EXHIBIT 10.2
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of October 9, 1997, among T/SF COMMUNICATIONS
CORPORATION, a Delaware corporation (hereinafter the "Borrower"), the several
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banks, financial institutions and other investors from time to time parties to
this Agreement (the "Lenders"), and FIRST UNION NATIONAL BANK, as administrative
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agent for the Lenders (in such capacity, the "Agent" or the "Administrative
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Agent.")
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W I T N E S S E T H:
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WHEREAS, the Borrower has requested the Lenders to make loans and other
financial accommodations in an amount up to $25,000,000 as more particularly
described herein;
WHEREAS, the Lenders are willing to make such loans on the terms and
conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, terms defined in the
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preamble to this Agreement have the meanings therein indicated, and the
following terms have the following meanings:
"Adjusted EBITDA": of any Person for any period, EBITDA for such
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period ("Unadjusted EBITDA") plus (i) if such Person made any
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acquisition permitted by Section 6.5(b) during such period, EBITDA
generated from such acquired businesses ("Acquired EBITDA") as if such
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acquisitions occurred at the beginning of the applicable period except
to the extent such Acquired EBITDA has already been included in the
calculation of Unadjusted EBITDA for such period, minus (ii) if such
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Person has sold or otherwise divested any information or publishing or
information or publishing related businesses or business trade
show/exposition or business trade show/exposition related businesses
during such period, EBITDA generated from such sold or divested
information or publishing or information or publishing related
businesses as if such sales or divestitures occurred at the beginning of
the applicable period.
"Affiliate": as to any Person, any other Person (excluding any
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Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, a Person shall be deemed to be "controlled
by" a Person if such Person possesses, directly or indirectly, power
either (a) to vote 10%
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or more of the securities having ordinary voting power for the election
of directors of such Person or (b) to direct or cause the direction of
the management and policies of such Person whether by contract or
otherwise.
"Aggregate Revolving Committed Amount": the aggregate amount of
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all of the Revolving Committed Amounts in effect from time to time, as
reduced from time to time as provided in Section 2.6.
"Agreement": this Credit Agreement, as amended, supplemented or
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modified from time to time in accordance with its terms.
"Applicable Interest Rate Percentage": for any day, the rate per
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annum set forth below opposite the applicable Total Leverage Ratio then
in effect, it being understood that the Applicable Interest Rate
Percentage for (i) Base Rate Loans shall be the percentage set forth
under the column "Base Rate Margin", and (ii) LIBOR Rate Loans shall be
the percentage set forth under the column "LIBOR Rate Margin":
LIBOR
Total Base Rate Rate
Leverage Ratio Margin Margin
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greater than or = to 5.50 1.5% 2.75%
greater than or = to 5.0 but less than 5.5 1.25% 2.5%
greater than or = to 4.5 but less than 5.0 1.0% 2.25%
greater than or = to 4.0 but less than 4.5 .75% 2.0%
less than 4.0 .50% 1.75%
The Applicable Interest Rate Percentage shall, in each case, be
determined and adjusted quarterly on the date five (5) Business Days
after the date of delivery of the quarterly compliance certificate and
financial information provided in accordance with Sections 5.1(b) and
5.2(b) (each an "Interest Determination Date").
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Such Applicable Interest Rate Percentage shall be effective from such
Interest Determination Date until the next such Interest Determination
Date. The initial Applicable Interest Rate Percentages shall be 1.25% in
the case of the Base Rate Margin and 2.5% in the case of the LIBOR Rate
Margin until the first Interest Determination Date occurring after the
Closing Date.
"Asset Disposition": means any sale, lease, transfer or other
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disposition (including any such transaction effected by way of merger,
amalgamation or
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consolidation) by the Borrower or any Restricted Subsidiary subsequent
to the Closing Date of any asset (including stock or other equity
interests in any Restricted Subsidiary), including without limitation
any sale leaseback transaction (whether or not involving a Capital
Lease), but excluding Specified Sales.
"Authorized Signatory": such senior personnel of the Borrower as
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may be duly authorized and designated in writing by the Borrower from
time to time to execute documents, agreements and instruments on the
Borrower's behalf.
"Bankruptcy Code": the Bankruptcy Code in Title 11 of the United
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States Code, as amended, modified, succeeded or replaced from time to
time.
"Base Rate": for any day, a rate per annum equal to the greater
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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%. For purposes
hereof: "Prime Rate" shall mean, at any time, the rate of interest per
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annum publicly announced from time to time by First Union at its
principal office in Charlotte, North Carolina as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of
business on the day such change in the Prime Rate occurs. The parties
hereto acknowledge that the rate announced publicly by First Union as
its Prime Rate is an index or base rate and shall not necessarily be its
lowest or best rate charged to its customers or other banks; and
"Federal Funds Effective Rate" shall mean, for any day, the weighted
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average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers,
as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published on the next
succeeding Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any
reason the Administrative Agent shall have determined (which
determination shall be conclusive in the absence of manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, including
the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms thereof, the Base
Rate shall be determined without regard to clause (b) of the first
sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective on the opening of business on the date of such
change.
"Base Rate Loans": Revolving Loans that bear interest at an
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interest rate based on the Base Rate.
"Borrower": as defined in the first paragraph of this Agreement.
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"Borrowing Date": in respect of any Revolving Loan, the date such
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Revolving Loan is made.
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"Business": as defined in subsection 3.10(b).
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"Business Day": a day other than a Saturday, Sunday or other day
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on which commercial banks in Charlotte, North Carolina or New York, New
York are authorized or required by law to close; provided, however, that
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when used in connection with a rate determination, borrowing or payment
in respect of a LIBOR Rate Loan, the term "Business Day" shall also
exclude any day on which banks in London, England are not open for
dealings in Dollar deposits in the London interbank market.
"Bridge Loan": means the loan of $80,000,000 made by First Union
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Corporation to the Borrower pursuant to the terms of that certain Senior
Subordinated Credit Agreement, dated as of the Closing Date, by and
between the Borrower and First Union Corporation.
"Capital Expenditures": all expenditures which in accordance with
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GAAP would be classified as capital expenditures, including without
limitation, Capital Lease Obligations; but excluding for purposes hereof
the aggregate amount of Capital Expenditures financed directly with the
proceeds of capital contributions and identified in the Borrower's
compliance certificate provided in accordance with the provisions of
Section 5.2(b).
"Capital Lease": any lease of property, real or personal, the
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obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations": the capitalized lease obligations
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relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests (including
partnership and limited liability company interests) in a Person (other
than a corporation) and any and all warrants or options to purchase any
of the foregoing.
"Cash Equivalents": means (i) securities issued or directly and
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fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition ("Government Obligations"), (ii) U.S. dollar denominated (or
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foreign currency fully hedged) time deposits, certificates of deposit,
Eurodollar time deposits and Eurodollar certificates of deposit of (y)
any domestic commercial bank of recognized standing having capital and
surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Xxxxx'x is at least P-1 or the equivalent thereof (any
such bank being an "Approved Bank"), in each case with maturities of not
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more than 364 days from the date of acquisition, (iii) commercial paper
and variable or fixed rate notes issued by any Approved
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Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody's and maturing within six months of the date of
acquisition, (iv) repurchase agreements with a bank or trust company
(including a Lender) or a recognized securities dealer having capital
and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States of America, (v) obligations of
any state of the United States or any political subdivision thereof for
the payment of the principal and redemption price of and interest on
which there shall have been irrevocably deposited Government Obligations
maturing as to principal and interest at times and in amounts sufficient
to provide such payment, (vi) auction preferred stock rated in the
highest short-term credit rating category by S&P or Moody's and (vii)
U.S. dollar denominated time and demand deposit accounts or money market
accounts with those domestic banks meeting the requirements of item (y)
or (z) of clause (ii) above and any other domestic commercial banks
insured by the FDIC with an aggregate balance not to exceed $100,000 in
the aggregate at any time at any such bank.
"Cash Tax Liabilities": the cash tax liability for income taxes
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paid by the Borrower or any Restricted Subsidiary or required to be
distributed to members or stockholders of the Borrower or any Restricted
Subsidiary.
"Closing Date": the date of this Agreement, being also the date
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on which each of the conditions specified in subsection 4.1 are
satisfied in full or waived in accordance with this Agreement.
"Code": the Internal Revenue Code of 1986, as amended from time
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to time.
"Commitment Fee: such term as defined in Section 2.7.
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"Commitment Letter": the letter agreement dated as of August 15,
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1997 between the Borrower and First Union.
"Commitment Period": the period from and including the Closing
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Date to but not including the Termination Date.
"Commitment Transfer Supplement": a Commitment Transfer
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Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity": an entity, whether or not
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incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Borrower and which is treated as a single employer under Section
414(b) or (c) of the Code, or solely for purposes of Section 302 of
ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
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"Consolidated Adjusted EBITDA": Adjusted EBITDA of the Borrower
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and the Restricted Subsidiaries on a consolidated basis determined in
accordance with GAAP applied on a consistent basis; provided, however,
Adjusted EBITDA of any Non-Guarantor Restricted Subsidiary shall be
reduced by an amount equal to such Adjusted EBITDA multiplied by the
percentage ownership interests of any minority stockholders in such
Non-Guarantor Restricted Subsidiary.
"Consolidated Capital Expenditures": Capital Expenditures of the
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Borrower and the Restricted Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis.
"Consolidated Cash Tax Liabilities": Cash Tax Liabilities of the
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Borrower and the Restricted Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis.
"Consolidated Fixed Charges": at any date, the sum of (i)
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Consolidated Interest Expense for the four (4) consecutive quarters
ending as of the date of computation plus (ii) the amount, if positive,
equal to the aggregate principal amount of Revolving Loans outstanding
on the first day of the period of four (4) consecutive quarters ending
as of the date of computation minus the Aggregate Revolving Committed
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Amount existing on the date of computation (exclusive, for purposes
hereof, of any voluntary reductions in the Revolving Commitments
pursuant to Section 2.6(a) or any mandatory reduction on account of any
Asset Disposition pursuant to Section 2.6(b)(ii)), plus (iii) payments
of principal made on all Indebtedness of the Borrower and the Restricted
Subsidiaries (other than payments on the Revolving Loans and the Bridge
Loan) during the four (4) consecutive quarters ending as of the date of
computation plus (iv) Consolidated Capital Expenditures made or incurred
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during the four (4) consecutive quarters ending as of the date of
computation other than with the proceeds from equity contributions made
during such period, plus (v) Commitment Fees paid during the period of
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four (4) consecutive quarters ending as of the date of computation, plus
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(vi) Consolidated Cash Tax Liabilities paid or distributed during the
period of four (4) consecutive quarters ending as of the date of
computation, net of tax refunds during that period.
"Consolidated Interest Expense": Interest Expense of the Borrower
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and the Restricted Subsidiaries on a consolidated basis determined in
accordance with GAAP applied on a consistent basis.
"Consolidated Senior Funded Debt: Senior Funded Debt of the
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Borrower and the Restricted Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis.
"Consolidated Total Funded Debt": Total Funded Debt of the
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Borrower and the Restricted Subsidiaries on a consolidated basis
determined in accordance with GAAP applied on a consistent basis.
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"Contractual Obligation": as to any Person, any provision of any
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security issued by such Person or of any material agreement, instrument
or undertaking to which such Person is a party or by which it or any of
its material property is bound.
"Copyrights": (i) all copyrights in all works, now existing or
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hereafter created or acquired, all registrations and recordings thereof,
and all applications in connection therewith, whether in the United
States Copyright Office or in any similar office or agency of the United
States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 3.13 to the Credit Agreement, and (ii)
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all renewals thereof including, without limitation, any thereof referred
to in Schedule 3.13 to the Credit Agreement.
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"Credit Documents": this Agreement, each of the Revolving Notes,
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the Guaranty and the Security Documents.
"Credit Parties": means, collectively, the Borrower, VS&A-T/SF,
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Fir Tree and the Guarantors.
"Debt Issuance" means the issuance of any Indebtedness for
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borrowed money by the Borrower.
"Default": any of the events specified in Section 7, whether or
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not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.
"Defaulting Lender": at any time, any Lender that, at such time
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(a) has failed to make a Revolving Loan required pursuant to the terms
of this Agreement, (b) has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of this
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"Dollars" and "$": dollars in lawful currency of the United
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States of America.
"Domestic Lending Office": initially, the office of each Lender
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designated as such Lender's Domestic Lending Office shown on Schedule
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9.2; and thereafter, such other office of such Lender as such Lender may
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from time to time specify to the Administrative Agent and the Borrower
as the office of such Lender at which Base Rate Loans of such Lender are
to be made.
"EBITDA": of any Person for any period, net income for such
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period, plus (i) Interest Expense to the extent deducted in determining
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such net income, plus (ii) depreciation, amortization and all other
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non-cash charges deducted in determining such net income, all determined
in accordance with GAAP consistently applied, minus (iii) extraordinary
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income (including, for purposes hereof, gain from the sale of assets in
the
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ordinary course of business, such as obsolete equipment), plus (iv)
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extraordinary expenses (including, for purposes hereof, loss from the
sale of the assets in the ordinary course of business, such as obsolete
equipment), plus (v) income taxes to the extent deducted to determine
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net income plus or minus (vi) the adjustments described on Schedule 1.1A
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for the 12-month period through the Closing Date plus the allowances
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described on Schedule 1.1B for the periods after the Closing Date.
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"Environmental Laws": any and all applicable foreign, Federal,
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state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority
or other Requirement of Law (including common law) regulating, relating
to or imposing liability or standards of conduct concerning protection
of human health or the environment, as now or may at any time be in
effect during the term of this Agreement.
"Equity Issuance" means any issuance by the Borrower to any
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Person which is not a Credit Party of (a) any shares of its Capital
Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity.
"ERISA": the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"Eurodollar Reserve Percentage": for any day, the percentage
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(expressed as a decimal and rounded upwards, if necessary, to the next
higher 1/100th of 1%) which is in effect for such day as prescribed by
the Federal Reserve Board (or any successor) for determining the maximum
reserve requirement (including without limitation any basic,
supplemental or emergency reserves) in respect of Eurocurrency
liabilities, as defined in Regulation D of such Board as in effect from
time to time, or any similar category of liabilities for a member bank
of the Federal Reserve System in New York City.
"Event of Default": any of the events specified in Section 7;
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provided, however, that any requirement for the giving of notice or the
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lapse of time, or both, or any other condition, has been satisfied.
"Federal Funds Effective Rate": as defined in the definition of
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"Base Rate".
"First Union": First Union National Bank, a national banking
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association.
"Fir Tree" means Fir Tree Value Fund L.P., Fir Tree Institutional
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Value Fund L.P. and Fir Tree Value Partners LDC.
"Fixed Charge Coverage Ratio": at the end of any fiscal quarter
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of the Borrower, the ratio of Consolidated Adjusted EBITDA (computed for
the four fiscal quarterly periods then ending) plus Cash Equivalents in
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excess of $1,000,000 owned by the Borrower and the Restricted
Subsidiaries as of the first day of the four fiscal quarterly
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periods then ending to Consolidated Fixed Charges (computed for the four
fiscal quarterly periods then ending and computed after giving effect to
the Interim Adjustments for the calculations occurring on December 31,
1997, March 31, 1998, June 30, 1998 and September 30, 1998).
"GAAP": generally accepted accounting principles in effect in the
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United States of America applied on a consistent basis, subject,
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however, in the case of determination of compliance with the financial
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covenants set out in Section 5.9 to the provisions of Section 1.3.
"Governmental Authority": any nation or government, any state or
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other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing
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person"), any obligation of (a) the guaranteeing person or (b) another
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Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "primary obligations") of
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any other third Person (the "primary obligor") in any manner, whether
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directly or indirectly, including, without limitation, any obligation of
the guaranteeing person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the
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term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The amount
of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of
such Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guarantors": (i) each of the wholly owned Restricted
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Subsidiaries of the Borrower existing as of the Closing Date, (ii) each
of the LLCs and (iii) any Subsidiary of the Borrower or any LLC acquired
or formed to acquire assets in connection with any Permitted
Acquisition.
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"Guaranty": the Guaranty Agreement to be executed and delivered
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by the Guarantors in favor of the Administrative Agent relating to the
Revolving Loans and obligations owing under this Agreement, as amended,
supplemented or otherwise modified from time to time.
"Holdings LLC": T/SF Holdings LLC.
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"Indebtedness": of any Person at any date, (a) all indebtedness
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of such Person for borrowed money or for the deferred purchase price of
property or services (other than trade liabilities and other normal
accrued liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), (b) any other
indebtedness of such Person which is evidenced by a note, bond,
debenture or similar instrument, (c) all obligations of such Person
under Capital Leases, (d) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (e) all
liabilities secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise become liable for
the payment thereof (other than liabilities securing carriers',
warehousemen's, mechanics', repairmen's or other like nonconsensual
statutory Liens arising in the ordinary course of business), (f) all
obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (g) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements (other than supply
agreements and other similar arrangements entered into in the ordinary
course of business), (h) all Guarantee Obligations of such Person, (i)
all obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements, and (j) the maximum amount of all letters of credit
issued for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent not theretofore reimbursed). For
purposes of this Agreement, Indebtedness shall not include any
Indebtedness owing by the Borrower to any of the Guarantors or by any
Guarantor to the Borrower or by any Guarantor to any other Guarantor or
any contingent obligation in respect thereof. It is understood and
agreed that the amount of any Indebtedness described in clause (e) shall
be the lower of the amount of the obligation or the fair market value of
the collateral securing such obligation, and the amount of any
obligation described in clause (i) shall be the termination payments
that would be required to be paid to a counterparty upon early
termination (in accordance with customary industry standards) rather
than any notional amount with regard to which payments may be
calculated.
"Insolvency": with respect to any Multiemployer Plan, the
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condition that such Plan is insolvent within the meaning of such term as
used in Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
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"Intellectual Property": such term as defined in Section 3.13.
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"Interest Coverage Ratio": at the end of any fiscal quarter of
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the Borrower, the ratio of Consolidated Adjusted EBITDA (computed for
the four fiscal quarters then ending) to Consolidated Interest Expense
for the four consecutive quarters ending as of the date of computation
(after giving effect to the Interim Adjustments for the calculations
occurring on December 31, 1997, March 31, 1998, June 30, 1998 and
September 30, 1998).
"Interest Expense": for any Person for any period, the sum of all
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interest expense, including amortization of debt discount and premium
and the interest component under Capital Leases for such Person but
excluding the amortization of debt financing expenses; provided that
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there shall be added to and included in Interest Expense for purposes
hereof the net amount payable (other than amounts payable in respect of
up-front or one-time fees, which shall be excluded from Interest
Expense) by such Person in respect of any Interest Protection Agreement
and Interest Expense shall be reduced by the net amount receivable by
such Person under any Interest Protection Agreement in respect of such
period.
"Interest Payment Date": (a) as to any Base Rate Loan, the last
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Business Day of each March, June, September and December to occur while
such Loan is outstanding, (b) as to any LIBOR Rate Loan having an
Interest Period of three months or less, the last day of such Interest
Period and (c) as to any LIBOR Rate Loan having an Interest Period
longer than three months, each day which is three months after the first
day of such Interest Period and the last day of such Interest Period.
"Interest Period": with respect to any LIBOR Rate Loan,
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(i) initially, the period commencing on the
Borrowing Date or conversion date, as the case may be, with
respect to such LIBOR Rate Loan and ending one, two, three or six
months thereafter, as selected by the Borrower in the notice of
borrowing or notice of conversion given with respect thereto; and
(ii) thereafter, each period commencing on the last
day of the immediately preceding Interest Period applicable to
such LIBOR Rate Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to
the Administrative Agent not less than three Business Days prior
to the last day of the then current Interest Period with respect
thereto;
provided that the foregoing provisions are subject to the following:
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(A) if any Interest Period pertaining to a LIBOR
Rate Loan would otherwise end on a day that is not a Business
Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension
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would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the
immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end
on the last Business Day of the relevant calendar month;
(C) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected a
Base Rate Loan to replace the affected LIBOR Rate Loan as
provided in Section 2.3(b);
(D) any Interest Period in respect of any Revolving
Loan that would otherwise extend beyond the Termination Date
shall end on the Termination Date; and
(E) no more than 6 LIBOR Rate Loans may be in
effect at any time. For purposes hereof, LIBOR Rate Loans with
different Interest Periods shall be considered as separate LIBOR
Rate Loans, even if they shall begin on the same date and have
the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be
combined at the end of existing Interest Periods to constitute a
new LIBOR Rate Loan with a single Interest Period.
"Interest Protection Agreement": any interest rate protection
-----------------------------
agreement or interest rate future, option, cap, collar or other hedging
arrangement.
"Interim Adjustments": for the first four fiscal quarters
-------------------
following the Closing Date, the Fixed Charge Coverage Ratio and the
Interest Coverage Ratio shall be calculated using the adjustments and
assumptions regarding Interest Expense set forth below:
(a) for the partial fiscal quarter ending December
31, 1997 and for the three full fiscal quarters ending March 31,
1998, June 30, 1998 and September 30, 1998, Interest Expense for
the twelve month period for which the Fixed Charged Coverage
Ratio and the Interest Coverage Ratio is being calculated shall
be deemed to be the result obtained by multiplying (i) the actual
Interest Expense for the period from the Closing Date through the
last day of such fiscal quarter times (ii) a ratio equal to (A)
365 divided by (B) the number of days elapsed from the Closing
Date until the last day of such quarter; and
(b) for the fiscal quarter ending December 31, 1998
and each fiscal quarter thereafter, Interest Expense shall be the
actual Interest Expense for the twelve month period ending on
such date.
12
"LIBOR": the arithmetic mean (rounded to the nearest 1/100th of
-----
1%) of the offered rates for deposits in Dollars for a period equal to
the Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 A.M. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period. If, for any reason, such
rate is not available, then "LIBOR" shall mean the rate per annum at
which, as determined by the Administrative Agent, Dollars in the amount
of $5,000,000 are being offered to leading banks at approximately 11:00
A.M. London time, two (2) Business Days prior to the commencement of the
applicable Interest Period for settlement in immediately available funds
by leading banks in the London interbank market for a period equal to
the Interest Period selected.
"LIBOR Lending Office": initially, the office of each Lender
--------------------
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2;
------------
and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the
office of such Lender at which the LIBOR Rate Loans of such Lender are
to be made.
"LIBOR Rate": a rate per annum (rounded upwards, if necessary, to
----------
the next higher 1/100th of 1%) determined by the Administrative Agent
pursuant to the following formula:
LIBOR Rate = LIBOR
-------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan": Revolving Loans the rate of interest
---------------
applicable to which is based on the LIBOR Rate.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
---
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"LLC Preferred Stock": means the preferred stock of Holdings LLC
-------------------
held in its entirety by the Borrower.
"LLCs": Holdings LLC and the Operating LLCs.
----
"Majority Lenders": Lenders holding in the aggregate more than
----------------
50% of the sum of (i) all Revolving Loans then outstanding at such time
and (ii) the aggregate unused Revolving Commitment at such time;
provided, however, that if any Lender shall be a Defaulting Lender at
-------- -------
such time, then there shall be excluded from the determination of
Majority Lenders those Revolving Loans owing to such Defaulting Lender
and such Defaulting Lender's Revolving
13
Commitment, or after termination of the Revolving Commitment, the
principal balance of the Revolving Loans owing to such Defaulting
Lender.
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and the Guarantors taken as a whole, exclusive
of events or occurrences affecting the economy generally, (b) the
ability of the Borrower and the Guarantors to perform their obligations,
when such obligations are required to be performed, under this Agreement
or any of the Revolving Notes or (c) the validity or enforceability of
this Agreement, any of the Revolving Notes or any of the other Credit
Documents or the rights or remedies of the Administrative Agent or the
Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or
regulated as such in or under any Environmental Law, including, without
limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
"Moody's": Xxxxx'x Investors Service, Inc.
-------
"Multiemployer Plan": a Plan which is a multiemployer plan as
------------------
defined in Section 4001(a)(3) of ERISA.
"Net Sales Proceeds": the gross cash proceeds (including cash by
------------------
way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received) received from the sale, lease,
conveyance, disposition or other transfer of assets or from a Recovery
Event (if and to the extent not used to repair or replace the property
which was the subject of the Recovery Event), net of (i) reasonable
transactions costs payable to third parties, (ii) the estimated taxes
payable with respect to such proceeds (based upon the highest marginal
federal and state tax rates), whether payable by the Borrower or a
Guarantor or its stockholders or direct or indirect members (including,
without duplication, withholding taxes), (iii) Indebtedness (other than
Indebtedness of the Lenders pursuant to this Agreement and the other
Credit Documents) which is secured by, or otherwise related to, the
assets which are the subject of such event to the extent such
Indebtedness is paid with a portion of the proceeds therefrom, (iv)
proceeds needed to pay liabilities directly related to the assets which
are the subject of such event to the extent such liabilities are not
assumed by a purchaser of the assets and are paid with a portion of the
proceeds received from the disposition of such assets and (v) other
costs which may occur as a result of, and are reasonably associated
with, discontinuing operations, shut-downs or otherwise resulting from,
the disposition of such assets; provided, however, Net Sales Proceeds
relating to any assets of a Non-Guarantor Restricted Subsidiary or the
stock of a Non-Guarantor Restricted Subsidiary shall be reduced by an
amount equal to such Net Sales Proceeds multiplied by the percentage
ownership interests of any minority stockholder in such Non-Guarantor
Restricted Subsidiary.
14
"Non-Guarantor Restricted Subsidiary": any non-wholly owned
-----------------------------------
Restricted Subsidiary of the Borrower.
"Notice of Account Designation": shall have the meaning assigned
-----------------------------
thereto in Section 2.1(b)(iii).
"Notice of Borrowing": the written notice of borrowing as
-------------------
referenced and defined in Section 2.1(b)(i).
"Notice of Conversion": the written notice of extension or
--------------------
conversion as referenced and defined in Section 2.3.
"Operating LLCs": Galaxy Registration, LLC, Xxxxxx, LLC and GEM
--------------
Gaming, LLC.
"Participant": as defined in subsection 9.6(b).
-----------
"Patents": (i) all letters patent of the United States or any
-------
other country, now existing or hereafter arising, and all improvement
patents, reissues, reexaminations, patents of additions, renewals and
extensions thereof, including, without limitation, any thereof referred
to in Schedule 3.13 to the Credit Agreement, and (ii) all applications
-------------
for letters patent of the United States or any other country, now
existing or hereafter arising, and all provisionals, divisions,
continuations and continuations-in-part and substitutes thereof,
including, without limitation, any thereof referred to in Schedule 3.13
-------------
to the Credit Agreement.
"PBGC": the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" as defined in Section 6.5(b)(ii).
---------------------
"Permitted Investments" means (i) cash and Cash Equivalents, (ii)
---------------------
receivables owing to the Borrower or any of the Restricted Subsidiaries
or any receivables and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms, (iii)
investments in and to the Borrower or any of the Restricted
Subsidiaries; provided, however, the sum of (A) the aggregate amount of
such equity investments made to Non-Guarantor Restricted Subsidiaries
plus (B) the aggregate outstanding amount of Indebtedness incurred by
Non-Guarantor Restricted Subsidiaries pursuant to Section 6.1(c) plus
(C) the aggregate amount of all sales, transfers, leases or other
dispositions of property or assets to Non-Guarantor Restricted
Subsidiaries pursuant to Section 6.5(a)(iii) shall not exceed $5,000,000
at any time, (iv) investments in entities in which there is only an
minority ownership interest position provided the aggregate amount of
such investments shall not exceed $2,000,000 at any time, (v) loans and
advances to officers,
15
directors, employees and Affiliates in an aggregate amount not to exceed
$500,000 at any time outstanding, (v) investments (including debt
obligations, stock, securities or other property) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business, and
(vi) investments, acquisitions or transactions permitted under Section
6.5(b). As used herein, "investment" means all investments, in cash or
by delivery of property made, directly or indirectly in, to or from any
Person, whether by acquisition of shares of capital stock or partnership
interest or other equity interest, property, assets, indebtedness or
other obligations or securities or by loan advance, capital contribution
or otherwise.
"Permitted Liens":
---------------
(i) Liens created by or otherwise existing under or in
connection with this Agreement or the other Credit Documents in
favor of the Lenders;
(ii) Liens in favor of a Lender hereunder as the provider
of interest rate protection relating to the Revolving Loans
hereunder, but only (A) to the extent such Liens secure
obligations under such interest rate protection agreements
permitted under Section 6.1, (B) to the extent such Liens are on
the same collateral as to which the Lenders also have a Lien (or
shall have been offered the opportunity to have a Lien in such
collateral) and (C) if such provider and the Lenders shall share
pari passu in the collateral subject to such Liens;
---- -----
(iii) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of
grace (not to exceed 60 days), if any, related thereto has not
expired or which are being contested in good faith by appropriate
proceedings, provided that adequate reserves with respect thereto
--------
are maintained on the books of the Borrower or any of the
Guarantors, as the case may be, in conformity with GAAP (or, in
the case of the Guarantors with significant operations outside of
the United States of America, generally accepted accounting
principles in effect from time to time in their respective
jurisdictions of incorporation);
(iv) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days
or which are being contested in good faith by appropriate
proceedings;
(v) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements;
16
(vi) deposits to secure the performance of bids, trade
contracts, (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business; and
(vii) Liens in connection with attachments or judgments
(including judgment or appeal bonds), provided that the judgments
secured shall, within 60 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal, or shall
have been discharged within 60 days after the expiration of any
such stay;
(viii) easements, rights-of-way, restrictions (including
zoning restrictions), minor defects or irregularities in title
and other similar charges or encumbrances not, in any material
respect, impairing the use of the encumbered property for its
intended purpose;
(ix) leases or subleases of real property granted to
others not interfering in any material respect with the business
of the Borrower or any of the Guarantors;
(x) purchase money Liens securing purchase money
indebtedness (and refinancing thereof) to the extent such
indebtedness is permitted under Section 6.1(f);
(xi) Liens on Unrestricted Margin Stock;
(xii) 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; provided that such
--------
extension, renewal or replacement Lien shall be limited to all or
a part of the property which secured the Lien so extended,
renewed or replaced (plus improvements on such property).
"Person": an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"Plan": at any particular time, any employee benefit plan which
----
is covered by Title IV of ERISA and in respect of which the Borrower or
a Commonly Controlled Entity is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"Pledge Agreements": (i) the Pledge Agreement(s) to be executed
-----------------
and delivered by VS&A-T/SF and FirTree as pledgors, pledging all of the
capital stock of the Borrower now or hereafter owned by such pledgors,
as such Pledge Agreement(s) are amended, supplemented or otherwise
modified from time to time, (ii) the Pledge Agreement(s) to be executed
and delivered by VS&A-T/SF and FirTree as pledgors, pledging 100% of the
17
common interests of Holdings LLC, as such Pledge Agreement(s) are
amended, supplemented or otherwise modified from time to time, (iii) the
Pledge Agreement to be executed and delivered by the Borrower as
pledgor, pledging the LLC Preferred Stock and all of the capital stock
of each of the Subsidiaries of the Borrower now or hereafter owned by
the Borrower, as such Pledge Agreement is amended, supplemented or
otherwise modified from time to time, and (iv) the Pledge Agreement to
be executed and delivered by Holdings LLC as pledgor, pledging 100% of
the interests of each of the Subsidiaries of Holdings LLC, as such
Pledge Agreement is amended, supplemented or otherwise modified from
time to time.
"Prime Rate": as defined in the definition of Base Rate.
----------
"Properties": as defined in subsection 3.10(a).
----------
"Purchase Agreement": means that certain Stock Purchase
------------------
Agreement, dated August 15, 1997, by and among VS&A Communications
Partners II, L.P., VS&A-T/SF and the Borrower.
"Purchasing Lenders": as defined in subsection 9.6(c).
------------------
"Recovery Event": the receipt by the Borrower or any of the
--------------
Guarantors of any cash insurance proceeds or condemnation award payable
by reason of theft, loss, physical destruction or damage, taking or
similar event with respect to any property or assets of the Borrower or
any of the Guarantors.
"Register": as defined in subsection 9.6(d).
-------
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
----------------
4043(b) of ERISA, other than those events as to which the thirty-day
notice period is waived under subsections .11, .12, .13, .14, .16, .18,
.19 or .20 of PBGC Reg. ss.4043.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-Laws, partnership agreement, operating agreement or
other organizational or governing documents of such Person, and each
law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person
or any of its material property is subject.
"Restricted Payment": (i) any payment by the Borrower or any of
------------------
the Restricted Subsidiaries of a payment, distribution or dividend
(other than a dividend or distribution payable solely in stock or equity
interest of the Borrower) on, or any payment on account
18
of the purchase, redemption, defeasance or retirement of, or any other
distribution on, any partnership interest, limited liability company
interest, share of any class of stock or other ownership interest in the
Borrower or any of the Restricted Subsidiaries (including any such
payment or distribution in cash or in property or obligations of a
Borrower or any of the Restricted Subsidiaries), (ii) any loan or
advance by the Borrower or any of the Restricted Subsidiaries to any
Affiliate of the Borrower or any of the Restricted Subsidiaries other
than as permitted by Sections 6.6 or 6.7, or (iii) the payment by the
Borrower or any of the Restricted Subsidiaries of any management or
administrative fee to any Affiliate of the Borrower or any of the
Restricted Subsidiaries or of any salary, bonus or other form of
compensation other than in the ordinary course of business to any Person
who is a significant partner, shareholder, member, owner or executive
officer of any such Affiliate other than as permitted by Section 6.7.
The transactions contemplated by the Merger (as defined in the Purchase
Agreement) or the Stock Split (as defined in the Purchase Agreement)
shall not constitute Restricted Payments.
"Restricted Subsidiaries": all Subsidiaries of the Borrower other
-----------------------
than Unrestricted Subsidiaries. "Restricted Subsidiaries" includes the
-----------------------
LLCs.
"Revolving Commitment": as to any Lender, the obligation of such
--------------------
Lender to make Revolving Loans to the Borrower hereunder in an aggregate
principal amount at any one time outstanding not to exceed the amount
set forth opposite such Lender's name on Schedule 2.1, as such amount
------------
may be reduced from time to time in accordance with the provisions of
this Agreement.
"Revolving Commitment Percentage": for each Lender, a fraction
-------------------------------
(expressed as a percentage) the numerator of which is the Revolving
Commitment of such Lender at such time and the denominator of which is
the aggregate Revolving Commitment at such time. The initial Revolving
Commitment Percentages are set out on Schedule 2.1.
------------
"Revolving Committed Amount": collectively, the aggregate amount
--------------------------
of all of the Revolving Commitments as referenced in Section 2.1(a) and,
individually, the amount of each Lender's Revolving Commitment as
specified in Schedule 2.1.
------------
"Revolving Loans": as defined in Section 2.1.
---------------
"Revolving Note" or "Revolving Notes": the promissory notes of
-------------- ---------------
the Borrower in favor of each of the Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1(e), individually or collectively,
as appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"S&P": Standard & Poor's Ratings Group, a division of McGraw
---
Hill, Inc.
"Security Agreement: the Security Agreement to be executed and
------------------
delivered on behalf of the Borrower and the Guarantors by authorized
signatories, as amended, supplemented or otherwise modified from time to
time.
19
"Security Documents": collectively, the Security Agreement, the
------------------
Pledge Agreements and all other security documents hereafter delivered
to the Administrative Agent granting a Lien on any asset or assets of
any Person to secure the obligations and obligations of the Borrower and
the Guarantors hereunder and under any of the other Credit Documents,
including UCC financing statements and other similar instruments.
"Senior Funded Debt": Total Funded Debt less Subordinated Debt.
------------------
"Senior Leverage Ratio": at any time, the ratio of Consolidated
---------------------
Senior Funded Debt at such time less Cash Equivalents in excess of
$1,000,000 owned by the Borrower and the Restricted Subsidiaries as of
the first day of the twelve month period then ending to Consolidated
Adjusted EBITDA for the twelve month period then ending.
"Single Employer Plan": any Plan which is not a Multi-Employer
--------------------
Plan.
"Specified Sales" means (i) the sale, transfer, lease or other
---------------
disposition of inventory and materials in the ordinary course of
business, (ii) the sale, transfer, lease or other disposition of
machinery, parts and equipment in the ordinary course of business, (iii)
the sale, transfer or other disposition of Permitted Investments, (iv)
the sale, transfer or other disposition of articles in the ordinary
course of business or the granting of permission for reprints in the
ordinary course of business and (v) the sale, lease or disposition of
space and related property and assets in the ordinary course of
business.
"Subordinated Debt": means the indebtedness of up to $100,000,000
-----------------
which is on terms satisfactory to the Agent and which has been
subordinated to the repayment of the indebtedness hereunder on terms
satisfactory to the Agent.
"Subordinated Debt Documents": means any and all documents now or
---------------------------
hereafter executed in connection with the Subordinated Debt.
"Subsidiary": as to any Person, a corporation, partnership or
----------
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, the LLCs shall be Subsidiaries of
the Borrower and all references to a "Subsidiary" or to "Subsidiaries"
in this Agreement shall refer to a Subsidiary or Subsidiaries of the
Borrower.
"Taxes": as defined in subsection 2.15.
-----
20
"Termination Date": the earlier of (a) September 30, 2004 or (b)
----------------
the date on which the Revolving Commitments shall terminate in
accordance with the provisions of this Agreement.
"Total Funded Debt": of any Person at any date, (a) all
-----------------
indebtedness of such Person for borrowed money, (b) all obligations of
such Person under Capital Leases, (c) all Guarantee Obligations of such
Person, and (d) the maximum amount of all letters of credit issued or
bankers' acceptances created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent not theretofore
reimbursed).
"Total Leverage Ratio": at any time, the ratio of Consolidated
--------------------
Total Funded Debt at such time less Cash Equivalents in excess of
$1,000,000 owned by the Borrower and the Restricted Subsidiaries as of
the first day of the twelve month period then ending to Consolidated
Adjusted EBITDA for the twelve month period then ending.
"Trademarks": (i) all trademarks, trade names, corporate names,
----------
company names, business names, fictitious business names, service marks,
logos and other source or business identifiers, together with the
goodwill of the business symbolized by said marks, names, logos and
identifiers now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any State thereof
or any other country or any political subdivision thereof, or otherwise,
including, without limitation, any thereof referred to in Schedule 3.13
-------------
to the Credit Agreement, and (ii) all renewals thereof including,
without limitation, any thereof referred to in Schedule 3.13 to the
-------------
Credit Agreement.
"Tranche": the collective reference to LIBOR Rate Loans whose
-------
Interest Periods begin and end on the same day. A Tranche may sometimes
be referred to as a "Eurodollar Tranche".
"Transfer Effective Date": as defined in each Commitment Transfer
-----------------------
Supplement.
"2.15 Certificate": as defined in Section 2.15.
----------------
"Type": as to any Loan, its nature as a Base Rate Loan or LIBOR
----
Rate Loan, as the case may be.
"Unrestricted Margin Stock": means the capital stock of the
-------------------------
Borrower which has been repurchased by the Borrower as of the Closing
Date which constitutes "margin stock" (as defined in Regulation U of the
Board of Governors of the Federal Reserve System as from time to time in
effect), if, and to the extent that the value of such margin stock
exceeds 25% of the total assets of the Borrower and the Guarantors and
their respective Subsidiaries; provided that it is understood that upon
completion of the Merger (as defined in the Purchase Agreement) or the
Stock Split (as defined in the Purchase Agreement) there shall be no
Unrestricted Margin Stock outstanding.
21
"Unrestricted Subsidiaries": the Subsidiaries of the Borrower set
-------------------------
forth in Schedule 1.1C.
"VSA-T/SF": VS&A-T/SF, Inc., a Delaware corporation, prior to the
--------
Merger (as defined in the Purchase Agreement), and VS&A-T/SF LLC
thereafter.
1.2 Other Definitional Provisions.
-----------------------------
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the Notes or
other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
Section, subsection, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
1.3 Accounting Terms. Unless otherwise specified herein, all accounting
----------------
terms used herein shall be interpreted, all accounting determinations hereunder
shall be made, and all financial statements required to be delivered hereunder
shall be prepared in accordance with GAAP applied on a basis consistent (except
for changes concurred in by the Borrower's independent public accountants) with
the most recent reviewed or audited (as the case may be) financial statements of
the Borrower delivered to the Lenders; provided that, if the Borrower notifies
--------
the Administrative Agent that it wishes to amend any covenant in Section 5.9 to
eliminate the effect of any change in GAAP on the operation of such covenant (or
if the Administrative Agent notifies the Borrower that the Majority Lenders wish
to amend Section 5.9 for such purpose), then the Borrower's compliance with such
covenant 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 covenant is amended in a manner satisfactory to the Borrower
and the Majority Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
22
SECTION 2. THE LOANS; AMOUNT AND TERMS
2.1 Revolving Loans.
---------------
(a) Revolving Commitment. During the Commitment Period, subject
--------------------
to the terms and conditions hereof, each Lender severally agrees to make
revolving credit loans ("Revolving Loans") to the Borrower from time to
---------------
time for the purposes hereinafter set forth; provided, however, that (i)
--------- -------
with regard to each Lender individually, such Lender's share of
outstanding Revolving Loans shall not exceed such Lender's Revolving
Committed Amount, and (ii) with regard to the Lenders collectively, the
sum of the aggregate amount of outstanding Revolving Loans shall not
exceed TWENTY FIVE MILLION DOLLARS ($25,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided herein, the
"Revolving Committed Amount"). Revolving Loans may consist of Base Rate
--------------------------
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the
provisions hereof. LIBOR Rate Loans shall be made by each Lender at its
LIBOR Lending Office and Base Rate Loans at its Domestic Lending Office.
(b) Revolving Loan Borrowings.
-------------------------
(i) Notice of Borrowing. The Borrower shall request
-------------------
a Revolving Loan borrowing by written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax)
to the Administrative Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day prior to the date of
requested borrowing in the case of Base Rate Loans, and on the
third Business Day prior to the date of the requested borrowing
in the case of LIBOR Rate Loans. Each such request for borrowing
shall be irrevocable and shall specify (A) that a Revolving Loan
is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to
be borrowed, and (D) whether the borrowing shall be comprised of
Base Rate Loans, LIBOR Rate Loans or a combination thereof, and
if LIBOR Rate Loans are requested, the Interest Period(s)
therefor. A form of Notice of Borrowing (a "Notice of Borrowing")
-------------------
is attached as Schedule 2.1(b)(i). If the Borrower shall fail to
------------------
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a LIBOR Rate Loan, then such
notice shall be deemed to be a request for an Interest Period of
one month, or (II) the type of Revolving Loan requested, then
such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Administrative Agent shall give notice to each
Lender promptly upon receipt of each Notice of Borrowing, the
contents thereof and each such Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing
---------------
shall be in a minimum aggregate amount of $1,000,000, in the case
of Base Rate Loans, and integral multiples of $100,000 in excess
thereof, and $1,000,000, in the case of
23
LIBOR Rate Loans and integral multiples of $100,000 in excess
thereof (or the remaining amount of the Revolving Commitment, if
less).
(iii) Advances. Each Lender will make its Revolving
--------
Commitment Percentage of each Revolving Loan borrowing available
to the Administrative Agent for the account of the Borrower at
the office of the Administrative Agent specified in Schedule 9.2,
-------------
or at such other office as the Administrative Agent may designate
in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in Dollars
and in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower on
the books of such office with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent. The Borrower
hereby irrevocably authorizes the Administrative Agent to
disburse the proceeds of each Borrowing requested pursuant to
this Section 2.1 in immediately available funds by crediting such
proceeds to a deposit account of the Borrower maintained with the
Administrative Agent or by wire transfer to any other account of
the Borrower in each such case as may be specified by the
Borrower from time to time in a written notice in the form
attached hereto as Schedule 2.1(b)(iii) (a "Notice of Account
Designation"). Unless otherwise specified by the Borrower, the
Notice of Account Designation most recently provided to the
Administrative Agent shall control.
(c) Repayment. The principal amount of all Revolving Loans shall
---------
be due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 2.5, Revolving
--------
Loans shall bear interest as follows:
(i) Base Rate Loans. During such periods as
---------------
Revolving Loans shall be comprised of Base Rate Loans, each such
Base Rate Loan shall bear interest at a per annum rate equal to
the sum of the Base Rate plus the Applicable Interest Rate
----
Percentage; and
(ii) LIBOR Rate Loans. During such periods as Revolving Loans
----------------
shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the
LIBOR Rate plus the Applicable Interest Rate Percentage.
----
Interest on Revolving Loans shall be payable in arrears on each Interest
Payment Date.
(e) Revolving Notes. The Revolving Loans shall be evidenced by a
---------------
duly executed promissory note of the Borrower to each Lender in
substantially the form of Schedule 2.1(e). Each Lender is hereby
---------------
authorized to record the date, Type and amount
24
of each Revolving Loan made by such Lender, each continuation thereof,
each conversion of all or a portion thereof to another Type, the date
and amount of each payment or prepayment of principal thereof and, in
the case of LIBOR Rate Loans, the length of each Interest Period with
respect thereto, on the schedule annexed to and constituting a part of
its Revolving Note, and any such recordation shall constitute prima
-----
facie evidence of the accuracy of the information so recorded; provided
----- --------
that neither the failure to make, nor any error in the making of, any
such recordation shall limit or otherwise affect the obligation of the
Borrower hereunder or under such Revolving Note with respect to any
Revolving Loan and payments of principal or interest on such Revolving
Note. Each Revolving Note shall be dated the Closing Date and provide
for the payment of interest in accordance with subsection 2.1(d).
2.2 [Intentionally left blank]
2.3 Conversion Options.
------------------
(a) The Borrower may elect from time to time to convert Base Rate
Loans to LIBOR Rate Loans, by giving the Administrative Agent at least
three Business Days' prior irrevocable written notice of such election
and elect from time to time to convert LIBOR Rate Loans to Base Rate
Loans, by giving the Administrative Agent at least one Business Day's
prior irrevocable written notice of such election. A form of Notice of
Conversion is attached as Schedule 2.3. If the date upon which a Base
------------
Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day,
then such conversion shall be made on the next succeeding Business Day
and during the period from such last day of an Interest Period to such
succeeding Business Day such Revolving Loan shall bear interest as if it
were a Base Rate Loan. All or any part of outstanding LIBOR Rate Loans
and Base Rate Loans may be converted as provided herein, provided that
--------
(i) a Revolving Loan may be converted into a LIBOR Rate Loan only if no
Event of Default has occurred and is continuing, (ii) partial
conversions into a LIBOR Rate Loan shall be in an aggregate principal
amount of $1,000,000 or a whole multiple of $100,000 in excess thereof
and (iii) partial conversions into a Base Rate Loan shall be in an
aggregate principal amount of $1,000,000 or a whole multiple of $100,000
in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the Borrower with the notice provisions contained in subsection 2.3(a);
provided, that a LIBOR Rate Loan may be continued as such only if no
--------
Event of Default has occurred and is continuing, in which case such Loan
shall be automatically converted to a Base Rate Loan at the end of the
applicable Interest Period with respect thereto. Where the Borrower
shall fail to give timely notice of an election to continue a LIBOR Rate
Loan, or where continuation of LIBOR Rate Loans is not permitted
hereunder, such LIBOR Rate Loans shall be automatically converted to
Base Rate Loans at the end of the applicable Interest Period with
respect thereto.
25
2.4 Minimum Principal Amount of Tranches. All borrowings, payments and
------------------------------------
prepayments in respect of Revolving Loans shall be in such amounts and be made
pursuant to such elections so that after giving effect thereto the aggregate
principal amount of the Revolving Loans comprising any Tranche shall not be less
than $1,000,000, in the case of Base Rate Loans, and integral multiples in
excess of $500,000 in excess thereof, and $1,000,000, in the case of LIBOR Rate
Loans, and integral multiples of $100,000 in excess thereof.
2.5 Default Rate and Payment Dates.
------------------------------
(a) If all or a portion of the principal amount of any Revolving
Loan which is a LIBOR Rate Loan shall not be paid when due or continued
as a LIBOR Rate Loan in accordance with the provisions of Section 2.3
(whether at the stated maturity, by acceleration or otherwise), such
overdue principal amount of such Revolving Loan shall be converted to a
Base Rate Loan at the end of the Interest Period applicable thereto.
(b) If all or a portion of (i) the principal amount of any
Revolving Loan, (ii) any interest payable thereon or (iii) any fee or
other amount payable hereunder shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount
shall bear interest at a rate per annum which is in the case of overdue
principal, the rate that would otherwise be applicable thereto plus 2%
or in the case of overdue interest, fees or other amounts, the Base Rate
plus 2%, in each case from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
(c) Interest on each Revolving Loan shall be payable in arrears
on each Interest Payment Date, provided that interest accruing pursuant
to paragraph (b) of this subsection shall be payable from time to time
on demand.
2.6 Reductions in Revolving Commitments and Prepayments.
---------------------------------------------------
(a) Voluntary Reduction in Revolving Commitments. The Borrower
--------------------------------------------
may from time to time permanently reduce the aggregate amount of the
Revolving Commitments in whole or in part without premium or penalty
except as provided in Section 2.14 upon three (3) Business Days' prior
written notice to the Administrative Agent; provided that after giving
--------
effect to any such voluntary reduction the Revolving Loans then
outstanding shall not exceed the Aggregate Revolving Committed Amount,
as reduced. Partial reductions in the aggregate Revolving Commitment
shall in each case be in a minimum aggregate amount of $1,000,000 and
integral multiples of $500,000 in excess thereof.
(b) Mandatory Reductions in Revolving Commitments and Mandatory
-----------------------------------------------------------
Prepayments.
-----------
(i) Net Sales Proceeds. The Borrower shall make a
------------------
prepayment of the Revolving Loans in an amount equal to the Net
Sales Proceeds from Asset Dispositions in excess of $1,000,000
which are not reinvested by the Borrower
26
and the Restricted Subsidiaries in businesses permitted to be
engaged in by the Borrower and the Restricted Subsidiaries
pursuant to Section 6.4 within 270 days after the applicable date
of disposition. Any such required prepayment of Net Sales
Proceeds shall be made on the date 270 days from the date of the
applicable Asset Disposition and shall be applied to the
outstanding principal balance of the Revolving Loans.
(ii) Debt Issuances; Equity Issuances. Immediately upon
--------------------------------
receipt by the Borrower of cash proceeds from any Debt Issuance
(other than any Debt Issuance relating to Indebtedness permitted
by Section 6.1) or Equity Issuance, the Borrower shall make a
prepayment of the Revolving Loans in an amount equal to such
proceeds.
(iii) Mandatory Prepayment on Revolving Loans. If at any
---------------------------------------
time the aggregate amount of Revolving Loans then outstanding
shall exceed the Aggregate Revolving Committed Amount, as reduced
from time to time, the Borrower shall immediately make payment on
the Revolving Loans in an amount sufficient to eliminate the
deficiency. Any such payments shall be applied first to Base Rate
Loans and then to LIBOR Rate Loans in direct order of their
Interest Period maturities.
(c) Voluntary Prepayments. Revolving Loans may be prepaid in
---------------------
whole or in part without premium or penalty; provided that (i) LIBOR
--------
Rate Loans may be prepaid other than at the end of the Interest Period
applicable thereto only upon payment of amounts owing under Section 2.14
and only then on three (3) Business Days' prior written notice to the
Administrative Agent, (ii) Base Rate Loans may be prepaid on one (1)
Business Day's prior written notice to the Administrative Agent if such
notice is received by 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day prior to the date of prepayment, and (iii) each such
partial prepayment shall be in a minimum aggregate principal amount of
$1,000,000, in the case of Base Rate Loans, and integral multiples of
$100,000 in excess thereof, and $1,000,000, in the case of LIBOR Rate
Loans, and integral multiples of $100,000 in excess thereof. Amounts
prepaid on the Revolving Loans may be reborrowed in accordance with the
provisions hereof.
(d) Notice. The Borrower will provide notice to the
------
Administrative Agent of any prepayment by 11:00 A.M. (Charlotte, North
Carolina time) one or three Business Days prior to the date of
prepayment as specified herein.
2.7 Commitment Fee. In consideration of the Revolving Commitments, the
--------------
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Lenders a commitment fee (the "Commitment Fee") for each calendar quarter
--------------
(or portion thereof) during the Commitment Period, computed at the rate of .50%
per annum on the average daily amount by which the Aggregate Revolving Committed
Amount exceeds the aggregate principal amount of Revolving Loans outstanding
(for the subject calendar quarter). The Commitment Fee shall be
27
payable quarterly in arrears on the last Business Day of each March, June,
September and December (commencing December 31, 1997) and on the Termination
Date.
2.8 Computation of Interest and Fees.
--------------------------------
(a) Interest payable hereunder with respect to LIBOR Rate Loans
shall be calculated on the basis of a year of 360 days for the actual
days elapsed. All other fees, interest and all other amounts payable
hereunder shall be calculated on the basis of a 365/6 day year for the
actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of
a LIBOR Rate on the Business Day of the determination thereof. Any
change in the interest rate on a Revolving Loan resulting from a change
in the Base Rate shall become effective as of the opening of business on
the day on which such change in the Base Rate shall become effective.
The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of the effective date and the amount of each
such change.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive
and binding on the Borrower and the Lenders in the absence of manifest
error.
2.9 Pro Rata Treatment and Payments. Each borrowing of Revolving Loans
-------------------------------
and any reduction of the Revolving Commitments shall be made pro rata according
to the respective Revolving Commitment Percentages of the Lenders. Each payment
under this Agreement or any Revolving Note shall be applied, first, in the case
of a payment on the Revolving Notes (or in respect of the Revolving Loans), to
any fees then due and owing by the Borrower pursuant to subsection 2.7, second,
to interest then due and owing in respect of the Revolving Notes of the Borrower
and, third, to principal then due and owing hereunder and under the Revolving
Notes of the Borrower. Except as otherwise provided herein, each payment on
account of any fees pursuant to subsection 2.7 shall be made pro rata to the
Lenders in accordance with the respective amounts due and owing. Each payment by
the Borrower on account of principal of and interest on the Revolving Loans
shall be made pro rata according to the respective amounts due and owing. Each
prepayment on account of principal of the Revolving Loans shall be applied to
such of the Revolving Loans as the Borrower may designate (to be applied pro
rata among the Lenders); provided, that prepayments made pursuant to subsection
--------
2.10(a) or 2.12 shall be applied in accordance with such subsection. All
payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in subsection 2.15(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent's office specified in Schedule 9.2 in Dollars and in immediately available
------------
funds. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a LIBOR Rate Loan becomes due and payable on a day other than a
Business Day, the maturity thereof
28
shall be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day.
2.10 Non-Receipt of Funds by the Administrative Agent.
------------------------------------------------
(a) Unless the Administrative Agent shall have been notified by a
Lender prior to the date a Revolving Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Revolving Loan available to the
Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on
such date, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the Borrower
a corresponding amount. If such amount is made available to the
Administrative Agent on a date after such Borrowing Date, such Lender
shall pay to the Administrative Agent on demand an amount equal to the
product of (i) the daily average Federal Funds Effective Rate during
such period, times (ii) the amount of such Lender's Revolving Commitment
Percentage of such borrowing, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such
Borrowing Date to the date on which such Lender's Revolving Commitment
Percentage of such borrowing shall have become immediately available to
the Administrative Agent and the denominator of which is 360. If such
Lender's Revolving Commitment Percentage is not in fact made available
to the Administrative Agent by such Lender within two (2) Business Days
of such Borrowing Date, the Administrative Agent shall be entitled to
recover such amount with interest thereon at the rate per annum
applicable to Base Rate Loans hereunder, on demand, from the Borrower.
(b) Unless the Administrative Agent shall have been notified by
the Borrower, prior to the date on which any payment is due from it
hereunder (which notice shall be effective upon receipt) that the
Borrower does not intend to make such payment, the Administrative Agent
may assume that the Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not
be required to) make available to each Lender on such payment date an
amount equal to the portion of such assumed payment to which such Lender
is entitled hereunder, and if the Borrower has not in fact made such
payment to the Administrative Agent, such Lender shall, on demand, repay
to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the
date such amount was made available to such Lender, such Lender shall
pay to the Administrative Agent on demand an amount equal to the product
of (i) the daily average Federal Funds Effective Rate during such
period, times (ii) the amount made available to such Lender by the
Administrative Agent pursuant to this paragraph (b), times (iii) a
fraction, the numerator of which is the number of days that elapse from
and including the date on which such amount was made available to such
Lender to the date on which such amount shall have been repaid to the
Administrative Agent by such Lender and become immediately available to
the Administrative Agent and the denominator of which is 360.
29
(c) A certificate of the Administrative Agent submitted to the
Borrower or any Lender with respect to any amount owing under this
subsection shall be conclusive in the absence of manifest error.
2.11 Inability to Determine Interest Rate. Notwithstanding any other
------------------------------------
provision of this Agreement, if (i) the Administrative Agent shall reasonably
determine (which determination shall be conclusive and binding absent manifest
error) that, by reason of circumstances affecting the relevant market,
reasonable and adequate means do not exist for ascertaining LIBOR for such
Interest Period, or (ii) the Majority Lenders shall reasonably determine (which
determination shall be conclusive and binding absent manifest error) that the
LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of
funding LIBOR Rate Loans that the Borrower has requested be outstanding as a
Eurodollar Tranche during such Interest Period, the Administrative Agent shall
forthwith give telephone notice of such determination, confirmed in writing, to
the Borrower, and the Lenders at least two Business Days prior to the first day
of such Interest Period. Unless the Borrower shall have notified the
Administrative Agent upon receipt of such telephone notice that it wishes to
rescind or modify its request regarding such LIBOR Rate Loans, any Loans that
were requested to be made as LIBOR Rate Loans shall be made as Base Rate Loans
and any Revolving Loans that were requested to be converted into or continued as
LIBOR Rate Loans shall be converted into Base Rate Loans. Until any such notice
has been withdrawn by the Administrative Agent, no further Revolving Loans shall
be made as, continued as, or converted into, LIBOR Rate Loans for the Interest
Periods so affected.
2.12 Illegality. Notwithstanding any other provision of this Agreement,
----------
if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof, in each case occurring after the Closing
Date, by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender's
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period as
required by law to Base Rate Loans. The Borrower hereby agrees promptly to pay
any Lender, upon its demand, any additional amounts necessary to compensate such
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by such Lender in making any repayment in accordance with
this subsection including, but not limited to, any interest or fees payable by
such Lender to lenders of funds obtained by it in order to make or maintain its
LIBOR Rate Loans hereunder. A certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender, through the Administrative
Agent, to the Borrower shall be conclusive in the absence of manifest error.
Each Lender agrees to use reasonable efforts (including reasonable efforts to
change its LIBOR Lending Office) to avoid or to minimize any amounts which may
otherwise be payable pursuant to this subsection; provided, however, that
-------- -------
30
such efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender to be material.
2.13 Requirements of Law.
-------------------
(a) If the adoption of or any change in any Requirement of Law or
in the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law)
from any central bank or other Governmental Authority, in each case made
subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any LIBOR Rate Loan made by it, or
change the basis of taxation of payments to such Lender in
respect thereof (except for taxes covered by subsection 2.15
(including any taxes imposed by reason of any failure of such
Lender to comply with its obligations under subsection 2.15(b)),
or changes in the rate of tax on the net income, or franchise
tax, of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or
any other acquisition of funds by, any office of such Lender
which is not otherwise included in the determination of the LIBOR
Rate hereunder; or
(iii) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Loans or to reduce any amount
receivable hereunder or under any Revolving Note, then, in any such
case, the Borrower shall promptly pay such Lender, within 15 days after
its demand, any additional amounts necessary to compensate such Lender
for such additional cost or reduced amount receivable which such Lender
reasonably deems to be material as determined by such Lender with
respect to its LIBOR Rate Loans. A certificate as to any additional
amounts payable pursuant to this subsection submitted by such Lender,
through the Administrative Agent, describing in reasonable detail the
nature of such event and a reasonably detailed explanation of the
calculation thereof, to the Borrower shall be conclusive in the absence
of manifest error. Each Lender agrees to use reasonable efforts
(including reasonable efforts to change its Domestic Lending Office or
LIBOR Lending Office, as the case may be) to avoid or to minimize any
amounts which might otherwise be payable pursuant to this paragraph of
this subsection; provided, however, that such efforts shall not cause
--------- -------
the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or
31
application thereof as a consequence of its obligations hereunder or
compliance by such Lender or any corporation controlling such Lender
with any request or directive regarding capital adequacy (whether or not
having the force of law) from any central bank or Governmental Authority
made subsequent to the date hereof as a consequence of its obligations
hereunder does or shall have the effect of reducing the rate of return
on such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount
reasonably deemed by such Lender to be material, then from time to time,
within 15 days after demand by such Lender, the Borrower shall pay to
such Lender such additional amount as shall be certified by such Lender
as being required to compensate it for such reduction. Such a
certificate as to any additional amounts payable under this subsection
submitted by a Lender (which certificate shall include a description in
reasonable detail of the basis for the computation), through the
Administrative Agent, to the Borrower shall be conclusive absent
manifest error.
(c) Notwithstanding anything to the contrary contained herein,
the Borrower shall not have any obligation to pay to any Lender amounts
owing under this subsection 2.13 for any period which is more than 180
days prior to the date (but not in any event prior to the Closing Date)
upon which the request for payment therefor is delivered to the
Borrower.
(d) The agreements in this subsection shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
2.14 Indemnity. The Borrower hereby agrees to indemnify each Lender and
---------
to hold such Lender harmless from any funding loss or expense which such Lender
may sustain or incur (other than as a result of such Lender's gross negligence
or willful misconduct) as a consequence of (a) default by the Borrower in
payment of the principal amount of or interest on any LIBOR Rate Loan by such
Lender in accordance with the terms hereof, (b) default by the Borrower in
accepting a LIBOR Rate Loan after the Borrower has given a notice in accordance
with the terms hereof, (c) default by the Borrower in making any prepayment of a
LIBOR Rate Loan after the Borrower has given a notice in accordance with the
terms hereof, and/or (d) the making by the Borrower of a prepayment of a LIBOR
Rate Loan, or the conversion thereof, on a day which is not the last day of the
Interest Period with respect thereto, in each case equal to (i) the amount of
interest which would have accrued on the amount so prepaid, or not so paid,
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to pay, borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure), in each case at the applicable rate of interest for such Loans
provided for herein (excluding the Applicable Interest Rate Percentage included
therein), over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. A certificate as to any additional amounts payable pursuant
to
32
this subsection submitted by any Lender, through the Administrative Agent, to
the Borrower (which certificate must be delivered to the Administrative Agent
within thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this subsection
shall survive termination of this Agreement and payment of the Revolving Notes
and all other amounts payable hereunder.
2.15 Taxes.
-----
(a) All payments made by the Borrower hereunder or under any
Revolving Note will be, except as provided in Section 2.15(b), made free
and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any Governmental
Authority or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding (i) any tax imposed
on or measured by the net income or profits of a Lender pursuant to the
laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender
is located or any subdivision thereof or therein and (ii) any franchise
taxes, branch taxes, taxes on doing business or taxes on the overall
capital or net worth of any Lender pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the
principal office or its applicable lending office is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the
-----
Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all
amounts due under this Agreement or under any Note, after withholding or
deduction for or on account of any such Taxes, will not be less than the
amount provided for herein or in such Note. The Borrower will furnish to
the Administrative Agent as soon as practicable after the date the
payment of any Taxes is due pursuant to applicable law certified copies
(to the extent reasonably available and required by law) of tax receipts
evidencing such payment by the Borrower. Except as provided in this
Section 2.l5, the Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the
amount of any Taxes so levied or imposed and paid by such Lender.
(b) Each Lender or Participant that is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) agrees to
deliver to the Borrower and the Administrative Agent on or prior to the
Closing Date, or in the case of a Lender or Participant that is an
assignee or transferee of an interest under this Agreement pursuant to
Section 9.6 (unless the respective Lender or Participant was already a
Lender or Participant hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender,
(i) if the Lender or Participant is a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying such Lender's or Participant's entitlement
to a complete exemption from United States withholding tax with respect
to payments to be made under this Agreement
33
and under any Note, or (ii) if the Lender or Participant is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code, either Internal
Revenue Service Form 1001 or 4224 as set forth in clause (i) above, or
(x) a certificate substantially in the form of Schedule 2.15 (any such
-------------
certificate, a "2.15 Certificate") and (y) two accurate and complete
----------------
original signed copies of Internal Revenue Service Form W-8 (or
successor form) certifying such Lender's or Participant's entitlement to
an exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In
addition, each Lender and Participant agrees that it will deliver upon
the Borrower's request (or upon such Lender's or Participant's becoming
aware that any version is no longer accurate) updated versions of the
foregoing, as applicable, whenever the previous certification has become
obsolete or inaccurate in any material respect, together with such other
forms as may be required in order to confirm or establish the
entitlement of such Lender or Participant to a continued exemption from
or reduction in United States withholding tax with respect to payments
under this Agreement and any Note. Notwithstanding anything to the
contrary contained in Section 2.15(a), but subject to the immediately
succeeding sentence, (x) the Borrower shall be entitled, to the extent
it is required to do so by law, to deduct or withhold Taxes imposed by
the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender or Participant which is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) for U.S. Federal income tax purposes to the extent that such
Lender or Participant has not provided to the Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 2.15(a) hereof to gross-up payments to be made to a
Lender or Participant or otherwise indemnify such Lender or Participant
in respect of Taxes imposed by the United States if (I) such Lender or
Participant has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this
Section 2.15(b) or (II) in the case of a payment, other than interest,
to a Lender or Participant described in clause (ii) above, to the extent
that such Forms do not establish a complete exemption from withholding
of such Taxes. Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 2.15 but subject in any
event to clause (y)(I) in the immediately preceding sentence, the
Borrower agrees to pay additional amounts and to indemnify each Lender
in the manner set forth in Section 2.15(a) (without regard to the
identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by them as described in the
immediately preceding sentence as a result of any changes after the
Closing Date (or, in the case of an assignee or transferee, after the
date such assignee or transferee became a Lender or Participant
hereunder) in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the
deducting or withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR
Lending Office, as the case may be) to avoid or to minimize any amounts
which might otherwise be payable pursuant to this subsection; provided,
--------
however, that such efforts shall not cause the imposition on such
-------
34
Lender of any additional costs or legal or regulatory burdens deemed by
such Lender to be material unless in the case of costs the Borrower has
agreed to reimburse such Lender for such costs.
(d) If the Borrower pays any additional amount pursuant to this
subsection 2.15 with respect to a Lender or Participant, such Lender or
Participant shall use reasonable efforts to obtain a refund of tax or
credit against its tax liabilities on account of such payment; provided
--------
that such Lender or Participant shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit
position or (ii) it believes in good faith, in its sole discretion, that
claiming a refund or credit would cause adverse tax consequences to it.
In the event that such Lender or Participant receives such a refund or
credit, such Lender or Participant shall pay to the Borrower an amount
that such Lender reasonably determines is equal to the net tax benefit
obtained by such Lender or Participant as a result of such payment by
the Borrower. In the event that no refund or credit is obtained with
respect to the Borrower's payments to such Lender pursuant to this
subsection 2.15, then such Lender or Participant shall upon request
provide a certification that such Lender or Participant has not received
a refund or credit for such payments. Nothing contained in this
subsection 2.15 shall require a Lender or Participant to disclose or
detail the basis of its calculation of the amount of any tax benefit or
any other amount or the basis of its determination referred to in the
proviso to the first sentence of this subsection 2.15 to the Borrower or
any other party.
(e) The agreements in this subsection shall survive the
termination of this Agreement and the payment of the Revolving Notes and
all other amounts payable hereunder.
2.16 Replacement of Agent. If any Lender becomes a Defaulting Lender, if
--------------------
any Lender delivers a notice pursuant to Section 2.12, 2.13 or 2.15 or if any
Lender fails to consent to a waiver or amendment which requires the consent of
each of the Lenders (hereinafter any such Lender shall be referred to as a
"Replaced Lender"), then in such case, the Borrower may, upon at least five (5)
Business Days' notice to the Administrative Agent and such Replaced Lender,
designate a replacement lender (a "Replacement Lender") acceptable to the
Administrative Agent in its reasonable discretion, to which such Replaced Lender
shall, subject to its receipt (unless a later date for the remittance thereof
shall be agreed upon by the Borrower and the Replaced Lender) of all amounts
owed to such Replaced Lender hereunder, assign all (but not less than all) of
its rights and obligations hereunder. Upon any assignment by any Lender pursuant
to this Section 2.16 becoming effective, the Replacement Lender shall thereupon
be deemed to be a "Lender" for all purposes of this Agreement and such Replaced
Lender shall thereupon cease to be a "Lender" for all purposes of this Agreement
and shall have no further rights or obligations hereunder (other than pursuant
to Sections 2.12, 2.13, 2.15 and 9.5 while such Replaced Lender was a Lender).
35
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Revolving Loans herein provided for, the Borrower hereby represents and warrants
to the Administrative Agent and to each Lender that:
3.1 Financial Condition. The financial statements provided to the
-------------------
Administrative Agent and the Lenders, consisting of,
(i) an audited balance sheet of the Borrower dated as of December
31, 1996, together with related statements of income and retained
earnings and statements of cash flows, audited by Xxxxxx Xxxxxxxx, LLP,
and
(ii) a company-prepared balance sheet of the Borrower dated as of
June 30, 1997 together with related statements of income and cash flows
for the period ended June 30, 1997,
copies of which have heretofore been provided to each of the Lenders, are
complete and correct in all material respects and present fairly in all material
respects the financial condition and results from operations of the entities and
for the periods specified, except as noted therein and in the report of the
accountants and subject in the case of interim company-prepared statements to
normal year-end adjustments.
3.2 No Change. Since June 30, 1997 there has been no development or
---------
event which has had a Material Adverse Effect.
3.3 Existence; Compliance with Law. Each of the Borrower and each
------------------------------
Restricted Subsidiary (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
limited liability company, corporate or partnership power and authority and the
legal right to own and operate all its material property, to lease the material
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign limited liability company,
corporation or partnership and in good standing under the laws of each
jurisdiction where its ownership, lease or operation of property or the conduct
of its business requires such qualification except to the extent that the
failure to so qualify or be in good standing would not, in the aggregate, have a
Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 Power; Authorization; Enforceable Obligations. Each of the Borrower
---------------------------------------------
and each Guarantor has full power and authority and the legal right to make,
deliver and perform the Credit Documents to which it is party and has taken all
necessary company, corporate or partnership action to authorize the execution,
delivery and performance by it of the Credit Documents to which it is party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection
36
with the borrowings hereunder or with the execution, delivery or performance of
any Credit Document by the Borrower or any Guarantor (other than those which
have been obtained) or with the validity or enforceability of any Credit
Document against the Borrower or any Guarantor (except such filings as are
necessary in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document to which the Borrower or any Guarantor is a
party has been duly executed and delivered on behalf of the Borrower or any
Guarantor. Each Credit Document to which it is a party constitutes a legal,
valid and binding obligation of the Borrower or any Guarantor enforceable
against the Borrower or any Guarantor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.5 No Legal Bar; No Default. The execution, delivery and performance of
------------------------
the Credit Documents, the borrowings thereunder and the use of the proceeds of
the Revolving Loans will not violate any Requirement of Law or any Contractual
Obligation of the Borrower or any Guarantor (except those as to which waivers or
consents have been obtained), and will not result in, or require, the creation
or imposition of any Lien on any of the properties or revenues of the Borrower
or any Guarantor pursuant to any Requirement of Law or Contractual Obligation
other than the Liens arising under or contemplated in connection with the Credit
Documents. Neither the Borrower nor any Restricted Subsidiary is in default
under or with respect to any of its Contractual Obligations in any respect which
would reasonably be expected to have a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.
3.6 No Material Litigation. Except as set forth in Schedule 3.6, no
---------------------- ------------
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the best knowledge of the Borrower,
threatened by or against Borrower or any Restricted Subsidiary or against any of
the respective properties or revenues of the Borrower or any Restricted
Subsidiary (a) with respect to the Credit Documents or any Revolving Loan or any
of the transactions contemplated hereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
3.7 Investment Company Act. Neither the Borrower nor any Restricted
----------------------
Subsidiary is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
3.8 Federal Regulations. No part of the proceeds of any Revolving Loan
-------------------
hereunder will be used directly or indirectly for any purpose which violates, or
which would be inconsistent with, the provisions of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect.
3.9 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable
37
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which would reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, would reasonably be expected to have a Material Adverse
Effect. Neither the Borrower, any Restricted Subsidiary nor any Commonly
Controlled Entity is currently subject to any liability for a complete or
partial withdrawal from a Multiemployer Plan which would reasonably be expected
to have a Material Adverse Effect.
3.10 Environmental Matters. Except to the extent that all of the
---------------------
following, in the aggregate, would not reasonably be expected to have a Material
Adverse Effect:
(a) To the best knowledge of the Borrower, the facilities and
properties owned, leased or operated by the Borrower and the Restricted
Subsidiaries (the "Properties") do not use, store, generate, dispose of
----------
or handle any Materials of Environmental Concern in amounts or
concentrations which (i) constitute a violation of or (ii) could give
rise to liability under, any Environmental Law.
(b) To the best knowledge of the Borrower, the Properties and all
operations at the Properties are in compliance, and have in the last
five years been in compliance, in all material respects with all
applicable Environmental Laws, and there is no contamination at, under
or about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the Borrower (the
"Business").
--------
(c) Neither the Borrower nor any Restricted Subsidiary has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Properties
or the Business, nor does the Borrower have knowledge that any such
notice is being threatened.
(d) To the best knowledge of the Borrower, all Materials of
Environmental Concern have been generated, treated, stored or disposed
of at, on or under any of the Properties in accordance with applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best of the knowledge of the Borrower,
threatened, under any Environmental Law to which the Borrower or any
Restricted Subsidiary is or will be named as a party with respect to the
Properties or the Business or any facility that has received materials
of environmental concern generated by the Borrower, nor are there any
consent decrees or other decrees, consent orders, administrative orders
or other orders, or
38
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Properties or the Business.
(f) To the best knowledge of the Borrower, there has been no
release or threat of release of Materials of Environmental Concern at or
from the Properties arising from or related to the operations of the
Borrower or any Restricted Subsidiary in connection with the Properties
or otherwise in connection with the Business, in violation of or in
amounts or in a manner that could give rise to liability under
Environmental Laws.
3.11 Purpose of Loan. The initial disbursement of the proceeds of the
---------------
loans will be used by the Borrower to repurchase shares of its capital stock, to
repurchase certain employee stock options and to pay the fees and expenses
related thereto. Subsequent disbursements of the proceeds of the Revolving Loans
will be used for general corporate and working capital purposes (including
Capital Expenditures and acquisitions permitted pursuant to the terms hereof).
3.12 Subsidiaries. Set forth on Schedule 3.12 is a complete and accurate
------------ -------------
list of all Subsidiaries of the Borrower and of Holdings LLC as of the Closing
Date. As of the Closing Date, information on the attached Schedule includes
state of organization; the number of shares of each class of capital stock or
partnership or other equity interests (identified by type) outstanding; the
number and percentage of outstanding shares of each class of stock or percentage
of ownership interest; and the number and effect, if exercised, of all
outstanding options, warrants, rights of conversion or purchase and similar
rights. The outstanding capital stock and partnership and other equity interests
of all such Subsidiaries are validly issued, fully paid and non-assessable and
are owned, free and clear of all Liens (other than those arising under or
contemplated in connection with the Credit Documents). As of the Closing Date,
except as set forth on Schedule 3.12, there are no outstanding options or other
-------------
rights pertaining to the partnership or other equity interests of the Borrower
or Holdings LLC, and no voting trusts, shareholders' or partners' agreements
(other than the operating or partnership agreements relating to the formation,
organization, operation and governance of the partnerships or limited liability
companies, copies of which have been provided to the Administrative Agent and
the Lenders) or similar agreement affecting either ownership of or the right to
vote such partnership interests.
3.13 Intellectual Property Rights. The Borrower and the Restricted
----------------------------
Subsidiaries own or have the right to use, subject to any of their obligations
under any valid and binding license agreement, the Intellectual Property (as
defined below) disclosed in Schedule 3.13 hereto, which represents all
Intellectual Property individually or in the aggregate material to the conduct
of the businesses of the Borrower and the Restricted Subsidiaries taken as a
whole on the date hereof. Except as disclosed in Schedule 3.13 hereto or where
the failure shall not have a Material Adverse Effect, (i) the Borrower or a
Restricted Subsidiary has the right to use the Intellectual Property disclosed
in Schedule 3.13 hereto in perpetuity and without payment of royalties, (ii) all
registrations with and applications to Governmental or Regulatory Authorities in
respect of such Intellectual Property are valid and in full force and effect and
are not subject to the payment of any taxes or maintenance fees or the taking of
any other actions by the Borrower or a Restricted Subsidiary to maintain their
validity or effectiveness, and (iii) there are no restrictions on the direct or
indirect transfer of any Contractual Obligation, or any interest therein, held
by the
39
Borrower or any Restricted Subsidiary in respect of such Intellectual Property.
Neither the Borrower nor any Restricted Subsidiary is in default (or with the
giving of notice or lapse of time or both, would be in default) under any
license to use such Intellectual Property the loss of which would reasonably be
expected to have a Material Adverse Effect, to the best of the Borrower's and
the Restricted Subsidiaries' knowledge such Intellectual Property is not being
infringed by any third party the loss of which may have a Material Adverse
Effect, and to the best of the Borrower and its Subsidiaries' knowledge neither
the Borrower nor any Restricted Subsidiary is infringing any Intellectual
Property of any third party the infringement of which would reasonably be
expected to have a Material Adverse Effect. For purposes of this Section 3.13,
"Intellectual Property" means patents and patent rights, trademarks and
---------------------
trademark rights, trade names and trade name rights, service marks and service
xxxx rights, copyrights and copyright rights, including the right to xxx for
past infringement, licenses, proprietary information, designs, processes,
inventions, software and related intellectual property rights and all pending
applications for and registrations of any of the foregoing.
3.14 No Burdensome Restrictions. No Requirement of Law or Contractual
--------------------------
Obligation of the Borrower or any Restricted Subsidiary could reasonably be
expected to have a Material Adverse Effect.
3.15 Taxes. Except as previously disclosed to the Agent, the Borrower
-----
and the Restricted Subsidiaries have filed, or caused to be filed, all material
tax returns (Federal, state, local and foreign) required to be filed and paid
all taxes shown thereon to be due (including interest and penalties) and have
paid all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing (or necessary to preserve any Liens in favor of the Lenders) by
them, except for such taxes (i) which are not yet delinquent or (ii) as are
being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with GAAP. The Borrower is
not aware of any proposed material tax assessments against it or any of the
Restricted Subsidiaries.
3.16 [Intentionally Omitted]
3.17 No Interest in Real Estate. Other than the leasehold interests
--------------------------
reflected on Schedule 3.17 and the ownership by the Borrower of certain real
property in Tulsa, Oklahoma, neither Borrower nor any Restricted Subsidiary has
any interest in any real property.
3.18 Printing. Except for the printing conducted by Galaxy Classics as
--------
disclosed to the Agent, neither the premises leased by the Borrower or any
Restricted Subsidiary nor any other real estate owned or leased by the Borrower
has been used by the Borrower or any Restricted Subsidiary or any predecessor in
interest for printing including without limitation, printing of any
publications, including newspapers, magazines, circulars, pamphlets, books or
similar items, but excluding printing of office correspondence and ordinary
printing for customary office purposes.
3.19 Unrestricted Subsidiaries. No Unrestricted Subsidiary owns assets
-------------------------
having a value of more than $100,000 and no Unrestricted Subsidiary engages in
any active business activities.
40
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing Date. This Agreement shall become effective
--------------------------
upon the satisfaction of the following conditions precedent:
(a) Execution of Agreement. The Administrative Agent shall have
----------------------
received (i) multiple counterparts of this Agreement for each Lender,
executed by a duly authorized officer of each party hereto, (ii) for the
account of each Lender a Revolving Note, (iii) multiple counterparts of
the Guaranty for each Lender executed by each Guarantor, and (iv)
multiple counterparts of the Security Agreement, the Pledge Agreements
and other Security Documents for each Lender and UCC financing
statements relating thereto executed by a duly authorized officer of
each party thereto, in each case conforming to the requirements of this
Agreement and executed by a duly authorized officer of the Borrower and
the Guarantors, as applicable.
(b) Liability and Casualty Insurance. The Administrative Agent
--------------------------------
shall have received copies of insurance policies or certificates of
insurance evidencing liability and casualty insurance meeting the
requirements set forth herein or in the Security Agreement.
(c) Operating Company and Corporate Documents. The Administrative
-----------------------------------------
Agent shall have received the following:
(i) Articles of Incorporation. Copies of the
---------------------------
certificate of formation, articles of organization, articles of
incorporation or charter documents of the Borrower and each
Guarantor certified to be true and complete as of a recent date
by the appropriate governmental authority of the state of its
organization or incorporation.
(ii) Resolutions. Copies of the certified
-----------
corporate resolutions and certificates of action of the action of
the Borrower and the Guarantors approving and adopting the Credit
Documents, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a manager, secretary
or assistant secretary as of the Closing Date to be true and
correct and in full force and effect as of such date.
(iii) Operating Agreement and Bylaws. A copy of
-------------------------------
the operating agreement or the bylaws of the Borrower and the
Guarantors certified by a manager, secretary or assistant
secretary as of the Closing Date to be true and correct and in
full force and effect as of such date.
(iv) Good Standing. Copies of (i) certificates
-------------
of good standing, existence or its equivalent with respect to the
Borrower and the
41
Guarantors certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and each
other state in which the failure to so qualify and be in good
standing would have a material adverse effect on the business or
operations of the Borrower and the Guarantors in such state and
(ii) a certificate indicating payment of all corporate franchise
taxes certified as of a recent date by the appropriate
governmental taxing authorities.
(d) Secretary's Certificate. The Administrative Agent shall have
-----------------------
received a certificate of a duly authorized secretary, assistant
secretary, managing member or officer of each of the Borrower and the
Guarantors dated the Closing Date, substantially in the form of Schedule
--------
4.1(d) with appropriate insertions and attachments.
------
(e) Legal Opinion of Counsel. The Administrative Agent shall have
------------------------
received, with a copy for each Lender, opinions of various counsel for
the Credit Parties, dated the Closing Date and addressed to the
Administrative Agent and the Lenders, in form and substance satisfactory
to Administrative Agent and the Lenders.
(f) Compliance and Solvency Certificates. The Administrative
------------------------------------
Agent shall have received from an Authorized Signatory (i) a compliance
certificate substantially the form of Schedule 4.1(f)(i) demonstrating,
------------------
among other things, the Borrower's compliance on a pro forma basis with
the financial covenants set forth in Section 5.9 hereof and (ii) a
solvency certificate substantially in the form of Schedule 4.1(f)(ii)
-------------------
demonstrating the solvency of the Borrower and the Guarantors.
(g) Fees. The Administrative Agent shall have received all fees,
----
if any, owing pursuant to the Commitment Letter.
(h) Corporate Structure. The company capital and ownership
-------------------
structure of the Borrower and the Guarantors shall be as described in
Schedule 4.1(h).
(i) Government Consent. Receipt by the Administrative Agent of
------------------
evidence that all governmental, shareholder and material third party
consents (including Xxxx-Xxxxx-Xxxxxx clearance, to the extent
necessary) and approvals necessary in connection with the transactions
contemplated hereby and expiration of all applicable waiting periods
without any action being taken by any authority that could reasonably be
likely to restrain, prevent or impose any material adverse conditions on
such transactions or that could reasonably be likely to seek or threaten
any of the foregoing, and no law or regulation shall be applicable which
in the judgment of the Administrative Agent could reasonably be likely
to have such effect.
(j) Litigation. There shall not exist any (i) order, decree,
----------
judgment, ruling or injunction which restrains the consummation of the
transactions contemplated hereby or (ii) any pending or threatened
action, suit, investigation or proceeding against a Credit
42
Party that would have or would reasonably be expected to have a Material
Adverse Effect.
(k) Purchase Agreement. There shall not have been any material
------------------
modification, amendment, supplement or waiver to the Purchase Agreement
without the prior written consent of the Administrative Agent and the
transactions contemplated thereby shall have been consummated in
accordance with the terms thereof. The Administrative Agent shall have
received the final Purchase Agreement, together with all exhibits and
schedules thereto, certified by an officer of the Borrower.
(l) Equity Investment. The Administrative Agent shall have
----------------
received evidence of receipt by the Borrower of $35,500,000 of cash
equity and the availability to the Borrower of an additional $4,500,000
of cash equity.
(m) Subordinated Debt. The Administrative Agent shall have
-----------------
received evidence of receipt by the Borrower of at least $80,000,000
from the issuance of the Subordinated Debt.
(n) Opening Consolidated Adjusted EBITDA. The Borrower's
------------------------------------
Consolidated Adjusted EBITDA for the 12 months ended June 30, 1997,
shall be at least $18,395,000.
(o) Notice of Account Designation. The Borrower shall have
-----------------------------
executed and delivered to the Administrative Agent a Notice of Account
Designation.
(p) Subsection 4.2 Conditions. The conditions specified in
-------------------------
subsections 4.2(a) and (b) shall be satisfied on the Closing Date as if
Loans were to be made on such date.
(q) Additional Matters. All other documents and legal matters in
------------------
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative
Agent and its counsel.
4.2 Conditions to All Loans. The obligation of each Lender to make any
-----------------------
Revolving Loan hereunder (including the initial Revolving Loans to be made
hereunder) is subject to the satisfaction of the following conditions precedent
on the date of making such Revolving Loan:
(a) Representations and Warranties. The representations and
------------------------------
warranties made by the Credit Parties in the Credit Documents or which
are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects
on and as of the date of such Revolving Loan as if made on and as of
such date.
(b) No Default or Event of Default. No Default or Event of
------------------------------
Default shall have occurred and be continuing on such date or after
giving effect to the Revolving Loan to be made on such date unless such
Default or Event of Default shall have been waived in accordance with
this Agreement.
43
Each request for a Revolving Loan and each acceptance by the Borrower of
a Revolving Loan shall be deemed to constitute a representation and warranty by
the Borrower as of the date of such Revolving Loan that the applicable
conditions in paragraphs (a) and (b) have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Revolving
Commitments have terminated, no Revolving Note remains outstanding and unpaid
and the Revolving Loans, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Borrower shall, and in the case of subsections 5.3, 5.4, 5.5, 5.6, 5.7
and 5.8 shall cause each of the Restricted Subsidiaries, to:
5.1 Financial Statements. Furnish to the Administrative Agent and each
--------------------
of the Lenders:
(a) Annual Financial Statements. As soon as available, but in any
---------------------------
event within 90 days after the end of each fiscal year of the Borrower,
a copy of the consolidated and consolidating balance sheet of the
Borrower and the Restricted Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of income
and retained earnings and of cash flows of the Borrower and the
Restricted Subsidiaries for such year, audited (as to the consolidated
statements) by Xxxxxx Xxxxxxxx, LLP or other firm of independent
certified public accountants of nationally recognized standing
reasonably acceptable to the Majority Lenders, setting forth in each
case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification indicating that the scope of the audit was inadequate to
permit such independent certified public accountants to certify such
financial statements without such qualification; and
(b) Quarterly Financial Statements. As soon as available and in
------------------------------
any event within 45 days after the end of each of the first three fiscal
quarters of the Borrower, a company-prepared consolidated and
consolidating balance sheet of the Borrower and the Restricted
Subsidiaries as at the end of such period and related company-prepared
statements of income and retained earnings and of cash flows for the
Borrower and the Restricted Subsidiaries for such quarterly period and
for the portion of the fiscal year ending with such period, in each case
setting forth in comparative form consolidated and consolidating figures
for the corresponding period or periods of (i) the preceding fiscal year
and (ii) the annual budget plan (subject in each case to normal
recurring year-end audit adjustments);
(c) Monthly Financial Statements. As soon as available and in any
----------------------------
event within 45 days after the end of each month, a company-prepared
consolidated and
44
consoldiating balance sheet of the Borrower and the Restricted
Subsidiaries as at the end of such month and related company-prepared
statements of income and retained earnings and of cash flows for the
Borrower and the Restricted Subsidiaries for such monthly period and for
the portion of the fiscal year ending with such period, in each case in
summary form and in each case setting forth in comparative form
consolidated and consolidating figures for the corresponding period or
periods of (i) the preceding fiscal year and (ii) the annual budget plan
(subject in each case to normal recurring year-end audit adjustments);
(d) Annual Budget Plan. As soon as available, but in any event no
------------------
more than 45 days after the end of each fiscal year, a copy of the
detailed annual budget or plan for the next fiscal year set out by
month, in form and detail reasonably acceptable to the Administrative
Agent and the Majority Lenders, together with a summary of the material
assumptions made in the preparation of the budget or plan;
all such consolidating statements to be as to the five operating divisions of
the Borrowers and all such monthly and quarterly financial statements to fairly
present in all material respects the financial condition and results from
operations of the entities and for the periods specified (subject, in the case
of interim statements, to normal recurring year-end audit adjustments) and to be
prepared in reasonable detail and, in the case of the annual and quarterly
financial statements provided in accordance with subsections (a) and (b) above,
in accordance with GAAP applied consistently throughout the periods reflected
therein (except as approved by such accountants or Authorized Signatory, as the
case may be, and disclosed therein) and further accompanied by a description of,
and an estimation of the effect on the financial statements on account of, a
change in the application of accounting principles as provided in Section 1.3.
5.2 Certificates; Other Information. Furnish to the Administrative
-------------------------------
Agent and each of the Lenders:
(a) Accountant's Certificate. Concurrently with the delivery of
------------------------
the financial statements referred to in subsection 5.1(a) above, a
certificate of the independent certified public accountants reporting on
such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of
Default, except as specified in such certificate;
(b) Compliance Certificate. Concurrently with the delivery of the
----------------------
financial statements referred to in Sections 5.1(a) and 5.1(b) above, a
certificate of a Authorized Signatory stating that, to the best of such
Authorized Signatory's knowledge, the Borrower and the Restricted
Subsidiaries during such period observed or performed in all material
respects all of their covenants and other agreements, and satisfied in
all material respects every material condition, contained in this
Agreement to be observed, performed or satisfied by them, and that such
Authorized Signatory has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and such certificate
shall include the calculations required to indicate compliance with
Section 5.9 and
45
information as to Restricted Payments made in the applicable period in
accordance with Section 6.12;
(c) Public Notices. Within thirty days after the same are sent,
--------------
copies of all reports (other than those otherwise provided pursuant to
subsection 5.1 and those which are of a promotional nature) and other
financial information which the Borrower sends to its public
stockholders or to the holders of any public Subordinated Debt, and
within thirty days after the same are filed, copies of all financial
statements and non-confidential reports which the Borrower may make to,
or file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(d) Other Information. Promptly, such additional financial and
-----------------
other information as the Administrative Agent, on behalf of any Lender,
may from time to time reasonably request.
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
----------------------
before maturity or before they become delinquent, as the case may be, in
accordance with industry practice (subject, where applicable, to specified grace
periods) all its material obligations of whatever nature and any additional
costs that are imposed as a result of any failure to so pay, discharge or
otherwise satisfy such obligations, except when the amount or validity of such
obligations and costs is currently being contested in good faith by appropriate
proceedings and reserves, if applicable, in conformity with GAAP with respect
thereto have been provided on the books of the Borrower or any Restricted
Subsidiary, as the case may be.
5.4 Conduct of Business and Maintenance of Existence. Preserve, renew
------------------------------------------------
and keep in full force and effect its company, corporate or partnership
existence and take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business; comply
with all Contractual Obligations and Requirements of Law applicable to it except
to the extent that failure to comply therewith would not, in the aggregate, have
a Material Adverse Effect.
5.5 Maintenance of Property; Insurance. Keep all material property
----------------------------------
useful and necessary in its business in reasonably good working order and
condition (ordinary wear and tear excepted); maintain with financially sound and
reputable insurance companies insurance on all its material property in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies engaged in the same or a similar business;
and furnish to the Administrative Agent, upon written request, full information
as to the insurance carried.
5.6 Inspection of Property; Books and Records; Discussions. Keep proper
------------------------------------------------------
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its businesses and activities; and permit,
during regular business hours and upon reasonable notice by the Administrative
Agent or any Lender, the Administrative Agent at the Borrower's expense or any
Lender at such Lender's expense to visit and inspect any of its properties and
examine and make
46
abstracts from any of its books and records (other than materials protected by
the attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the
Borrower and the Restricted Subsidiaries with officers and employees of the
Borrower and the Restricted Subsidiaries and with their independent certified
public accountants.
5.7 Notices. Give notice to the Administrative Agent (which shall
-------
promptly transmit such notice to each Lender) of:
(a) within five Business Days after the Borrower knows of the
occurrence of any material Default or Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of the Borrower or any Restricted Subsidiary
which would reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
known to the Borrower, affecting the Borrower or any Restricted
Subsidiary which, if adversely determined, would reasonably be expected
to have a Material Adverse Effect;
(d) as soon as possible and in any event within 30 days after the
Borrower knows: (i) the occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower, any Restricted
Subsidiary or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization
or Insolvency of, any Plan, provided that in each case in clause (i) and
(ii) above, such event or condition could have a Material Adverse
Effect; and
(e) promptly, any other development or event which would
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Authorized Signatory setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.8 Environmental Laws.
------------------
(a) Comply in all material respects with, and take reasonable
actions to ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain
and comply in all material respects with and maintain, and take
reasonable actions to ensure that all tenants and subtenants obtain and
47
comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by
applicable Environmental Laws except to the extent that failure to do so
would not reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities regarding
Environmental Laws except to the extent that the same are being
contested in good faith by appropriate proceedings and the failure to do
or the pendency of such proceedings would not reasonably be expected to
have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever
kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of
the Borrower, any Restricted Subsidiary or the Properties, or any
orders, requirements or demands of Governmental Authorities related
thereto, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, response costs,
court costs and litigation expenses, except to the extent that any of
the foregoing arise out of the gross negligence or willful misconduct of
the party seeking indemnification therefor. The agreements in this
paragraph shall survive repayment of the Revolving Notes and all other
amounts payable hereunder.
5.9 Financial Covenants.
-------------------
(a) Total Leverage Ratio. The Borrower will maintain, as of the end of
--------------------
each fiscal quarter to occur during the periods shown, a Total Leverage Ratio of
not greater than:
Period Maximum Total Leverage Ratio
------ ----------------------------
Closing Date through December 31, 1999 6.0 to 1.0
January 1, 2000 through December 31, 2000 5.5 to 1.0
January 1, 2001 through December 31, 2001 5.0 to 1.0
January 1, 2002 and thereafter 4.5 to 1.0
(b) Senior Leverage Ratio. The Borrower will maintain, as of the end of
---------------------
each fiscal quarter, a Senior Leverage Ratio of not greater than 3.5 to 1.0.
(c) Interest Coverage Ratio. The Borrower will maintain, as of the end
-----------------------
of each fiscal quarter to occur during the periods shown, an Interest Coverage
Ratio of at least:
48
Period Minimum Interest Coverage Ratio
------ -------------------------------
Closing Date through March 31, 1999 1.5 to 1.0
April 1, 1999 through March 31, 2000 1.75 to 1.0
April 1, 2000 and thereafter 2.0 to 1.0
(d) Fixed Charge Coverage Ratio. The Borrower will maintain, as of the
---------------------------
end of each fiscal quarter (commencing with the fiscal quarter ending September
30, 1998), a Fixed Charge Coverage Ratio of at least 1.05 to 1.0.
5.10 Covenants Regarding Patents, Trademarks and Copyrights.
------------------------------------------------------
(a) The Borrower shall notify the Administrative Agent promptly if it
knows or has reason to know that any application, letters patent or registration
relating to any Patent or Trademark which is material to the business of the
Borrower and the Restricted Subsidiaries taken as a whole may become abandoned,
or of any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office or any court) regarding the
Borrower's or such Restricted Subsidiary's ownership of any Patent or Trademark
which is material to the business of the Borrower and the Restricted
Subsidiaries taken as a whole, its right to patent or register the same, or to
enforce, keep and maintain the same.
(b) The Borrower shall notify the Administrative Agent promptly after it
knows or has reason to know of any adverse determination or development
(including, without limitation, the institution of, or any such determination or
development in, any proceeding in any court) regarding any Copyright which is
material to the business of the Borrower and the Restricted Subsidiaries taken
as a whole, whether (i) such Copyright may become invalid or unenforceable prior
to its expiration or termination, or (ii) the Borrower's or such Restricted
Subsidiary's ownership of such Copyright, its right to register the same or to
enforce, keep and maintain the same may become affected.
(c)(i) The Borrower shall promptly notify the Administrative Agent of
any filing by the Borrower or any Restricted Subsidiary, either itself or
through any agent, employee, licensee or designee (but in no event later than
the fifteenth day following such filing), of any application for the
registration of any Copyright, Trademark or Patent with the United States
Copyright Office or United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision thereof.
(ii) Concurrently with the delivery of quarterly and annual financial
statements of the Borrower pursuant to Section 5.1 hereof, the Borrower shall
provide the Administrative Agent and its counsel a complete and correct list of
all Copyrights, Patents and Trademarks owned by the Borrower or any of the
Restricted Subsidiaries that have not been set forth as annexes of such
documents and instruments showing all filings and recordings for the protection
of the security interest of the Administration Agent therein pursuant to the
agreements of the United States Patent and Trademark Office or the United States
Copyright Office.
49
(iii) Upon request of the Administrative Agent, the Borrower shall
execute and deliver any and all agreements, instruments, documents, and papers
as the Administrative Agent may reasonably request to evidence the
Administrative Agent's security interest in the Copyrights, Patents, Trademarks
and the General Intangibles referred to in clauses (i) and (ii), including,
without limitation, the goodwill of the Borrower or such Restricted Subsidiary,
relating thereto or represented thereby (or such other Copyrights, Trademarks,
Patents or the General Intangibles relating thereto or represented thereby as
the Administrative Agent may reasonably request).
(d) The Borrower will take all necessary actions, including, without
limitation, in any proceeding before the United States Patent and Trademark
Office or the United States Copyright Office, to maintain each letters patent
for the Patents or registration of the Trademarks and Copyrights which are
material to the business of the Borrower and the Restricted Subsidiaries taken
as a whole, including, without limitation, payment of maintenance fees, filing
of applications for renewal, affidavits of use, affidavits of incontestability
and opposition, interference and cancellation proceedings.
(e) In the event that any Trademark, Copyright or Patent is infringed,
misappropriated or diluted by a third party, the Borrower shall notify the
Administrative Agent promptly after it learns thereof and shall, unless the
Borrower or the relevant Restricted Subsidiary, as the case may be, shall
reasonably determine that such Trademark, Copyright or Patent is not material to
the business of the Borrower and the Restricted Subsidiaries taken as a whole,
promptly xxx for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as the Borrower or such Restricted Subsidiary, as the case
may be, shall reasonably deem appropriate under the circumstances to protect
such Trademark , Copyright or Patent.
5.11 Lender Fee, Etc. Pay to the Administrative Agent the annual Lender
----------------
Fee and comply with the other agreements provided for in the Commitment Letter,
dated as of the date hereof, between the Borrower and the Administrative Agent.
5.12 Subsidiaries. In the event the Borrower or any Guarantor shall
-------------
acquire or otherwise obtain any Subsidiary on or after the Closing Date, the
Borrower shall promptly notify the Administrative Agent of the existence of such
Subsidiary, shall provide the Administrative Agent with the information required
by Section 3.12 with respect thereto, shall cause the ownership interests in
such Subsidiary to be pledged to the Agent pursuant to a pledge agreement in
form and substance similar to the Pledge Agreement and shall cause such
Subsidiary to enter into and deliver to the Administrative Agent on behalf of
the Lenders (i) a guaranty agreement with respect to the obligations of the
Borrower under the Credit Documents, such guaranty agreement to be in form and
substance reasonably acceptable to the Administrative Agent, and (ii) a security
agreement in form and substance similar to the Security Agreement pursuant to
which the Subsidiary shall pledge, assign and transfer, and grant to the
Administrative Agent on behalf of the Lenders a first priority perfected
security interest in all of its tangible and intangible properties. In
connection therewith, the Borrower shall cause the Subsidiary to deliver to the
Administrative Agent on behalf of the Lenders certified organizational
documents, evidences of
50
authority and opinion letters and to take such other action in connection
therewith, including without limitation the filing of appropriate financing
statements, as the Administrative Agent may reasonably require.
5.13 Subsequently Acquired Real Property. In the event the Borrower or
-----------------------------------
any Guarantor shall acquire any interest in real property on or after the
Closing Date (other than the fee and leasehold interests set forth on Schedule
3.17 as of the Closing Date), the Borrower or such Guarantor, as the case may
be, shall enter into and deliver to the Administrative Agent on behalf of the
Lenders a deed of trust or mortgage, together with evidences of authority and
opinion letters, in form and substance reasonably acceptable to the
Administrative Agent pursuant to which the Borrower or such Guarantor grants a
deed of trust or mortgage to the Administrative Agent (or its trustee) on behalf
of the Lenders in such real property interest free and clear of all Liens other
than Permitted Liens. In connection therewith, the Borrower or such Guarantor
shall deliver to the Administrative Agent such surveys, environmental reports
and title insurance policies and take such other action in connection therewith,
including without limitation the filing of appropriate fixture filings, as shall
be reasonably required by the Administrative Agent.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Revolving
Commitments have terminated, no Revolving Note remains outstanding and unpaid
and the Revolving Loans, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full.
6.1 Indebtedness. The Borrower will not, nor will it permit any
------------
Restricted Subsidiary to, contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and the
other Credit Documents;
(b) Indebtedness existing as of the Closing Date as referenced in
the financial statements referenced in Section 3.1 (and set out more
specifically in Schedule 6.1(b)) and renewals, refinancings or
----------------
extensions thereof in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension;
(c) unsecured intercompany Indebtedness among the Borrower and
the Restricted Subsidiaries; provided, however, the sum of (A) the
aggregate outstanding amount of such Indebtedness incurred by
Non-Guarantor Restricted Subsidiaries pursuant to Section 6.1(c) plus
(B) the aggregate amount of all sales, transfers, leases or other
dispositions of property or assets to Non-Guarantor Restricted
Subsidiaries pursuant to Section 6.5(a)(iii) plus (C) the aggregate
51
amount of equity investments made in Non-Guarantor Restricted
Subsidiaries pursuant to subsection (iii) of the definition of
"Permitted Investments" shall not exceed $5,000,000 at any time;
---------------------
(d) Subordinated Debt;
(e) other unsecured Indebtedness of up to $10,000,000 at any
time outstanding incurred in connection with Permitted Acquisitions so
long as the Borrower demonstrates to the reasonable satisfaction of the
Administrative Agent that the Borrower will be in pro forma compliance
with all of the terms and provisions of this Agreement after incurring
any such Indebtedness; and
(f) other Indebtedness (including purchase money indebtedness)
which does not exceed $5,000,000 in the aggregate at any time
outstanding.
6.2 Liens. The Borrower will not, nor will it permit any Restricted
-----
Subsidiary to, contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective property or assets of any kind (whether real
or personal, tangible or intangible), whether now owned or hereafter acquired,
except for Permitted Liens.
6.3 Guaranty Obligations. The Borrower will not, nor will it permit any
--------------------
Restricted Subsidiary to, enter into or otherwise become or be liable in respect
of any Guaranty Obligations (excluding specifically therefrom endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) other than (i) those in favor of the Lenders in connection herewith,
(ii) Guaranty Obligations by the Borrower or any Restricted Subsidiary of other
Indebtedness permitted under Section 6.1 (except, as regards Indebtedness under
subsection (b) thereof, only if and to the extent such Indebtedness was
guaranteed on the Closing Date) and (iii) other Guaranty Obligations which do
not exceed $5,000,000 at any time outstanding.
6.4 Lines of Business. The Borrower will not, nor will it permit any of
-----------------
the Restricted Subsidiaries to, alter its line or lines of business activity if
as a result thereof the Borrower and the Restricted Subsidiaries would not be
predominantly engaged in the business of publishing through print and electronic
media trade and business magazines, operating or providing services to trade and
business expositions and conferences and providing marketing and information
services and similar or related businesses.
6.5 Consolidation, Merger, Sale or Purchase of Assets, etc. The
------------------------------------------------------
Borrower will not, nor will it permit any Restricted Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease or otherwise dispose of all or any substantial part of its
property or assets outside of the ordinary course of business or agree
to do so at a future time except the following, without duplication,
shall be expressly permitted:
(i) Specified Sales;
52
(ii) the sale, transfer, lease or other disposition of
property or assets not in the ordinary course of business (other than
Specified Sales), where and to the extent that they are the result of a
Recovery Event or otherwise and the net proceeds therefrom are used to
repair or replace damaged property or to purchase or otherwise acquire
new assets or property provided that such purchase or acquisition is
committed to within 90 days of receipt of the net proceeds and such
purchase or acquisition is consummated within 180 days of such receipt;
(iii) the sale, transfer, lease or other disposition of
property or assets to the Borrower or any Restricted Subsidiary;
provided, however, the sum of (A) the aggregate amount of such sales,
transfers, leases or other dispositions to Non-Guarantor Restricted
Subsidiaries plus (B) the aggregate outstanding amount of Indebtedness
incurred by Non-Guarantor Restricted Subsidiaries pursuant to Section
6.1(c) plus (C) the aggregate amount of equity investments made in
Non-Guarantor Restricted Subsidiaries pursuant to subsection (iii) of
the definition of "Permitted Investments" shall not exceed $5,000,000 at
---------------------
any time; and
(iv) sales of Unrestricted Margin Stock for fair market
value in cash (provided that notwithstanding anything contained herein
to the contrary, the proceeds of such sales may only be invested in cash
and Cash Equivalents).
Provided no Default or Event of Default then exists, the Administrative
Agent shall, without obtaining the consent of any Lender, release its
lien on any collateral sold or otherwise transferred in accordance with
this Section upon the consummation of such sale or transfer and upon the
performance by the Borrower of all of its obligations hereunder on
account of such sale or transfer.
As used herein, "substantial part" shall mean business, property or
----------------
assets which have contributed
(i) 10% or more, in any instance, or
(ii) 15% or more, when aggregated with all other such
sales or dispositions which have occurred within a period of one
year,
of Consolidated Adjusted EBITDA for the four (4) consecutive fiscal
quarters most recently ending prior to the date thereof; or
(b) purchase, lease or otherwise acquire (in a single transaction
or a series of related transactions) all or any substantial part of the
property or assets of any Person (other than purchases or other
acquisitions of inventory, leases, materials, property and equipment in
the ordinary course of business, except as otherwise limited or
prohibited herein), or enter into any merger or consolidation, except
for (i) investments or acquisitions permitted pursuant to Section 6.6,
(ii) acquisitions of types of businesses
53
permitted to be engaged in by the Borrower and the Restricted
Subsidiaries pursuant to Section 6.4 (the "Permitted Acquisitions") so
long as with respect to the acquisition of each such business, (A) no
Default or Event of Default then exists or would exist after giving
effect thereto and (B) the Borrower demonstrates to the reasonable
satisfaction of the Administrative Agent that the Borrower will be in
pro forma compliance with all of the terms and provisions of this
Agreement after giving effect thereto, (iii) the merger or consolidation
of the Borrower or a Restricted Subsidiary into the Borrower or a
Guarantor, or a sale, transfer or lease of all or a substantial part of
the properties of the Borrower or any Restricted Subsidiary (at fair
value) to, the Borrower or any Guarantor and (iv) the merger of any
Person into the Borrower or any Guarantor, provided that the Borrower or
any Guarantor shall be the surviving entity, and in any such case no
Default or Event of Default would exist after giving effect thereto.
6.6 Advances, Investments and Loans. The Borrower will not, nor will it
-------------------------------
permit any Restricted Subsidiary to, lend money or extend credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person except for Permitted Investments.
6.7 Transactions with Affiliates. Except (i) as permitted in subsection
----------------------------
(iv) of the definition of Permitted Investments, and (ii) for the payments and
issuances permitted by Section 6.8 or 6.12, the Borrower will not, nor will it
permit any Restricted Subsidiary to, enter into any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than on terms and conditions
substantially as favorable as would be obtainable in a comparable arm's-length
transaction with a Person other than an officer, director, shareholder or
Affiliate.
6.8 Ownership of Subsidiaries. The Borrower will not, nor will it permit
-------------------------
any Restricted Subsidiary to, create, form or acquire a Subsidiary other than
any Subsidiary acquired or formed to acquire assets in connection with any
Permitted Acquisition, provided such Subsidiary guarantees all of the
obligations of the Borrower hereunder, pledges substantially all of its assets
to secure such guarantee and has its stock or other equity interests pledged to
the Administrative Agent, all on terms reasonably satisfactory to the
Administrative Agent. Further, the Borrower will not, nor will it permit any of
the Restricted Subsidiaries to, issue, sell, transfer, pledge or otherwise
dispose of any partnership interests, limited liability company interest, shares
of capital stock or other equity or ownership interests ("Equity Interests") in
----------------
themselves or in any of their Subsidiaries, except (i) Equity Interests that are
issued, sold or transferred to the Borrower or a wholly-owned Subsidiary of the
Borrower and (ii) in connection with a transaction permitted under Section 6.5.
6.9 Fiscal Year. The Borrower will not, nor will it permit any
-----------
Restricted Subsidiary to, change its fiscal year.
6.10 [intentionally left blank].
54
6.11 Prepayments of Indebtedness, etc. Neither the Borrower nor any of
--------------------------------
the Restricted Subsidiaries will (i) after the issuance thereof, amend or modify
(or permit the amendment or modification of), if reasonably and materially
adverse to the interests of the Lenders (including, without limitation, any
acceleration or shortening of amortization of principal thereof, or modification
of the terms of subordination relating thereto), any of the terms of any Total
Funded Debt (other than any Indebtedness permitted by Section 6.1(e) or (f) or
any Indebtedness hereunder), (ii) make (or give any notice with respect thereto)
any voluntary or optional payment or prepayment or redemption or acquisition for
value of (including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying when
due) or exchange of any Total Funded Debt (other than any Indebtedness permitted
by Section 6.1(e) or (f), any Indebtedness hereunder, any prepayment of
Subordinated Debt with Net Sales Proceeds remaining after the Borrower has made
all required prepayments hereunder or any refinancing of any issue of
Subordinated Debt with any subsequent issue of Subordinated Debt and other than
the redemption or repurchase of up to $10,000,000 of the Subordinated Debt) or
(iii) make any regularly scheduled payment of Subordinated Debt in violation of
the subordination provisions contained in the Subordinated Debt Documents.
6.12 Restricted Payments. The Borrower will not, nor will it permit any
-------------------
of the Restricted Subsidiaries to, make any Restricted Payment; provided,
--------
however, Holdings LLC or any Subsidiary of the Borrower may make Restricted
-------
Payments to the Borrower and any Subsidiary of Holdings LLC may make Restricted
Payments to Holdings LLC; provided further, that notwithstanding any other
----------------
restriction in this Section 6.12, (i) the Borrower may pay an annual monitoring
fee of $90,000.00 to Veronis, Suhler & Associates Inc. or its Affiliates so long
as no Event of Default shall then exist, (ii) the Borrower may reimburse
Veronis, Suhler & Associates Inc. or its Affiliates, for out-of-pocket expenses
incurred by Veronis, Suhler & Associates Inc. or its Affiliates in connection
with its monitoring of the Borrower so long as no Event of Default shall then
exist, (iii) the Borrower may pay reasonable and customary investment banking
fees to Veronis, Suhler & Associates, Inc. in connection with investment banking
services rendered to the Borrower in connection with any sale or Permitted
Acquisition or proposed sale or Permitted Acquisition which does not close and
(iv) so long as no Event of Default under Section 7(a) shall then exist,
Holdings LLC may distribute from time to time such amounts to enable each direct
or indirect member of Holdings LLC to pay any Federal, state or local income tax
liability (based upon the maximum applicable tax rates) attributable to the
inclusion in such member's individual income of his or its distributive share of
the income and gain of Holdings LLC (irrespective of any losses any such member
may otherwise have). The Borrower shall be permitted to pay to Fir Tree all or
any portion of the amounts otherwise payable to Veronis, Suhler & Associates
Inc. in accordance with subsections (i), (ii) and (iii) above. The compliance
certificate provided pursuant to Section 5.2(b) will include a detailed
computation of the portion of Restricted Payments relating to income taxes and a
summary of the Restricted Payments made in the applicable period.
6.13 Organizational Documents; Purchase Agreement; Subordinated Debt
---------------------------------------------------------------
Documents; LLC Preferred Stock. The Borrower will not, nor will it permit any of
------------------------------
the Restricted Subsidiaries to, amend or otherwise modify their articles of
limited partnership, limited liability limited partnership, incorporation,
limited liability company or other similar organizational or
55
charter document, or their limited partnership agreement, limited liability
limited partnership agreement, limited liability company agreement, bylaws,
operating agreement or other similar governing document or the Purchase
Agreement or any of the Subordinated Debt Documents or the LLC Preferred Stock
in a manner which is adverse to the interest of the Lenders, without the prior
written consent of the Administrative Agent and the Majority Lenders, which
consent will not be unreasonably withheld.
6.14 No Printing. No portion of any real property owned or leased by the
-----------
Borrower or any Restricted Subsidiary will be used for the printing of any
publications, including without limitation, newspapers, magazines, circulars,
pamphlets, books or similar items, but excluding printing of office
correspondence and ordinary printing for customary office purposes.
6.15 Unrestricted Subsidiaries. The Borrower shall not permit any
-------------------------
Unrestricted Subsidiary to acquire any additional assets or to undertake any
additional business activities (including the incurring of any Indebtedness).
SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) (i) The Borrower shall fail to pay any principal on any
Revolving Note when due in accordance with the terms thereof or hereof;
or (ii) the Borrower shall fail to pay any interest on any Revolving
Note or any fee or other amount payable hereunder when due in accordance
with the terms thereof or hereof and such failure shall continue
unremedied for three (3) days; or
(b) Any representation or warranty made or deemed made by the
Borrower or any Guarantor herein, in the Security Agreement or in any of
the other Credit Documents or which is contained in any certificate,
document or financial or other statement furnished at any time under or
in connection with this Agreement shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made or
deemed made; or
(c) The Borrower or other Credit Party shall
(i) default in the due performance or observance
of subsections 5.7(a) or (b) or Section 5.9, or
(ii) default in any material respect in the
observance or performance of any other term, covenant or
agreement contained in this Agreement (other than as
described in subsections 7(a) or 7(c)(i) above) or any of
the other Credit Documents, and such default shall
continue unremedied for a period of 30 days or more after
the earlier of any
56
executive officer of the Borrower becoming aware of such
default or the receipt by the Borrower or such Credit
Party of written notice from the Administrative Agent
thereof; or
(d) The Borrower or any of the Restricted Subsidiaries shall (i)
default in any payment of principal of or interest on any Indebtedness
(other than the Revolving Notes) in a principal amount outstanding of at
least $1,000,000 in the aggregate for the Borrower and the Restricted
Subsidiaries or in the payment of any matured Guarantee Obligation in a
principal amount outstanding of at least $1,000,000 in the aggregate for
the Borrower and the Restricted Subsidiaries beyond the period of grace
(not to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness or Guarantee Obligation was created; or
(ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness in a principal amount
outstanding of at least $1,000,000 in the aggregate for the Borrower and
the Restricted Subsidiaries or Guarantee Obligation in a principal
amount outstanding of at least $1,000,000 in the aggregate for the
Borrower and the Restricted Subsidiaries or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders
of such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or such Guarantee Obligation to become payable; or
(e) (i) The Borrower or any of the Restricted Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or the Borrower or any of the Restricted Subsidiaries shall make
a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Borrower or any of the Restricted
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Borrower or any of the Restricted
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or any of the Restricted
Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in clause (i), (ii), or (iii) above; or (v) the Borrower or any of the
Restricted
57
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of the Restricted Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered by
insurance) of $1,000,000 or more and all such judgments or decrees shall
not have been paid and satisfied, vacated, discharged, stayed or bonded
pending appeal within 45 days from the entry thereof; or
(g) (i) The Borrower, any Restricted Subsidiary or any Commonly
Controlled Entity shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, other than a transaction for which a statutory exemption is
available or an administrative exemption has been obtained, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Single-Employer
Plan or any Lien in favor of the PBGC or a Single-Employer Plan shall
arise on the assets of the Borrower, any Restricted Subsidiary or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a Trustee is, in the reasonable opinion of
the Majority Lenders, likely to result in the termination of such Plan
for purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, or (v) the Borrower, any
Restricted Subsidiary or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Majority Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, any Multiemployer Plan; and in each case in clauses
(i) through (v) above, such event or condition, together with all other
such events or conditions, if any, could have a Material Adverse Effect;
or
(h) (i) VS&A Communications Partners II, L.P., a Delaware limited
partnership, together with its Affiliates shall fail at any time to own
at least 51% of the voting interests in VS&A-T/SF, (ii) VS&A-T/SF
together with its Affiliates, shall fail at any time to own at least 51%
of the voting interests of the Borrower or at least 51% of the common
interests of Holdings LLC, (iii) the Borrower shall fail to own the LLC
Preferred Stock, (iv) the Borrower shall at any time fail to own 100% of
the capital stock of each of its Subsidiaries which are Guarantors, (v)
the Borrower shall at any time fail to own at least 51% of the voting
interests in each Non-Guarantor Restricted Subsidiary, (vi) Holdings LLC
shall at any time fail to own 100% of the capital stock or interests of
each of its Subsidiaries or (vii) the occurrence of a Change of Control
under any of the Subordinated Debt Documents; or
(i) Any other Credit Document shall fail to be in full force and
effect or to give the Administrative Agent and/or the Lenders the
security interests, liens, rights, powers and privileges purported to be
created thereby and such failure shall have a material adverse effect on
the rights and remedies of the Administrative Agent or the
58
Lenders thereunder (except to the extent any such failure is caused by
------
the Administrative Agent and except as such documents may be terminated
------
or no longer in force and effect in accordance with the terms thereof,
other than those indemnities and provisions which by their terms shall
survive);
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (e) above, automatically the Revolving Commitments shall
immediately terminate and the Revolving Loans (with accrued interest thereon),
and all other amounts under the Credit Documents shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the written consent of the
Majority Lenders, the Administrative Agent may, or upon the written request of
the Majority Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving Commitments shall immediately terminate; and (ii) with the written
consent of the Majority Lenders, the Administrative Agent may, or upon the
written request of the Majority Lenders, the Administrative Agent shall, by
notice of default to the Borrower, declare the Revolving Loans (with accrued
interest thereon) and all other amounts owing under this Agreement and the
Revolving Notes to be due and payable forthwith, whereupon the same shall
immediately become due and payable. Except as expressly provided above in this
Section 7, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
-----------
First Union National Bank as the Administrative Agent of such Lender under this
Agreement, and each such Lender irrevocably authorizes First Union National
Bank, as the Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and to exercise such powers and
perform such duties as are expressly delegated to the Administrative Agent by
the terms of this Agreement, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and in the other
Credit Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
8.2 Delegation of Duties. The Administrative Agent may execute any of
--------------------
its duties under this Agreement by or through agents or attorneys-in-fact and
shall be entitled to rely on advice of counsel concerning all matters pertaining
to such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care. Without limiting the foregoing, the Administrative Agent may
appoint an Affiliate as its agent to perform the functions of the Administrative
Agent hereunder relating to the advancing of funds to the Borrower and
distribution of funds to the Lenders and to perform such other related functions
of the Administrative Agent hereunder as are
59
reasonably incidental to such functions. No such appointment shall relieve the
Administrative Agent of its responsibilities hereunder.
8.3 Exculpatory Provisions. Neither the Administrative Agent nor any of
----------------------
its officers, directors, employees, agents, attorneys-in-fact or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Borrower or any officer thereof contained in this
Agreement or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of any of the Credit Documents or for
any failure of the Borrower to perform its obligations hereunder or thereunder.
The Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance by the Borrower of
any of the agreements contained in, or conditions of, this Agreement, or to
inspect the properties, books or records of the Borrower.
8.4 Reliance by Administrative Agent. The Administrative Agent shall be
--------------------------------
entitled to rely, and shall be fully protected in relying, upon any Revolving
Note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel (including, without limitation,
counsel to the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Revolving Note as the owner thereof for all purposes unless (a) a written
notice of assignment, negotiation or transfer thereof shall have been filed with
the Administrative Agent and (b) the Administrative Agent shall have received
the written agreement of such assignee to be bound hereby as fully and to the
same extent as if such assignee were an original Lender party hereto, in each
case in form satisfactory to the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under any of the Credit Documents in accordance with a
request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Revolving Notes.
8.5 Notice of Default. The Administrative Agent shall not be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent receives such a notice, the Administrative Agent shall
give prompt notice thereof to each of the Lenders. The Administrative Agent
shall
60
take such action with respect to such Default or Event of Default as shall
be directed by the Majority Lenders, including, without limitation, exercise of
remedies and initiation of litigation; provided, however, that unless and until
-------- -------
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders.
8.6 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
------------------------------------------------------
expressly acknowledges that neither the Administrative Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates has made
any representation or warranty to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of the Borrower, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender. Each Lender represents to the Administrative Agent that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and made its own decision to make its Revolving Loans hereunder and
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Borrower which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 Indemnification. The Lenders agree to indemnify the Administrative
---------------
Agent in its capacity hereunder (to the extent not reimbursed by the Borrower
and without limiting the obligation of the Borrower to do so), ratably according
to their respective Revolving Commitment Percentages in effect on the date on
which indemnification is sought under this subsection, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Revolving Notes) be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of any Credit
Document or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by the Administrative Agent under or in connection with any of the foregoing;
provided, however, that no Lender shall be liable for the payment of any portion
-------- -------
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent resulting from
the Administrative Agent's gross negligence or willful
61
misconduct. The agreements in this subsection shall survive the termination of
this Agreement and payment of the Revolving Notes and all other amounts payable
hereunder.
8.8 Administrative Agent in Its Individual Capacity. The Administrative
-----------------------------------------------
Agent and its Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower as though the Administrative
Agent were not the Administrative Agent hereunder. With respect to its Revolving
Loans made or renewed by it and any Revolving Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
8.9 Successor Administrative Agent. The Administrative Agent may resign
------------------------------
or be removed as Administrative Agent upon 30 days' prior notice to the Borrower
and the Lenders. The Administrative Agent may be removed by the written consent
of the Majority Lenders. If the Administrative Agent shall resign or be removed
as Administrative Agent under this Agreement and the Revolving Notes, then the
Majority Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be approved by the Borrower, or if the
Majority Lenders cannot agree on a successor within 30 days from the notice of
resignation by the Administrative Agent, the Administrative Agent may appoint a
bank or trust company with capital and surplus of at least $500,000,000 as
successor Administrative Agent within 30 days thereafter, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Notes. After any retiring Administrative Agent's resignation or
renewal as Administrative Agent, the provisions of this subsection shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement. Resignation by the Administrative
Agent shall become effective upon appointment of, and acceptance by, a successor
Administrative Agent, or the passage of the applicable periods without
appointment of a successor.
SECTION 9. MISCELLANEOUS
9.1 Amendments, Waivers and Release of Collateral. Neither this
---------------------------------------------
Agreement, nor any of the Revolving Notes, nor any of the other Credit
Documents, nor any terms hereof or thereof may be amended, supplemented, waived
or modified except in accordance with the provisions of this subsection nor may
Collateral be released except as specifically provided herein or in the Security
Agreement or in accordance with the provisions of this subsection. The Majority
Lenders affected thereby may, or, with the written consent of the Majority
Lenders affected thereby, the Administrative Agent may, from time to time, (a)
enter into with the Borrower written amendments, supplements or modifications
hereto and to the other Credit Documents for the purpose of adding any
provisions to this Agreement or the other Credit
62
Documents or (b) waive, on such terms and conditions as the Majority Lenders may
specify in such instrument, any of the requirements of this Agreement or the
other Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, waiver,
-------- -------
supplement, modification or release shall (i) reduce the amount or extend the
scheduled final date of maturity of any Revolving Loan or Revolving Note or any
installment thereon, or reduce the stated rate of any interest or fee payable
hereunder (other than interest at the increased post-default rate) or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Lender's Revolving Commitment, in each case without the
written consent of each Lender directly affected thereby, or (ii) amend, modify
or waive any provision of this subsection or reduce the percentage specified in
the definition of Majority Lenders, or consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement, in each
case without the written consent of all the Lenders, or (iii) amend, modify or
waive any provision of Section 8 without the written consent of the then
Administrative Agent, or (iv) release all or substantially of the collateral
without the written consent of all of the Lenders except to the extent such
releases are provided for in this Agreement or the other Credit Documents. Any
such waiver, any such amendment, supplement or modification and any such release
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the Lenders, the Administrative Agent and all future holders of the
Revolving Notes. In the case of any waiver, the Borrower, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans and Revolving Notes and other Credit
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
9.2 Notices. Except as otherwise provided in Section 2, all notices,
-------
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (i) when
delivered by hand, (ii) when transmitted via telecopy (or other facsimile
device) on a Business Day between the hours of 10:00 A.M. and 7:00 P.M. (EST or
EDT, as appropriate) (or on the following Business Day if sent after 7:00 P.M.)
to the number set out herein, (iii) the day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (iv) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case, addressed
as follows in the case of the Borrower and the Administrative Agent, and as set
forth on Schedule 9.2 in the case of the Lenders, or to such other address as
------------
may be hereafter notified by the respective parties hereto and any future
holders of the Notes:
The Borrower: c/o VS&A Communications Partners II, L.P.
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Mr. S. Xxxxxx Xxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
63
The Administrative
Agent: First Union National Bank
c/o First Union Capital Markets Group
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-00000
Attention: Xxxxx Xxxxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
First Union Capital Markets Group
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
------------------------------
in exercising, on the part of the Administrative Agent or any Lender, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
9.4 Survival of Representations and Warranties. All representations and
------------------------------------------
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement and the Revolving Notes and the making of the
Revolving Loans, provided that all such representations and warranties shall
--------
terminate on the date upon which the Revolving Commitments have been terminated
and all amounts owing hereunder and under any Revolving Notes have been paid in
full.
9.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or
-----------------------------
reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the preparation and execution of, and
any amendment, supplement or modification to, the Credit Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, together
with the reasonable fees and disbursements of counsel to the Administrative
Agent, (b) to pay or reimburse each Lender and the Administrative Agent for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the Revolving Notes and any
such other documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent and to
64
the Lenders (including reasonable allocated costs of in-house legal counsel),
and (c) on demand, to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, the Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and the Administrative Agent and their
Affiliates harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of the Credit
Documents and any such other Documents and the use, or proposed use, of proceeds
of the Loans (all the foregoing, collectively, the "indemnified liabilities");
-----------------------
provided, however, that the Borrower shall not have any obligation hereunder to
-------- -------
the Administrative Agent or any Lender with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the
Administrative Agent or any such Lender, (ii) legal proceedings commenced
against the Administrative Agent or any such Lender by any security holder or
creditor thereof arising out of and based upon rights afforded such security
holder or creditor solely in its capacity as such, (iii) legal proceedings
commenced against the Administrative Agent or any Lender by any other Lender or
the Administrative Agent or its participants or (iv) a breach of any of the
Credit Documents by the Lenders. The agreements in this subsection shall survive
repayment of the Revolving Loans, Revolving Notes and all other amounts payable
hereunder.
9.6 Successors and Assigns; Participations; Purchasing Lenders.
----------------------------------------------------------
(a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Administrative Agent, all future
holders of the Revolving Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement or the other Credit Documents
without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell
to one or more banks or other entities ("Participants") participating
------------
interests in any Revolving Loan owing to such Lender, any Revolving Note
held by such Lender, any Revolving Commitment of such Lender, or any
other interest of such Lender hereunder. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for
the performance thereof, such Lender shall remain the holder of any such
Revolving Note for all purposes under this Agreement, and the Borrower
and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve
any amendment to or waiver of this Agreement or
65
any other Credit Document except to the extent such amendment or waiver
would (i) extend the final maturity of any Revolving Loan or Revolving
Note in which such Participant is participating, or reduce the stated
rate or extend the time of payment of interest or Fees thereon (except
in connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount of
the Participant's participation over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and
that an increase in any Revolving Commitment or Revolving Loan shall be
permitted without consent of any Participant if the Participant's
participation is not increased as a result thereof), (ii) except as
otherwise expressly provided in a Credit Document, release all or
substantially all of the collateral, or (iii) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under
this Agreement. In the case of any such participation, the Participant
shall not have any rights under this Agreement or any of the other
Credit Documents (the Participant's rights against such Lender in
respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as
if such Lender had not sold such participation, provided that each
--------
Participant shall be entitled to the benefits of subsections 2.13, 2.14,
2.15 and 9.5 with respect to its participation in the Revolving
Commitments and the Revolving Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive any greater
--------
amount pursuant to such subsections than the transferor Lender would
have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time sell
or assign to any Lender or any affiliate thereof and, so long as no
Event of Default has occurred and is continuing with the consent of the
Administrative Agent and the Borrower (in each case, which consent shall
not be unreasonably withheld), to one or more additional banks or
financial institutions ("Purchasing Lenders"), all or any part of its
------------------
rights and obligations under this Agreement and the Revolving Notes in
minimum amounts of $5,000,000 (or, if less, the entire amount of such
Lender's obligations) if the Purchasing Lender is not a Lender
hereunder, or with no minimum amount if the Purchasing Lender is a
Lender hereunder, pursuant to a Commitment Transfer Supplement, executed
by such Purchasing Lender, such transferor Lender (and, in the case of a
Purchasing Lender that is not then a Lender or an affiliate thereof so
long as no Event of Default has occurred and is continuing, by the
Borrower and the Administrative Agent), and delivered to the
Administrative Agent for its acceptance and recording in the Register.
Each such assignment must be of a constant, not varying, percentage of
all of such Lender's rights and obligations hereunder. Upon such
execution, delivery, acceptance and recording, from and after the
Transfer Effective Date specified in such Commitment Transfer
Supplement, (x) the Purchasing Lender thereunder shall be a party hereto
and, to the extent provided in such Commitment Transfer Supplement, have
the rights and obligations of a Lender hereunder with a Revolving
Commitment as set forth therein, and (y) the transferor Lender
thereunder
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shall, to the extent provided in such Commitment Transfer Supplement, be
released from its obligations under this Agreement (and, in the case of
a Commitment Transfer Supplement covering all or the remaining portion
of a transferor Lender's rights and obligations under this Agreement,
such transferor Lender shall cease to be a party hereto). Such
Commitment Transfer Supplement shall be deemed to amend this Agreement
to the extent, and only to the extent, necessary to reflect the addition
of such Purchasing Lender and the resulting adjustment of Revolving
Commitment Percentages arising from the purchase by such Purchasing
Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Revolving Notes. On or
prior to the Transfer Effective Date specified in such Commitment
Transfer Supplement, the Borrower, at its own expense, shall execute and
deliver to the Administrative Agent in exchange for the Revolving Note
delivered to the Administrative Agent pursuant to such Commitment
Transfer Supplement a new Revolving Note to the order of such Purchasing
Lender in an amount equal to the Revolving Commitment assumed by it
pursuant to such Commitment Transfer Supplement and, unless the
transferor Lender has not retained a Revolving Commitment hereunder, a
new Revolving Note to the order of the transferor Lender in an amount
equal to the Revolving Commitment retained by it hereunder. Such new
Revolving Note shall be dated the Closing Date and shall otherwise be in
the form of the Revolving Note replaced thereby. The Revolving Note
surrendered by the transferor Lender shall be returned by the
Administrative Agent to the Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address
referred to in subsection 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
--------
recordation of the names and addresses of the Lenders and the Revolving
Commitment of, and principal amount of the Revolving Loans owing to,
each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Revolving Loan recorded
therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement executed
by a transferor Lender and a Purchasing Lender (and, in the case of a
Purchasing Lender that is not then a Lender or an affiliate thereof, by
the Borrower and the Administrative Agent) together with payment to the
Administrative Agent (by the transferor Lender or the Purchasing Lender,
as agreed between them) of a registration and processing fee of $2,500
for each Purchasing Lender listed in such Commitment Transfer
Supplement, and the Revolving Notes subject to such Commitment Transfer
Supplement, the Administrative Agent shall (i) accept such Commitment
Transfer Supplement, (ii) record the information contained therein in
the Register and (iii) give prompt notice of such acceptance and
recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any
----------
prospective Transferee any and all
67
financial information in such Lender's possession concerning the
Borrower and its Affiliates which has been delivered to such Lender by
or on behalf of the Borrower pursuant to this Agreement or which has
been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement; in each case
subject to subsection 9.14.
(g) At the time of each assignment pursuant to this subsection
9.6 to a Person which is not already a Lender hereunder and which is not
a United States person (as such term is defined in Section 7701(a)(30)
of the Code) for Federal income tax purposes, the respective assignee
Lender shall provide to the Borrower and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a 2.15
Certificate) described in subsection 2.15.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of principal and interest under any
Revolving Note) to any Federal Reserve Agent in accordance with
applicable laws.
9.7 Adjustments; Set-off.
--------------------
(a) Each Lender agrees that if any Lender (a "benefited Lender")
----------------
shall at any time receive any payment of all or part of its Revolving
Loans, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in clause (e) of Section 7, or
otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such
other Lender's Revolving Loans, or interest thereon, such benefited
Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Revolving Loan, or
shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
benefited Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided,
--------
however, that if all or any portion of such excess payment or benefits
-------
is thereafter recovered from such benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Loans may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to the
Borrower, any such notice being expressly waived by the Borrower to the
extent permitted by applicable law, upon the occurrence of any Event of
Default, to setoff and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or
68
claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing
by such Lender or any branch or agency thereof to or for the credit or
the account of the Borrower, or any part thereof in such amounts as such
Lender may elect, against and on account of the obligations and
liabilities of the Borrower to such Lender hereunder and claims of every
nature and description of such Lender against the Borrower, in any
currency, whether arising hereunder, under the Revolving Notes or under
any documents contemplated by or referred to herein or therein, as such
Lender may elect, whether or not such Lender has made any demand for
payment and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be exercised
by such Lender against the Borrower or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of the Borrower,
or against anyone else claiming through or against the Borrower or any
such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off shall not
have been exercised by such Lender prior to the occurrence of any Event
of Default. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall
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not affect the validity of such set-off and application.
9.8 Table of Contents and Section Headings. The table of contents and
--------------------------------------
the Section and subsection headings herein are intended for convenience only and
shall be ignored in construing this Agreement.
9.9 Counterparts. This Agreement may be executed by one or more of the
------------
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the copies of this Agreement signed by all the parties
shall be lodged with the Borrower and the Administrative Agent.
9.10 Severability. Any provision of this Agreement which is prohibited
------------
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.11 Integration. This Agreement and the Revolving Notes represent the
-----------
agreement of the Borrower, the Administrative Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrower or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the Notes.
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9.12 Governing Law. This Agreement and the Notes and the rights and
-------------
obligations of the parties under this Agreement and the Revolving Notes shall be
governed by, and construed and interpreted in accordance with, the law of the
State of North Carolina.
9.13 Arbitration; Consent to Jurisdiction and Service of Process.
-----------------------------------------------------------
(a) Upon demand of any party hereto, whether made before or after
institution of any judicial action, any dispute, claim or controversy
arising out of or connected herewith or with the Credit Documents
("Disputes") shall be resolved by binding arbitration as provided
herein. Disputes may include, without limitation, tort claims,
counterclaims, claims brought as class actions and claims arising
herefrom or from Credit Documents executed in the future. Arbitration
shall be conducted under the Commercial Financial Disputes Arbitration
Rules (the "Arbitration Rules") of the American Arbitration Association
and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, Mecklenburg County, North Carolina, or such
other place as agreed to in writing by the parties. A judgment upon the
award may be entered in any court having jurisdiction, and all decisions
shall be in writing. The panel from which all arbitrators are selected
shall be comprised of licensed attorneys having at least ten years'
experience representing parties in secured lending transactions.
Notwithstanding the foregoing, this arbitration provision does not apply
to disputes under or related to Interest Protection Agreements.
(b) Notwithstanding the preceding binding arbitration provision,
the Administrative Agent, on behalf of the Lenders, preserves certain
remedies that may be exercised during a Dispute. The Administrative
Agent, on behalf of the Lenders, shall have the right to proceed in any
court of proper jurisdiction or by self help to exercise or prosecute
the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a
power of sale granted in the Credit Documents or under applicable law,
(ii) all rights of self help including peaceful occupation of real
property and collection of rents, set-off and peaceful possession of
personal property, (iii) obtaining provisional or ancillary remedies
including injunctive relief, sequestration, garnishment, attachment and
appointment of receiver, (iv) when applicable, a judgment by confession
of judgment and (v) other remedies. Preservation of these remedies does
not limit the power of an arbitrator to grant similar remedies that may
be requested by a party in a Dispute.
(c) By execution and delivery of this Agreement, each of the
parties hereto accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted under the
Arbitration Rules in Charlotte, Mecklenburg County, North Carolina and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Agreement from which no appeal has been taken or is
available. Each of the parties hereto irrevocably agrees that all
process in any such arbitration proceedings or otherwise may be effected
by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its
address set forth herein) or
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at such other address of which such party shall have been notified
pursuant thereto, such service being hereby acknowledged by each party
hereto to be effective and binding service in every respect. Each party
hereto irrevocably waives any objection, including, without limitation,
any objection to the laying of venue or based on the grounds of forum
non conveniens which it may now or hereafter have to the bringing of any
such action or proceeding in any such jurisdiction. Nothing herein shall
affect the right to serve process in any other manner permitted by law.
9.14 Confidentiality. The Administrative Agent and each of the Lenders
---------------
agrees that it will use reasonable and customary efforts not to disclose without
the prior consent of the Borrower (other than to its employees, Subsidiaries,
Affiliates, auditors or counsel or to another Lender) any information with
respect to the Borrower and its Subsidiaries which is furnished pursuant to this
Agreement, any other Credit Document or any documents contemplated by or
referred to herein or therein and which is designated by the Borrower to the
Lenders in writing as confidential or as to which it is otherwise reasonably
clear such information is not public, except that any Lender may disclose any
such information (a) as has become generally available to the public other than
by a breach of this subsection 9.14, (b) as may be required or appropriate in
any report, statement or testimony submitted to any municipal, state or federal
regulatory body having or claiming to have jurisdiction over such Lender or to
the Federal Reserve Board or the Federal Deposit Insurance Corporation or the
OCC or similar organizations (whether in the United States or elsewhere) or
their successors or the National Association of Insurance Commissioners, (c) as
may be required or appropriate in response to any summons or subpoena or any
law, order, regulation or ruling applicable to such Lender, or (d) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 9.6, provided that such prospective transferee shall have
--------
been made aware of this Section 9.14 and shall have agreed to be bound by its
provisions as if it were a party to this Agreement.
9.15 Acknowledgments. The Borrower hereby acknowledges that:
---------------
(a) it has been advised by counsel in the negotiation, execution
and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower arising out of or in
connection with this Agreement and the relationship between
Administrative Agent and Lenders, on one hand, and the Borrower, on the
other hand, in connection herewith is solely that of debtor and
creditor; and
(c) no joint venture exists among the Lenders or among the
Borrower and the Lenders.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
T/SF COMMUNICATIONS CORPORATION,
AS BORROWER
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
[Signatures continued on the following page]
Credit Agreement
T/SF Communications Corporation
FIRST UNION NATIONAL BANK,
AS AGENT AND AS A LENDER
By:
----------------------------
Name:
----------------------------
Title:
----------------------------
Credit Agreement
T/SF Communications Corporation