of the Commitment of the assigning Lender subject to
each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 or, if smaller, the
entire remaining amount of the assigning Lender's Commitment, unless the
Company and the Administrative Agent shall otherwise consent, PROVIDED that
(i) in the event of concurrent assignments to two or more assignees that
are Affiliates of one another, or to two or more Approved Funds managed by
the same investment advisor or by affiliated investment advisors, all such
concurrent assignments shall be aggregated in determining compliance with
this subsection and (ii) no such consent of the Company shall be required
if an Event of Default has occurred and is continuing;
(B) 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.
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; provided that in the event of
concurrent assignments to two or more assignees that are Affiliates of one
another, or to two or more Approved Funds managed by the same investment
advisor or by affiliated investment advisors, only one such fee shall be
payable;
(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and
(E) in the case of an assignment by a Lender to a CLO (as defined
below) managed by such Lender or by an Affiliate of such Lender, unless
such assignment (or an assignment to a CLO managed by the same manager or
an Affiliate of such manager) shall have been approved by the Company (the
Company hereby agreeing that such approval, if requested, will not be
unreasonably withheld or delayed), the assigning Lender shall retain the
sole right to approve any amendment, modification or waiver of any
provision of this Agreement, except that the Assignment and Assumption
between such Lender and such CLO may provide that such Lender will not,
without the consent of such CLO, agree to any amendment, modification or
waiver described in the first proviso to Section 10.02(b) that affects such
CLO.
62
For the purposes of this Section 10.04(b), the terms "APPROVED FUND"
and "CLO" have the following meanings:
"APPROVED FUND" means (a) with respect to any Lender, a CLO managed
by such Lender or by an Affiliate of such Lender and (b) with respect to any
Lender that is a fund which invests in bank loans and similar extensions of
credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender.
(iii) Subject to acceptance and recording thereof pursuant to paragraph
(b)(iv) of this Section, from and after the effective date specified in each
Assignment and Assumption the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, 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 and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption 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 Sections
2.15, 2.17, 2.21 and 10.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 10.04
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 paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitments of, and principal amount of
the Loans owing to, each Lender pursuant to the terms hereof from time to time
(the "REGISTER"). The entries in the Register shall be conclusive, and the
Borrowers, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Company and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for
63
purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(c) (i) Any Lender may, without notice to or the consent of the
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
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (A) such Lender's obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent and the 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 the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (c)(ii) of this Section, the Borrowers agree
that each Participant shall be entitled to the benefits of Sections 2.15, 2.17
and 2.21 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section. To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to
Section 2.19 as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.21 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 the
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 Section 2.21 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrowers, to comply with Section
2.21(e) as though it were a Lender.
(d) Any Lender, without notice to or the consent of any Borrower or the
Administrative Agent, 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 any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; 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.
(e) By executing and delivering an Assignment and Assumption, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned
64
thereby free and clear of any adverse claim and that its Commitment and the
outstanding balances of its Term Loans, in each case without giving effect to
assignments thereof that have not become effective, are as set forth in such
Assignment and Assumption; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any of the foregoing, or the financial condition of the Loan Parties or the
performance or observance by the Loan Parties of any of their obligations under
this Agreement or under any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; (iii) each of the assignee and
the assignor represents and warrants that it is legally authorized to enter into
such Assignment and Assumption; (iv) such assignee confirms that it has received
a copy of this Agreement, together with copies of any amendments or consents
entered into prior to the date of such Assignment and Assumption and copies of
the most recent financial statements delivered pursuant to Section 5.01 and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Assumption; (v)
such assignee will independently and without reliance upon the Agents, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Agents to take such action as agents on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to them by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all the obligations
that by the terms of this Agreement are required to be performed by it as a
Lender.
SECTION 10.05. SURVIVAL. All covenants, agreements, representations
and warranties made by the Borrowers herein and in the certificates or other
instruments prepared or delivered in connection with or pursuant to this
Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any Fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.15, 2.17, 2.21 and 10.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination of
this Agreement or any other provision hereof.
SECTION 10.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken
65
together shall constitute a single contract. This Agreement and any separate
letter agreements with respect to fees payable to the Administrative Agent
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. Except as provided in Section
3.01, this Agreement shall become effective when it shall have been executed by
the Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted successors and
assigns. Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 10.07. SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. RIGHT OF SETOFF. (a) If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Company or any Borrower against any of and
all the Obligations held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
Obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
(b) Each Lender agrees promptly to notify the Administrative Agent and
the Company or the applicable Borrower after any such setoff and application;
PROVIDED, HOWEVER, that the failure to give any such notice shall not affect the
validity of such setoff and application.
SECTION 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF NEW YORK.
(b) Each Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and
66
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against any Borrower or its properties in the courts of any
jurisdiction.
(c) Each Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. CONFIDENTIALITY. Each of the Administrative Agent and
the Lenders agrees to maintain and cause its Affiliates to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors or to any
other Lender or Participant (it being understood that such disclosure will be
made only to such Persons who have, and only to the extent of, the need to know
such Information and only if the Persons to whom such disclosure is
67
made are informed of the confidential nature of such Information and instructed
to keep such Information confidential and use such information only as necessary
in connection with (i) their evaluation of the ability of the Company or any
Borrowing Subsidiary to repay the Loans and perform their other obligations
under the Loan Documents, (ii) administering the Obligations under this
Agreement, (iii) servicing the Borrowings hereunder, (iv) protecting their
interests under this Agreement or (v) performing any similar function in
connection with any other extension of credit by the Lenders to the Company or a
Subsidiary), (b) to the extent requested by any regulatory authority to which
the Lender is subject or in connection with an examination of the Lender by any
such authority, (c) to the extent otherwise required by applicable laws and
regulations or by any subpoena or similar legal process, (d) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder, (e) subject
to an agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, or, in
the case of any Approved Fund, to any rating agency, commercial paper dealer or
provider of a surety, guarantee or credit or liquidity enhancement to such
Approved Fund, (f) with the prior written consent of the Company, (g) to any
direct or indirect contractual counterparty in any swap, hedge or similar
agreement (or to any professional advisor of such contractual counterparty), so
long as such contractual counterparty (or such professional advisor) agrees in
writing to be bound by the provisions of this Section, or (h) to the extent such
Information (i) becomes publicly available other than as a result of a
disclosure by an Agent or Lender or (ii) becomes available to the Administrative
Agent or any Lender on a nonconfidential basis from a source other than any
Borrower that is not known to the Administrative Agent or such Lender to be
bound by any duty of confidentiality with respect thereto. For the purposes of
this Section, "INFORMATION" means all information received from the Borrowers
relating to any Borrower and Subsidiaries of the Company or their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Borrower; PROVIDED that, in the case of information received
from the Borrowers after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 10.13. CONVERSION OF CURRENCIES. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum owing
hereunder in one currency into another currency, each party hereto agrees, to
the fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the first currency could be purchased with such other
currency on the Business Day immediately preceding the day on which final
judgment is given.
(b) The obligations of each Borrower in respect of any sum due to any
party hereto or any holder of the obligations owing hereunder (the "APPLICABLE
CREDITOR")
68
shall, notwithstanding any judgment in a currency (the "JUDGMENT
CURRENCY") other than the currency in which such sum is stated to be due
hereunder (the "AGREEMENT CURRENCY"), be discharged only to the extent that, on
the Business Day following receipt by the Applicable Creditor of any sum
adjudged to be so due in the Judgment Currency, the Applicable Creditor may in
accordance with normal banking procedures in the relevant jurisdiction purchase
the Agreement Currency with the Judgment Currency; if the amount of the
Agreement Currency so purchased is less than the sum originally due to the
Applicable Creditor in the Agreement Currency, such Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Applicable Creditor against such loss. The obligations of the Borrowers
contained in this Section 10.13 shall survive the termination of this Agreement
and the payment of all other amounts owing hereunder.
SECTION 10.14. RELEASE OF LOAN PARTIES AND COLLATERAL. (a)
Notwithstanding any contrary provision herein or in any other Loan Document, if
the Company shall request the release under the Pledge Agreement or any other
Security Document of any Collateral, or under this Agreement of any Subsidiary
Guarantor, to be sold or otherwise disposed of (including through the sale or
disposition of any Subsidiary owning any such Subsidiary Guarantor or
Collateral) to a Person other than the Company or a Subsidiary in a transaction
permitted under the terms of this Agreement and shall deliver to the Collateral
Agent a certificate to the effect that such sale or other disposition and the
application of the proceeds thereof will comply with the terms of this
Agreement, the Collateral Agent, if satisfied that the applicable certificate is
correct, shall, without the consent of any Lender, execute and deliver all such
instruments, releases, financing statements or other agreements, and take all
such further actions, as shall be necessary to effectuate the release of such
Subsidiary or such Collateral substantially simultaneously with or at any time
after the completion of such sale or other disposition. Any such release shall
be without recourse to, or representation or warranty by, the Collateral Agent
and shall not require the consent of any Lender.
(b) Notwithstanding any other provision herein or in any other Loan
Document, the Collateral Agent is hereby authorized and directed to release the
Collateral from the Liens of the Security Documents on one or more Business Days
specified by the Borrower (each a "RELEASE DATE"), upon the satisfaction of the
following conditions precedent (the " RELEASE CONDITIONS"), and subject to the
reinstatement of such Liens as provided in paragraph (c) below:
(A) the Borrower shall have given notice to the Collateral Agent at
least 30 days prior to the Release Date, specifying the proposed Release
Date;
(B) the Ratings Requirement shall have been satisfied as of the date
of such notice and shall remain satisfied as of the Release Date;
(C) no Default or Event of Default hereunder shall have occurred and
be continuing as of the date of such notice or as of the Release Date; and
69
(D) on the Release Date, the Administrative Agent shall have received
a certificate, dated the Release Date and executed on behalf of the
Borrower by a Financial Officer thereof, confirming the satisfaction of the
Release Conditions set forth in clauses (B) and (C) above;
Any such release shall be without recourse to, or representation or warranty by,
the Collateral Agent and shall not require the consent of any Lender. Subject to
the satisfaction of the conditions set forth in this paragraph (b), on and after
the Release Date, the Collateral Agent shall execute and deliver all such
instruments, releases, financing statements or other agreements, and take all
such further actions, as shall be necessary to effectuate the release of
Collateral required by this paragraph. Subject to reinstatement as provided in
paragraph (c), on and after the Release Date the Company shall not be subject to
the provisions of Sections 5.09 and 5.10.
(c) If, following any release of Collateral pursuant to Section
10.14(b), the Ratings Requirement shall cease to be satisfied, the requirements
of Sections 5.09 and 5.10 shall again become applicable and the Borrower shall
promptly take and cause the Subsidiaries to take all such actions as shall be
necessary or as the Collateral Agent shall reasonably request to cause the
Collateral Requirement to be satisfied.
(d) Without limiting the provisions of Section 10.03, the Company
shall reimburse the Collateral Agent for all costs and expenses, including
attorneys' fees and disbursements, incurred by it in connection with any action
contemplated by this Section.
SECTION 10.15. SECURITY DOCUMENTS. Each Agent and Lender hereby
authorizes and directs the Collateral Agent to execute and deliver the Pledge
Agreement and each other Security Document. Each Agent and Lender, by executing
and delivering this Agreement, acknowledges and approves, and agrees to be bound
by and act in accordance with the terms and conditions of the Pledge Agreement
and each other Security Document (to the extent, in the case of each other
Security Document, that either (a) such Security Document shall have been made
available to the Lenders prior to the effectiveness of this Agreement or (b)
such terms and conditions are comparable to those contained in the Pledge
Agreement), specifically including the provisions of Articles VI, V, VI and VII
of the Pledge Agreement governing the exercise of remedies under such Agreement
and limiting the responsibilities of, and providing for the indemnification of
and the reimbursement of expenses incurred by, the Collateral Agent. Each party
hereto further agrees that the provisions of Articles IV, V, VI and VII of the
Pledge Agreement shall be deemed to be incorporated by reference into each other
Security Document, MUTATIS MUTANDIS, and as so incorporated shall govern the
exercise of remedies under each such Security Document and limit the
responsibilities of, and provide for the indemnification of and the
reimbursement of expenses incurred by, the Collateral Agent thereunder.
SECTION 10.16. POWER OF ATTORNEY. Each Lender hereby (i) authorizes
the Collateral Agent to execute and deliver, on behalf of and in the name of
such Lender, the Share Pledge Agreement with The Reader's Digest Association,
Inc. in connection with the pledge to the Lenders of shares in Verlag DAS BESTE
GmbH, a company
70
organized under the laws of Germany and registered in the Commercial Register of
the Lower District Court of Stuttgart under no. HR B 1453, (ii) authorizes the
Collateral Agent to appoint any further agents or attorneys to execute and
deliver, or otherwise to act, on behalf of and in the name of the Collateral
Agent for any such purpose, (iii) authorizes the Collateral Agent to do any and
all acts and to make all declarations which are deemed necessary or appropriate
to the Collateral Agent and (iv) approves, pursuant to Section 185 of the German
Civil Code, the acts performed and declarations made by the Collateral or its
representatives or attorneys-in-fact before a notary in Basel, Switzerland in
connection with the pledge to the Lenders of shares in Verlag DAS BESTE GmbH.
The Lenders hereby relieve the Collateral Agent from the self-dealing
restrictions imposed by Section 181 of the German Civil Code.
SECTION 10.17. APPOINTMENT. Each Agent and Lender hereby appoints the
Collateral Agent to act as its agent and trustee under and in connection with
the Charge over Shares to the Agents and Lenders of shares in The Reader's
Digest Association Limited, a company incorporated under the laws of England and
Wales (registered number 340452). The Agent agrees to hold the assets charged
under the Charge over Shares as trustee for the Agents and Lenders on the trusts
and other terms contained herein and in the Charge over Shares and each Agent
and Lender irrevocably authorizes the Collateral Agent to exercise such rights,
powers, authorities and discretions as are specifically delegated to the
Collateral Agent by the terms of the Charge over Shares together with all such
rights, powers, authorities and discretion as are reasonably incidental thereto.
SECTION 10.18. CHARGE OVER SHARES. Each Lender and the Agent hereby
undertake and covenant in favor of each other to perform the obligations and
duties expressed to be performed by it or them in Clause 24 of the Charge over
Shares in the manner contemplated therein as if such obligations of duties were
set out herein in full mutatis mutandis, and each Lender and the Agent hereby
acknowledge and agree in favor of each other that the various rights and
entitlements set out in the Charge over Shares are owed to each other in the
terms set out in the Charge over Shares and, as such, are enforceable against
each other party.
SECTION 10.19. U.S.A. PATRIOT ACT. Each Lender hereby notifies the
Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the "ACT"), it is required
to obtain, verify and record information that identifies each Borrower, which
information includes the name and address of each Borrower and other information
that will allow such Lender to identify each Borrower in accordance with the
Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
THE READER'S DIGEST ASSOCIATION, INC.,
--------------------------------------
BY
/s/ Xxxxxxx X. Xxxxxx
-----------------------------
NAME: Xxxxxxx X. Xxxxxx
TITLE: Vice President and Treasurer
BOOKS ARE FUN, LTD.,
--------------------
BY
/s/ Xxxxxxx X. Xxxxxx
-----------------------------
NAME: Xxxxxxx X. Xxxxxx
TITLE: Vice President and Treasurer
QSP, INC.,
----------
BY
/s/ Xxxxxxx X. Xxxxxx
-----------------------------
NAME: Xxxxxxx X. Xxxxxx
TITLE: Vice President and Treasurer
XXXXXX MEDIA GROUP, INC.,
-------------------------
BY
/s/ Xxxxxxx X. Xxxxxx
-----------------------------
NAME: Xxxxxxx X. Xxxxxx
TITLE: Vice President and Treasurer
72
JPMORGAN CHASE BANK, N.A.,
--------------------------
INDIVIDUALLY AND AS ADMINISTRATIVE
----------------------------------
AGENT AND COLLATERAL AGENT,
---------------------------
BY
/s/ Xxxxxxxx Xxxxx
---------------------------
NAME: Xxxxxxxx Xxxxx
TITLE: Vice President
73
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
THE ROYAL BANK OF SCOTLAND PLC
--------------------------------------
BY: /s/ Xxxxx Dec
---------------------------------
Name: Xxxxx Dec
Title: Vice President
74
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
COMMERZBANK AG,
NEW YORK AND GRAND CAYMAN BRANCHES
--------------------------------------
BY: /s/ S.R. Viswanathan
---------------------------------
Name: S.R. Viswanathan
Title: Senior Vice President
BY: /s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
75
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
WACHOVIA BANK, N.A.
--------------------------------------
BY: /s/ Xxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director
76
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
HSBC BANK USA, NATIONAL ASSOCIATION
--------------------------------------
BY: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President
77
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
ABN AMRO BANK N.V.
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BY: /s/ Xxxxx Xxxxxxxxxx
---------------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Director
BY: /s/ Xxxxxx Xxxxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
78
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
FLEET NATIONAL BANK
--------------------------------------
BY: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
79
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
XXXXXXX XXXXX CREDIT PARTNERS L.P.
--------------------------------------
BY: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
80
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
NATIONAL AUSTRALIA BANK LIMITED
--------------------------------------
BY: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Head, Corporate Banking
81
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
THE NORTHERN TRUST COMPANY
--------------------------------------
BY: /s/ Xxxxxxx Xxxxx
---------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President
82
SIGNATURE PAGE TO THE READER'S
DIGEST ASSOCIATION FIVE-YEAR
REVOLVING CREDIT AGREEMENT,
INSTITUTION:
MIZUHO CORPORATE BANK, LTD.
--------------------------------------
BY: /s/ Xxxx Xxxxxxx
---------------------------------
Name: Xxxx Xxxxxxx
Title: Senior Vice President
83
