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EXHIBIT 10.30
CREDIT AGREEMENT
AGREEMENT, dated as of December 15, 1997, among WEST COAST
ENTERTAINMENT CORPORATION, (the "Company"), VIDEOSMITH INCORPORATED, WEST COAST
FRANCHISING COMPANY, PALMER WEST COAST CORPORATION, ▇▇▇▇▇▇ VIDEO CORPORATION,
▇▇▇▇▇▇ INVESTMENT CORPORATION, CASABLANCA DISTRIBUTING CORPORATION, RKT MERGER
CO., SHOWTIME, INC., VIDEO GIANT INC., VIDEO KING OF ▇▇▇▇▇▇ COUNTY, INC., KING
VIDEO ENTERPRISES, INC., WEST COAST FINANCING CORPORATION, WEST COAST LICENSING
CORPORATION, those certain direct or indirect subsidiaries of the Company which
from time to time may become parties hereto pursuant to subsection 5.13 (all of
the above, collectively, the "Borrowers"), the several banks and other financial
institutions from time to time parties hereto (the "Banks") and PNC BANK,
NATIONAL ASSOCIATION, as agent for the Banks hereunder (in such capacity, the
"Agent").
W I T N E S S E T H:
WHEREAS, certain of the Borrowers, the Banks and the Agent are
parties to the Existing Credit Agreement (as defined below); and
WHEREAS, the indebtedness outstanding under the Existing
Credit Agreement is being refinanced by this Agreement, which amends and
restates the Existing Credit Agreement.
NOW, THEREFORE, in consideration of the promises and the
agreements hereinafter set forth, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Affiliate": as to any Person, any other Person which,
directly or indirectly, through one or more intermediaries, controls,
or is controlled by, or is under common control with, such Person and
any member, director, officer or employee of any such Person. For
purposes of this definition, "control" shall mean the power, directly
or indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or
(b) direct or in effect cause the direction of the management and
policies of such Person whether by contract or otherwise.
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"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Applicable Margin": on any date, for a Base Rate Tranche A
Loan, Base Rate Tranche B Loan, Eurodollar Tranche A Loan or Eurodollar
Tranche B Loan, the percentage per annum set forth below in the column
entitled Base Rate or Eurodollar Rate, as appropriate, opposite the
Total Debt/OCF Ratio shown on the last Total Debt/OCF Ratio Certificate
delivered by the Borrowers to the Agent pursuant to subsection 5.2(c)
prior to such date:
Level Total Debt/OCF Ratio Base Rate Eurodollar Rate
----- -------------------- --------- ---------------
Tranche A Tranche B Tranche A Tranche B
Loans Loans Loans Loans
----- ----- ----- -----
I Less than 1.25 to 1 .25% 2.25% 1.75% 3.75%
II Less than 1.75 to 1 but greater .50% 2.50% 2.00% 4.00%
than or equal to 1.25 to 1
III Less than 2.25 to 1 but greater .75% 2.75% 2.25% 4.25%
than or equal to 1.75 to 1
IV Less than 3.00 to 1 but greater 1.00% 3.00% 2.50% 4.50%
than or equal to 2.25 to 1
V Less than 3.75 to 1 but greater 1.25% 3.25% 2.75% 4.75%
than or equal to 3.00 to 1
VI Greater than or equal to 3.75 1.50% 3.50% 3.00% 5.00%
to 1
; provided, however, that (a) in the event that no Total Debt/OCF Ratio
Certificate has been delivered for a fiscal quarter prior to the last
date on which it can be delivered without violation of subsection
5.2(c), the Applicable Margin from such date until such Total Debt/OCF
Ratio Certificate is actually delivered shall be that applicable when
the Total Debt/OCF Ratio is equal to or greater than 3.75 to 1 (i.e.,
Level VI), (b) in the event that the actual Total Debt/OCF Ratio for
any fiscal period is subsequently determined to be greater than that
set forth in the Total Debt/OCF Ratio Certificate for such fiscal
period, the Applicable Margin shall be recalculated for the applicable
period based upon such actual Total Debt/OCF Ratio and (c) anything in
this definition to the contrary notwithstanding, until receipt by the
Agent of the Total Debt/OCF Ratio Certificate for the fiscal quarter
ended October 31, 1997, the Applicable Margin shall be that applicable
when the Total Debt/OCF Ratio is at Level VI. Any additional interest
on the Loans resulting from the operation of clause (b) above shall be
payable by the Borrowers jointly and severally to the Banks within five
(5) days after receipt of a written demand therefor from the Agent.
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"Application": in respect of each Letter of Credit issued by
an Issuing Bank, an application, in such form as such Issuing Bank may
specify from time to time, requesting issuance of such Letter of
Credit.
"Asset Sale": means any sale, lease, transfer or other
disposition of assets (each referred to for the purposes of this
definition as a "disposition") by the Company or any Subsidiary (other
than a disposition by a Borrower to a different Borrower), other than
(a) dispositions of inventory in the ordinary course of business, (b)
dispositions of surplus or obsolete inventory or equipment, waste or
by-product material in the ordinary course of business and (c)
dispositions of Permitted Investments.
"Assignment and Acceptance": an assignment and acceptance
entered into by a Bank and a Purchasing Bank, and accepted by the
Agent, in the form of Exhibit B attached hereto, or such other form as
shall be approved by the Agent.
"Available Commitments": at any particular time, an amount
equal to the excess, if any, of (a) the Total Commitments at such time
over (b) the sum of (i) the aggregate unpaid principal amount of the
Loans outstanding at such time and (ii) the aggregate L/C Obligations
then outstanding.
"Available Tranche A Commitments": at any particular time, an
amount equal to the excess, if any, of the (a) Tranche A Commitments at
such time over (b) the sum of (i) the aggregate unpaid principal amount
of the Tranche A Loans outstanding at such time and (ii) the aggregate
L/C Obligations then outstanding.
"Available Tranche B Commitments": at any particular time, an
amount equal to the excess, if any, of the (a) Tranche B Commitments at
such time over (b) aggregate unpaid principal amount of the Tranche B
Loans outstanding at such time.
"Base Rate": for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any
reason the Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate for any reason, including the inability or
failure of the Agent to obtain sufficient quotations in accordance with
the definition of such term, the Base Rate shall be determined without
regard to clause (b) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change
in the
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Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change
in the Prime Rate or the Federal Funds Effective Rate, as the case may
be.
"Base Rate Loan": a Loan bearing interest at a rate determined
by reference to the Base Rate. A Base Rate Loan shall either be a Base
Rate Tranche A Loan or a Base Rate Tranche B Loan.
"Base Rate Tranche A Loan": a Tranche A Loan which is a Base
Rate Loan.
"Base Rate Tranche B Loan": a Tranche B Loan which is a Base
Rate Loan.
"Borrowing Date": any Business Day on which a Loan is to be
made at the request of the Borrowers under this Agreement.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in Philadelphia, Pennsylvania are
authorized or required by law to close; provided, however, that, when
used in connection with a Eurodollar Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
dollar deposits in the London Interbank Market.
"Capital Expenditure": an expenditure for any fixed asset or
any improvements or additions thereto, including direct or indirect
acquisition of such asset, which expenditure is capitalized in
accordance with GAAP.
"Capital Expenditures Projection Letter": the letter dated the
Closing Date from the Company to the Agent setting forth the projected
capital expenditures of the Borrowers.
"Capital Lease": at any time, a lease with respect to which
the lessee is required to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"Capital Lease Obligations": of any Person as of the date of
determination, the obligations of such Person to pay rent and other
amounts under any Capital Lease.
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
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"Cash Flow": for any period and with respect to any business
or segment acquired by a Borrower, the net income (or loss) before
income tax for such business or segment determined in accordance with
GAAP plus the amount of any interest expense, depreciation and
amortization deducted from earnings in determining such net income (or
loss) minus the greater of (a) the aggregate purchase price for all
rental video cassettes, rental digital video discs and rental game
inventory purchases (or like inventory purchases) (other than Core
Inventory Purchases) for such period by such business or segment and
(b) an amount equal to 22.5% of the gross revenue of such business or
segment derived in such period from the rental of videos, digital video
discs, game cassettes or any other similar merchandise as determined in
accordance with GAAP; provided that, there also shall be excluded from
such net income (or loss) (a) any addition for non-operating gains
during such period (including without limitation, extraordinary or
unusual gains, gains arising from the discontinuance of operations or
gains arising from the sale of capital assets) and (b) any subtraction
for non-operating losses during such period (including, without
limitation, extraordinary or unusual losses, losses from the
discontinuance of operations or losses arising from the sale of capital
assets).
"Change of Control": (a) any Person or group of Persons
(within the meaning of Sections 13(d) and 14(d) of the Exchange Act)
(other than any combination of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III, M. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ and/or T. ▇▇▇▇ ▇▇▇▇▇▇▇▇, the Company's existing executive
officers, the Company's Continuing Directors and trusts for the benefit
of themselves and their family members) shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of 20% or
more of the outstanding shares of any class of outstanding common stock
of the Company or (b) Continuing Directors shall cease to constitute a
majority of the board of directors of the Company. "Continuing
Director" shall mean at any date a member of the Company's board of
directors who was either a member of such board on the Closing Date or
was nominated for election to such board by at least two-thirds of the
Continuing Directors then in office.
"Closing": as defined in subsection 4.3.
"Closing Date": as defined in subsection 4.3.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Borrower or
Guarantor in or upon which a lien shall be
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created or purported to be created under any of the Security Documents.
"Commitment Holdback Amount": (a) for the period from November
1, 1998 to December 15, 1998, $3,000,000; (b) for the period from
February 1, 1999 to May 1, 1999, $2,000,000; and (c) for the period
from May 1, 1999 to June 15, 1999, $2,000,000.
"Commitments": as to any Bank, the Tranche A Commitment and
the Tranche B Commitment of such Bank.
"Commitment Fees": those certain fees payable to the Banks on
the Available Commitments as described in subsection 2.12(a) .
"Commitment Fee Rate": on each day during each fiscal quarter
of the Company, the percentage per annum set forth below opposite the
Total Debt/OCF Ratio shown on the last Total Debt/OCF Ratio Certificate
delivered to the Agent pursuant to subsection 5.2(c) prior to such
date:
Level Total Debt/OCF Ratio Commitment Fee Rate
----- -------------------- -------------------
I Less than 1.25 to 1 .30%
II Less than 1.75 to 1 but
greater than or equal to
1.25 to 1 .35%
III Less than 2.25 to 1 but
greater than or equal to
1.75 to 1 .40%
IV Less than 3.00 to 1 but
greater than or equal to
2.25 to 1 .45%
V Less than 3.75 to 1 but
greater than or equal to
3.00 to 1 .50%
VI Greater than or equal to
3.75 to 1 .50%
; provided, however, that, (a) in the event that no Total Debt/OCF
Ratio Certificate has been delivered prior to the last day on which it
can be delivered without violation of subsection 5.2(c), the Commitment
Fee Rate from such date until such Total Debt/OCF Ratio Certificate is
actually delivered shall be that applicable when the Total Debt/OCF
Ratio is equal to or greater than 3.75 to 1 (i.e., Level VI), (b) in
the event that the actual Total Debt/OCF Ratio for any
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fiscal period is subsequently determined to be greater than that set
forth in the Total Debt/OCF Ratio Certificate for such fiscal period,
the Commitment Fee Rate shall be recalculated for such fiscal period
based upon such actual Total Debt/OCF Ratio and (c) anything in this
definition to the contrary notwithstanding, until receipt by the Agent
of the Total Debt/OCF Ratio Certificate for the fiscal quarter ended
October 31, 1997, the Commitment Fee Rate shall be that applicable when
the Total Debt/OCF Ratio is at Level VI. Any additional Commitment Fees
that are due to the Banks resulting from the operation of clause (b)
above shall be payable by the Borrowers jointly and severally within
five (5) days after receipt of a written demand therefor from the
Agent.
"Commitment Percentage": as to any Bank at any time, the
percentage which such Bank's Commitments then constitutes of the Total
Commitments at such time (or, at any time after the Total Commitments
shall have expired or terminated, the percentage which the amount of
such Bank's Exposure constitutes of the Exposure of all of the Banks at
such time).
"Commitment Period": the period from and including the date
hereof to but not including the Termination Date, or such earlier date
on which the Commitments shall terminate as provided herein.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section
414(b), (c), (m) or (o) of the Code.
"Consolidated Fixed Charges": without duplication, for any
period, (a) Consolidated Interest Expense for such period, plus (b)
federal and state income taxes paid in cash with respect to such period
plus (c) scheduled principal payments of Indebtedness (including under
Capital Leases) in such period, all as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Interest Expense": for any period, the amount of
cash interest expense paid or required to be paid by the Company and
its Subsidiaries for such period in accordance with GAAP.
"Consolidated Net Income": for any fiscal period, the net
income (or loss) after income taxes of the Company and its Subsidiaries
for such period determined on a consolidated basis in accordance with
GAAP.
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"Consolidated Net Worth": as of the date of determination, all
items which in conformity with GAAP would be included under
shareholders' equity on a consolidated balance sheet of the Company and
its Subsidiaries at such date.
"Contingent Obligation": as to any Person any guarantee of
payment or performance by such Person of any Indebtedness or other
obligation of any other Person, or any agreement to provide financial
assurance with respect to the financial condition, or the payment of
the obligations of, such other Person (including, without limitation,
purchase or repurchase agreements, reimbursement agreements with
respect to letters of credit or acceptances, indemnity arrangements,
grants of security interests to support the obligations of another
Person, keepwell agreements and take-or-pay or through-put
arrangements) which has the effect of assuring or holding harmless any
third Person against loss with respect to one or more obligations owed
to such third Person; provided, however, the term Contingent Obligation
shall not include endorsements of instruments for deposit or collection
in the ordinary course of business. The amount of any Contingent
Obligation of any 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 Contingent Obligation is made and
(b) the maximum amount for which such contingently liable Person may be
liable pursuant to the terms of the instrument embodying such
Contingent Obligation, unless such primary obligation and the maximum
amount for which such contingently liable Person may be liable are not
stated or determinable, in which case the amount of such Contingent
Obligation shall be such contingently liable Person's maximum
reasonably anticipated liability in respect thereof as determined by
the Company in good faith.
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or any provision of any agreement,
instrument or other undertaking to which such Person is a party or by
which it or any of its property is bound.
"Core Inventory Purchases": with respect to any Person, rental
video cassettes, rental digital video discs and rental game inventory
purchases (or like inventory purchases) by such Person to initially
stock new video stores opened by such Person (including relocated
stores) or to provide additional catalog title for just acquired stores
by such Person.
"Default": any of the events specified in Section 7, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition precedent
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therein set forth, has been satisfied.
"Distribution": in respect of any corporation, (a) dividends
or other distributions on Capital Stock of the corporation (except
distributions in common stock of such corporation); (b) the redemption
or acquisition of such stock or of warrants, rights or other options to
purchase such stock (except when solely in exchange for common stock of
such corporation); and (c) any payment on account of, or the setting
apart of any assets for a sinking or other analogous fund for, the
purchase, redemption, defeasance, retirement or other acquisition of
any share of any class of Capital Stock of such corporation or any
warrants or options to purchase any such stock.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Environmental Laws": any and all foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or binding requirements of any Governmental
Authority, or binding Requirement of Law regulating, relating to or
imposing liability or standards of conduct concerning protection of the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Base Rate": with respect to any Eurodollar Loan
for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100th of 1%) equal to the rate determined
by the Agent in accordance with its usual procedures at which deposits
in Dollars approximately equal in principal amount to the Agent's
portion of such Eurodollar Loan for a maturity equal to the applicable
Interest Period are offered by banks in the London Interbank Market to
prime banks in immediately available funds in the London Interbank
Market at approximately 11:00 a.m., London Time, two Business Days
prior to the
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commencement of such Interest Period.
"Eurodollar Loan": a Loan bearing interest at a rate
determined by reference to the Eurodollar Rate. A Eurodollar Loan shall
either be a Eurodollar Tranche A Loan or a Eurodollar Tranche B Loan.
"Eurodollar Rate": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche A Loan": a Tranche A Loan which is a
Eurodollar Loan.
"Eurodollar Tranche B Loan": a Tranche B Loan which is a
Eurodollar Loan.
"Event of Default": any of the events specified in Section 7,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Exchange Act": the Securities and Exchange Act of 1934, as
amended.
"Existing Credit Agreement": means the Credit Agreement, dated
as of May 17, 1996, among the Company, certain of the Borrowers, the
banks and other financial institutions parties thereto and PNC Bank,
National Association, as agent, as heretofore amended, supplemented or
otherwise modified.
"Existing Indebtedness": the collective reference to the
Existing Principal Indebtedness and the other amounts payable under the
Existing Credit Agreement by all or a portion of the Borrowers
immediately prior to the Closing, including accrued interest on the
Loans (as defined in the Existing Credit Agreement).
"Existing Notes": the Notes, as defined in the Existing Credit
Agreement.
"Existing Principal Indebtedness": the principal amount of the
Loans (as defined in the Existing Credit Agreement) outstanding
immediately prior to the Closing.
"Exposure": as to any Bank at any time, an amount
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equal to the sum of (a) the aggregate principal amount of the Loans
made by such Bank then outstanding and (b) such Bank's share of the L/C
Obligations then outstanding.
"Extensions of Credit": the collective reference to the Loans
made and Letters of Credit issued under this Agreement.
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by it.
"Fee Letter": the letter agreement between the Company, the
Agent and PNC Securities Corp. dated October 30, 1997 in which the
Company agrees, among other things, to pay such parties the fees
provided in such letter, as the same may be amended, supplemented or
otherwise modified from time to time.
"Form S-1": that certain Registration Statement of the Company
on Form S-1 (No. 333-00272) (including amendments thereto) initially
filed with the Securities and Exchange Commission on or about January
11, 1996.
"GAAP": at any time with respect to the determination of the
character or amount of any asset or liability or item of income or
expense, or any consolidation or other accounting computation,
generally accepted accounting principles as in effect on the date of,
or at the end of the period covered by, the financial statements from
which such asset, liability, item of income, or item of expense, is
derived, or, in the case of any such computation, as in effect on the
date when such computation is required to be determined.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee": a Guarantee executed and delivered after
the Closing Date by a Guarantor in favor of the Agent and the
Banks, substantially in the form of Exhibit E hereto, as the same may
be amended, supplemented or otherwise modified from time to time.
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"Guarantor": a Subsidiary of the Company which after the
Closing Date executes a Guarantee pursuant to subsection 5.13.
"Indebtedness": of any Person at any date:
(a) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property or
services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with
customary practices),
(b) any other indebtedness which is evidenced by a
note, bond, debenture or similar instrument,
(c) all Capital Lease Obligations of such Person,
(d) all obligations of such Person in respect of
outstanding letters of credit, acceptances and similar
obligations 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,
(f) net liabilities of such Person under interest
rate cap agreements, interest rate swap agreements, foreign
currency exchange agreements, netting agreements and other
hedging agreements or arrangements (calculated on a basis
satisfactory to the Agent and in accordance with accepted
practice), and
(g) withdrawal liabilities of such Person or any
Commonly Controlled Entity under a Plan.
The Indebtedness of any Person shall include any Indebtedness of any
partnership in which such Person is the general partner.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": has the meaning ascribed thereto in
subsection 3.16.
"Interest Payment Date": (a) as to any Base Rate Loan, the
last day of each March, June, September and December while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last
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day of such Interest Period, and (c) as to any Eurodollar Loan having
an Interest Period longer than three months, the day which is (i) three
months after the first day of such Interest Period and (ii) the last
day of such Interest Period.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially the period commencing on the borrowing
or conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrowers in their notice of
borrowing or notice of conversion, given with respect thereto;
and
(b) thereafter, each period commencing on the last
day of the next preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrowers by irrevocable notice
to the 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 relating to Interest Periods
are subject to the following:
(i) if any Interest Period would end on a
day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next
preceding Business Day;
(ii) with respect to Eurodollar Loans, any
Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a
calendar month;
(iii) an Interest Period that would extend
beyond the Termination Date shall end on the Termination Date;
and
(iv) the Borrowers shall select Interest
Periods so as not to require a payment or prepayment of any
Eurodollar Loan during an Interest Period for such Loan.
"Interest Rate Hedge Agreement": as defined in subsection
5.14.
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"Issuing Bank:" PNC Bank, National Association and such other
Bank or Banks that may be designated by the Company from time to time
and approved by the Agent to be an Issuing Bank hereunder.
"Joinder Agreement": a Joinder Agreement, substantially in the
form of Exhibit F, executed and delivered by a Subsidiary of the
Company pursuant to subsection 5.13 pursuant to which such Subsidiary
shall become a Borrower hereunder, as such Joinder Agreement may be
amended, supplemented or otherwise modified from time to time.
"L/C Commitment": $1,000,000.
"L/C Fee Payment Date": the last day of each March, June,
September and December.
"L/C Obligations": at any time, an amount equal to the sum of
(a) 100% of the maximum amount available to be drawn under all Letters
of Credit outstanding at such time (determined without regard to
whether any conditions to drawing could be met at such time) and (b)
the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 2.8(a).
"L/C Participant": in respect of each Letter of Credit, each
Bank (other than the Issuing Bank in respect of such Letter of Credit)
in its capacity as the holder of a participating interest in such
Letter of Credit.
"Letters of Credit": as defined in Section 2.4(a).
"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).
"Loan Documents": this Agreement, the Notes, the Applications,
the Joinders, the Security Agreements, the Pledge Agreements, the
Guarantees and any other Security Document executed from time to time
as each such document may be amended, supplemented or otherwise
modified from time to time.
"Loans": the collective reference to the Tranche A Loans and
the Tranche B Loans.
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"Material Adverse Effect": a material adverse effect on (a)
the business, operations, property or condition (financial or
otherwise) of the Company and the other Borrowers taken as a whole, (b)
the ability of the Company and the other Borrowers to perform their
obligations under this Agreement, the Notes or any other Loan Document
or (c) the validity or enforceability of this Agreement, the Notes, the
Applications or any of the other Loan Documents or the rights or
remedies of the Agent or the Banks 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
ureaformaldehyde insulation.
"Moody's": ▇▇▇▇▇'▇ Investors Services, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Proceeds": (a) with respect to any Asset Sale, the amount
equal to (i) the aggregate amount received in cash (including any cash
received by way of deferred payment pursuant to, or upon the
disposition, liquidation or conversion of, a note receivable, other
non-cash consideration or otherwise, but only as and when such cash is
so received) in connection with such sale or other disposition minus
(ii) the sum of (A) the principal amount of any Indebtedness which is
secured by the asset that is the subject of such Asset Sale (other than
Indebtedness assumed by the purchaser of such asset) and which is
required to be, and is, repaid in connection with such Asset Sale or
other disposition thereof (other than Indebtedness hereunder) and (B)
the reasonable fees, commissions, income taxes and other out-of-pocket
expenses incurred by the Company or such Subsidiary (other than to the
Company or any Affiliate thereof); and (b) with respect to the sale or
issuance of any Capital Stock by the Company or any of its
Subsidiaries, the net amount equal to (i) the aggregate amount received
in cash in connection with such sale or issuance minus (ii) the
reasonable fees, commissions and other out-of-pocket expenses incurred
by the Company or such Subsidiary in connection with such sale or
issuance other than to the Company or any Affiliate thereof.
"New Bank Joinder": a Joinder and Assumption Agreement
executed and delivered by a Proposed New Bank and consented to by the
Agent and the Company, in a form acceptable to the Agent in its
reasonable discretion.
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"Notes": the collective reference to the Tranche A Notes and
the Tranche B Notes.
"Notice of Borrowing": with respect to a Loan of any Type, a
notice from the Borrowers in respect of such Loan, containing the
information in respect of such Loan and delivered to the Agent, in the
manner and by the time specified pursuant to the terms hereof. A form
of the Notice of Borrowing is attached hereto as Exhibit G.
"OCF": for any period, Consolidated Net Income for such
period, plus the amount of income taxes, interest expense, depreciation
and amortization deducted from earnings in determining such
Consolidated Net Income, plus for any period that includes the fiscal
quarter ended July 31, 1997, an amount equal to the aggregate amount of
any charges to Consolidated Net Income during such fiscal quarter, up
to in the aggregate $5,125,000, on account of the failed public debt
offerings of the Borrowers, including costs associated with the related
proposed bank credit facilities, plus for the period ended (a) October
31, 1997, $1,955,000, (b) January 31, 1998, $1,369,000, (c) April 30,
1998, $782,000 and (d) July 31, 1998, $196,000, in each case on account
of certain regional and executive salary and office expense reductions
previously documented to the Banks minus the greater of (x) the
aggregate purchase price for all rental video cassettes, rental digital
video discs and rental game inventory purchases (or like inventory
purchases) (other than Core Inventory Purchases) for such period and
(y) an amount equal to 22.5% of Rental Revenue for such period;
provided that, there also shall be excluded from Consolidated Net
Income (a) any addition for non-operating gains during such period
(including, without limitation, extraordinary or unusual gains, gains
from discontinuance of operations or gains arising from the sale of
capital assets) and (b) any subtraction for non-operating losses during
such period (including, without limitation, extraordinary or unusual
losses, losses from the discontinuance of operations or losses arising
from the sale of capital assets); provided, further, that, if during
such period a Borrower shall acquire the stock or assets of a Person
that operates a video retail business, OCF will be adjusted to include
the pro forma results of the acquired company or assets from the
beginning of such period taking into account any quantifiable cost
savings as a result of such stock or assets being acquired by a
Borrower as demonstrated by the Borrowers and agreed to by the Agent in
its reasonable discretion, which quantifiable expense reductions shall
be of a type reflected in the pro forma financial statements contained
in the Form S-1.
"Participant" as defined in subsection 9.6(f).
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"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition": an acquisition by a Borrower of the
stock or assets of a Person that operates a video rental business;
provided that (a) if the Total Debt/OCF Ratio shown on the last Total
Debt/OCF Ratio Certificate delivered by the Borrowers to the Agent
pursuant to subsection 5.2(c) prior to the date of such acquisition
shall (i) be less than 3.00 to 1.00, the Required Banks shall have
consented to the consummation of such acquisition in writing or (ii) be
greater than or equal to 3.00 to 1.00, all of the Banks shall have
consented to the consummation of such acquisition in writing; (b) at
the time that any definitive agreement is entered into in respect of
such acquisition, no Default or Event of Default shall exist or would
exist if such acquisition were consummated on such date (assuming for
purposes of the covenants contained in subsection 6.1 that pro forma
adjustments are made to the financial statements of the Borrowers
reflecting such acquisition); and (c) the Cash Flow for the prior
fiscal year of the business or segment which is being so acquired (with
such adjustments to Cash Flow to take into account any quantifiable
cost savings as a result of such business or segment being acquired by
such Borrower as demonstrated by the Borrowers and agreed to by the
Agent in its reasonable discretion, including any quantifiable expense
reductions of the type reflected in the pro forma financial statements
contained in the Form S-1) shall be greater than zero.
"Permitted Investments":
(i) direct obligations of the United States
of America or any agency or instrumentality thereof or
obligations backed by the full faith and credit of the United
States of America maturing in twelve months or less from the
date of acquisition;
(ii) commercial paper maturing in 180 days
or less rated not lower than A-1 by S&P or P-1 by Moody's on
the date of acquisition; and
(iii) demand deposits, time deposits or
certificates of deposit maturing within one year in commercial
banks whose obligations are rated A-1, A or the equivalent or
better by S&P or Moody's on the date of acquisition.
provided, that, in each case, such obligations are payable in Dollars.
"Permitted Liens" shall mean:
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(a) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due
and payable;
(b) Pledges or deposits made in the ordinary course
of business to secure payment of workmen's compensation, or to
participate in any fund in connection with workmen's compensation,
unemployment insurance, old-age pensions or other social security
programs;
(c) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the
ordinary course of business that are not yet due and payable and Liens
of landlords securing obligations to pay lease payments that are not
yet due and payable or in default;
(d) Good faith pledges or deposits made in the
ordinary course of business to secure performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or leases,
not in excess of the aggregate amount due thereunder, or to secure
statutory obligations, or surety, appeal, indemnity, performance or
other similar bonds required in the ordinary course of business;
(e) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of
which materially impairs the use of such property or the value thereof,
and none of which is violated in any material respect by existing or
proposed structures or land use;
(f) Liens created pursuant to the Security Documents;
(g) Any Lien existing on the date of this Agreement
and described on Schedule II hereto provided that the principal amount
secured thereby is not hereafter increased and no additional assets
become subject to such Lien;
(h) Purchase Money Security Interests or Liens
created pursuant to Capital Leases; provided that the aggregate amount
of (i) loans and deferred payments secured by all Purchase Money
Security Interests and (ii) the aggregate principal component of all
Capital Leases shall not exceed in the aggregate $2,000,000 (excluding
for the purpose of this computation any loans or deferred payments
secured by Liens described on Schedule II hereto); provided further
that, (i) such Liens shall be created simultaneously with the
acquisition of the property which is subject to such Lien, (ii) such
Liens do not at any time encumber any property other than such property
and (iii) the Liens are not modified
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to secure any Indebtedness other than that used to acquire such
Property;
(i) The following, (i) if the validity or amount
thereof is being contested in good faith by appropriate and lawful
proceedings diligently conducted so long as levy and execution thereon
have been stayed and continue to be stayed or (ii) if a final judgment
is entered and such judgment is discharged within thirty (30) days of
entry, and in either case they do not affect the Collateral or, in the
aggregate, materially impair the ability of the Borrowers to perform
their obligations hereunder or under the other Loan Documents:
(A) Claims or Liens for taxes, assessments
or charges due and payable and subject to interest or penalty,
provided that the Borrowers maintain such reserves or other
appropriate provisions as shall be required by GAAP and pay
all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;
(B) Claims, Liens or encumbrances upon, and
defects of title to, real or personal property, including any
attachment of personal or real property or other legal process
prior to adjudication of a dispute on the merits; or
(C) Claims or Liens of mechanics,
materialmen, warehousemen, carriers, or other statutory
nonconsensual Liens which are due and payable; and
(j) Uniform Commercial Code financing statements
filed by the lessor under an operating lease against property leased by
a Borrower under such operating lease.
"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 a particular time, any employee benefit plan which
is covered by ERISA and in respect of which a 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": the collective reference to (a) the
Pledge Agreements to be executed by the Company and certain of the
other Borrowers on the Closing Date and (b) any other Pledge Agreement
executed and delivered by one or more Borrowers or Guarantors pursuant
to subsection 5.13,
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each substantially in the form of Exhibit C-1 or C-2 attached hereto,
as the same may be amended, supplemented or otherwise modified from
time to time.
"Prime Rate": the rate of interest per annum publicly
announced from time to time by PNC Bank, National Association as its
prime rate in effect at its principal office in Philadelphia,
Pennsylvania; each change in the Prime Rate shall be effective on the
date such change is publicly announced as effective.
"Properties": the collective reference to the facilities and
properties owned, leased or operated by the Company or any of its
Subsidiaries.
"Proposed New Bank": as defined in subsection 2.16(g).
"Purchase Money Security Interest": shall mean Liens upon
tangible personal property securing loans to one or more Borrowers or
deferred payments by one or more Borrowers for the purchase of such
tangible personal property.
"Purchasing Bank": as defined in subsection 9.6(b).
"Register": as defined in subsection 9.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Reimbursement Obligation": in respect of each Letter of
Credit, the obligation of the Borrowers to reimburse the Issuing Bank
of such Letter of Credit in accordance with subsection 2.8(a) and the
Application related to such Letter of Credit for amounts drawn under
such Letter of Credit.
"Rental Revenue": for any period, the gross revenue of the
Company and its Subsidiaries derived in such period from the rental of
videos, game cassettes, digital video discs or any other similar
merchandise rented by the Company or its Subsidiaries, as determined in
accordance with GAAP.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in
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Section 4043(c)(1), (2), (4), (5), (6), (10) and (13) of ERISA.
"Required Banks": at any time, Banks the Commitment
Percentages of which at such time aggregate at least 66-2/3%.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case binding upon such Person or any of its property
or to which such Person or any of its property is subject.
"Responsible Officer": with respect to any Borrower, the chief
executive officer, president or chief financial officer of such
Borrower. Unless otherwise qualified, all references to a "Responsible
Officer" in this Agreement shall refer to a Responsible Officer of the
Company.
"S&P": Standard & Poor's Rating Group, a division of
▇▇▇▇▇▇-▇▇▇▇ Corporation.
"Security": "security" as defined in Section 2(1) of the
Securities Act of 1933, as amended.
"Security Agreements": the collective reference to (a) the
Security Agreement to be executed by all of the Borrowers on the
Closing Date and (b) any other Security Agreement executed and
delivered after the Closing Date by one or more Borrowers or Guarantors
pursuant to subsection 5.13, each substantially in the form of Exhibit
D attached hereto, as the same may be amended, supplemented or
otherwise modified from time to time.
"Security Documents": the Security Agreements, the Pledge
Agreements and all other documents executed after the Closing Date
granting or purporting to ▇▇▇▇▇ ▇ ▇▇▇▇ on Collateral.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Subordinated Debt": Indebtedness of a Borrower which is
subordinated in right of payment to all of the obligations of all of
the Borrowers to the Banks under the Loan Documents on terms
satisfactory to the Required Banks.
"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
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majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company.
"Taxes": as defined in subsection 2.21.
"Termination Date": the earlier of (a) December 14, 2000, or
any anniversary of such date to which the Termination Date shall have
been extended pursuant to subsection 2.16(f) hereof and (b) the date
the Commitments are terminated as provided herein; provided that, in no
event shall the Termination Date be extended beyond December 14, 2002.
"Total Commitments": at any time, the aggregate amount of the
Banks' Commitments, as in effect at such time.
"Total Debt": at any date, without duplication, the sum of (a)
the aggregate of all Indebtedness (including Subordinated Debt, the
current portion of Indebtedness and the undrawn face amount of any
letters of credit then outstanding) of the Company and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP and (b) the aggregate amount of all Contingent Obligations of the
Company and its Subsidiaries, determined on a consolidated basis, in
each case as of such date.
"Total Debt/OCF Ratio": on any date, the ratio of Total Debt
on such date to OCF for the four consecutive fiscal quarters of the
Company most recently ended prior to such date.
"Total Debt/OCF Ratio Certificate": as defined in subsection
5.2(c).
"Tranche": the collective reference to Eurodollar Tranche A
Loans and Eurodollar Tranche B Loans, in each case whose Interest
Periods begin on the same date and end on the same later date (whether
or not such Loans originally were made on the same day), it being
understood that no single Tranche may include both Tranche A Loans and
Tranche B Loans.
"Tranche A Commitment": as to any Bank, the obligation of such
Bank to make Tranche A Loans and to issue and/or acquire participating
interests in Letters of Credit hereunder in an aggregate amount at any
one time outstanding not to exceed the amount set forth opposite such
Bank's name on Schedule I hereto under the caption "Tranche A
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Commitment," as such amount may be changed from time to time in
accordance with the provisions of this Agreement and/or any applicable
Assignment and Acceptance.
"Tranche A Exposure": as to any Bank at any time, an amount
equal to the sum of (a) the aggregate principal amount of the Tranche A
Loans made by such Bank then outstanding and (b) such Bank's share of
the L/C Obligations then outstanding.
"Tranche A Loan": the meaning ascribed thereto in subsection
2.1(a).
"Tranche A Notes": the meaning ascribed thereto in subsection
2.2, as the same may be amended, supplemented or otherwise modified
from time to time.
"Tranche B Commitment": as to any Bank, the obligation of such
Bank to make Tranche B Loans in an aggregate amount at any one time
outstanding not to exceed the amount set forth opposite such Bank's
name on Schedule I hereto under the caption "Tranche B Commitment," as
such amount may be changed from time to time in accordance with the
provisions of this Agreement and/or any applicable Assignment and
Acceptance.
"Tranche B Loan": the meaning ascribed thereto in subsection
2.1(b).
"Tranche B Notes": the meaning ascribed thereto in subsection
2.2, as the same may be amended, supplemented or otherwise modified
from time to time.
"Type": when used in respect of any Loan, shall refer to the
Rate by reference to which interest on such Loan is determined. For
purposes hereof, "Rate" shall include the Eurodollar Rate and the Base
Rate.
"Voting Stock": capital stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the directors (or
Persons performing similar functions).
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended, supplemented or
otherwise modified from time to time.
"Wholly-Owned Subsidiary": at any time, any Subsidiary one
hundred percent (100%) of all of the equity Securities (except
directors' qualifying shares) and voting Securities of which are owned
by any one or more of the Company and its
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other Wholly-Owned Subsidiaries at such time.
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, the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.
(b) As used herein and in the Notes and the other
Loan Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, accounting terms relating to the Company and its Subsidiaries
not defined in subsection 1.1 and accounting terms partly defined in subsection
1.1, to the extent not defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, subsection, Schedule and Exhibit references are to this Agreement
unless otherwise specified.
(d) The meanings given to terms defined in this
Agreement shall be equally applicable to both the singular and plural forms of
such terms.
SECTION 2A. RESTRUCTURE OF EXISTING INDEBTEDNESS
2A.1. Restructure of Existing Indebtedness. (a) On the Closing
Date, and without the necessity of further action by any party, the Existing
Principal Indebtedness owed to each Bank as of immediately prior to the Closing
shall be converted into the following:
(i) Tranche A Loans by such Bank to the
Borrowers under this Agreement in a principal amount equal to such Bank's
Tranche A Commitment on the Closing Date; and
(ii) Tranche B Loans under this Agreement in
a principal amount equal to the difference between (x) the amount of such Bank's
Existing Principal Indebtedness as of immediately prior to the Closing and (y)
the amount of such Bank's Existing Principal Indebtedness which is converted
into Tranche A Loans pursuant to clause (i) of this subsection 2A.1(a).
(b) Each Loan converted into an obligation under this
Agreement as provided in subsection (a) above shall be deemed to have been made
under this Agreement and shall be governed by this Agreement and the other Loan
Documents for all purposes, including being secured by the Security Documents.
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(c) Each Loan converted under clause (a) of this
Section 2A.1 shall have the same initial Interest Period under this Agreement
that it had on the Closing Date under the Existing Credit Agreement and shall be
of the same initial Type under this Agreement as it was on the Closing Date
under the Existing Credit Agreement. However, in calculating interest on such
Loans, the applicable margin from and after the Closing Date shall be the
Applicable Margin under this Agreement.
(d) Notwithstanding any provision of this Agreement
to the contrary, any interest, facility fees, administrative fees or other fees
accrued as of the Closing Date under the Existing Credit Agreement shall be
carried over as interest payable, or fees payable, as the case may be, under
this Agreement, and shall payable under this Agreement on the same date that it
would have been payable under the Existing Credit Agreement.
2A.2. Existing Documents Superseded. (a) On the Closing Date,
the Existing Credit Agreement and the Existing Notes shall be superseded by this
Agreement, the Notes and the other Loan Documents and shall become of no further
force and effect.
(b) Notwithstanding the foregoing, it is not the
intention of any of the parties hereto that the restructuring of the Existing
Indebtedness provided in subsection 2A.1 constitute a payment or discharge of
the Existing Indebtedness. Accordingly, the Borrowers' obligation to pay the
Loans and other amounts payable hereunder in accordance with the terms of this
Agreement and the other Loan Documents shall be accepted by the Banks in renewal
and extension of (but not in substitution and exchange for or in payment of) the
Existing Indebtedness.
SECTION 2. LOANS AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to the terms and conditions
hereof, each Bank severally agrees to make revolving credit loans (the "Tranche
A Loans") to the Borrowers on a joint and several basis from time to time during
the Commitment Period in an aggregate principal amount at any one time
outstanding not exceed the amount of such Bank's Tranche A Commitment; provided
that, no Tranche A Loan shall be made if, after giving effect to the making of
such Loan and the simultaneous application of the proceeds thereof, (i) the
aggregate amount of the Tranche A Exposure of all of the Banks would exceed the
aggregate amount of the Tranche A Commitments of all of the Banks, (ii) the
aggregate amount of the Exposure of all of the Banks would exceed the difference
between (A) the Total Commitments and (B) the Commitment Holdback Amount at such
time and (iii) the ratio of (A) Total Debt on such date to (B) OCF for the four
consecutive fiscal quarters of the Company as set forth in the most recent Total
Debt/OCF Ratio Certificate furnished to the Agent pursuant to
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subsection 5.2(c) shall exceed the Total Debt/OCF Ratio required at such time
pursuant to subsection 6.1(b) (e.g., for the period from the Closing Date to
January 30, 1998, 4.50 to 1.00; for the period from January 31, 1998 to April
29, 1998, 4.30 to 1.00; for the period from April 30, 1998 to July 30, 1998,
4.00 to 1.00; for the period from July 31, 1998 to October 30, 1998, 3.50 to
1.00; and thereafter, 3.25 to 1.00). The Tranche A Commitments may be terminated
or reduced from time to time pursuant to subsection 2.16. Within the foregoing
limits, the Borrowers may during the Commitment Period borrow, repay and
reborrow under the Tranche A Commitments, subject to and in accordance with the
terms and limitations hereof.
(b) Subject to the terms and conditions hereof, each
Bank severally agrees to make revolving credit loans (the "Tranche B Loans") to
the Borrowers on a joint and several basis from time to time during the
Commitment Period in an aggregate principal amount at any one time outstanding
not to exceed the amount of such Bank's Tranche B Commitment; provided that, no
Tranche B Loan shall be made if, after giving effect to the making of such Loan
and the simultaneous application of the proceeds thereof, (i) the aggregate
outstanding principal amount of Tranche B Loans of all of the Banks would exceed
the aggregate amount of the Trance B Commitments of all of the Banks, (ii) the
aggregate amount of the Exposure of all of the Banks would exceed the difference
between (A) the Total Commitments and (B) the Commitment Holdback Amount at such
time and (iii) the ratio of (A) Total Debt on such date to (B) OCF for the four
consecutive fiscal quarters of the Company as set forth in the most recent Total
Debt/OCF Ratio Certificate furnished to the Agent pursuant to subsection 5.2(c)
shall exceed the Total Debt/OCF Ratio required at such time pursuant to
subsection 6.1(b) (e.g., for the period from the Closing Date to January 30,
1998, 4.50 to 1.00; for the period from January 31, 1998 to April 29, 1998, 4.30
to 1.00; for the period from April 30, 1998 to July 30, 1998, 4.00 to 1.00; for
the period from July 31, 1998 to October 30, 1998, 3.50 to 1.00; and thereafter,
3.25 to 1.00); provided, further, that, notwithstanding anything to the contrary
herein, the Borrowers may not borrow Tranche B Loans unless at such time the
Tranche A Commitments shall be fully utilized. The Tranche B Commitments may be
terminated or reduced from time to time pursuant to subsection 2.16. Within the
foregoing limits, the Borrowers may during the Commitment Period borrow, repay
and reborrow under the Tranche B Commitments, subject to and in accordance with
the terms and limitations hereof.
(c) The Loans may from time to time be (i) Eurodollar
Loans, (ii) Base Rate Loans or (iii) a combination thereof, as determined by the
Borrowers and notified to the Agent in accordance with subsections 2.3 and 2.26;
provided that, no Loan shall be made as a Eurodollar Loan after the date that is
one month prior to the Termination Date.
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(d) The failure of any Bank to make any Loan shall
not relieve any other Bank of its obligation to lend hereunder (it being
understood, however, that no Bank shall be responsible for the failure of any
other Bank to make any Loan required to be made by such other Bank). Each Loan
shall be made in accordance with the procedures set forth in subsection 2.3.
2.2 Notes. (a) The Tranche A Loans made by each Bank shall be
evidenced by a promissory note of the Borrowers, substantially in the form of
Exhibit A-1, with appropriate insertions as to payee, date and principal amount
(a "Tranche A Note"), payable to the order of such Bank and in a principal
amount equal to the amount of the initial Tranche A Commitment of such Bank.
Each Bank is hereby authorized to record the date, Type and amount of each
Tranche A Loan made by such Bank, each continuation thereof, each conversion of
all or a portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of Eurodollar Tranche A Loans,
the length of each Interest Period with respect thereto, on the schedule annexed
to and constituting a part of its Tranche A Note and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
provided that the failure of any Bank to make such recordation (or any error in
such recordation) shall not affect the obligations of the Borrowers hereunder or
under such Tranche A Note. Each Tranche A Note shall (i) be dated the Closing
Date, (ii) be stated to mature on the Termination Date and (iii) provide for the
payment of interest in accordance with subsections 2.13 and 2.14.
(b) The Tranche B Loans made by each Bank shall be
evidenced by a promissory note of the Borrowers, substantially in the form of
Exhibit A-2, with appropriate insertions as to payee, date and principal amount
(a "Tranche B Note"), payable to the order of such Bank in a principal amount
equal to the amount of the initial Tranche B Commitment of such Bank. Each Bank
is hereby authorized to record the date, Type and amount of each Tranche B Loan
made by such Bank, each continuation thereof, each conversion of all or a
portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of Eurodollar Tranche B Loans,
the length of each Interest Period with respect thereto, on the schedule annexed
to and constituting a part of its Tranche B Note, and any such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
provided that the failure of any Bank to make such recordation (or any error in
such recordation) shall not affect the obligations of the Borrowers hereunder or
under such Tranche B Note. Each Tranche B Note shall (i) be dated the Closing
Date, (ii) be stated to mature on the Termination Date and (iii) provide for the
payment of interest in accordance with subsections 2.13 and 2.14.
2.3 Procedure for Loans. (a) The Borrowers may borrow under
the Tranche A Commitments and the Tranche B
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Commitments during the Commitment Period on any Business Day. The Borrowers
shall give the Agent irrevocable notice (which notice must be received by the
Agent prior to 10:00 a.m., Philadelphia time, three Business Days prior to the
requested Borrowing Date, if all or any part of the requested Loans are to be
initially Eurodollar Loans, or prior to 11:00 a.m., Philadelphia time, on the
requested Borrowing Date if all of the requested Loans are to be initially Base
Rate Loans), specifying in the Notice of Borrowing (a) the amount to be
borrowed, (b) the requested Borrowing Date, (c) whether the borrowing is to be
of Eurodollar Loans, Base Rate Loans or a combination thereof, (d) if the
borrowing is to be entirely or partly of Eurodollar Loans, the amount of such
Loan(s) and the length of the initial Interest Period(s) therefor and (e)
whether the borrowing is to be of Tranche A Loans, Tranche B Loans, or a
combination thereof and, if a combination thereof, the amount allocated to each.
Each borrowing under the Commitments of Eurodollar Tranche A Loans shall be in
an amount equal to $2,500,000 or increments of $500,000 thereafter (or, if the
aggregate Available Tranche A Commitments at such time are less than $2,500,000,
such lesser amount). Each borrowing under the Commitments of Base Rate Tranche A
Loans shall be in an amount equal to $500,000 or increments of $100,000
thereafter (or, if the aggregate Available Tranche A Commitments at such time
are less than $500,000, such lesser amount). Each borrowing under the
Commitments of Eurodollar Tranche B Loans shall be in an amount equal to
$2,500,000 or increments of $500,000 thereafter (or, if the aggregate Available
TRANCHE B Commitments at such time are less than $2,500,000, such lesser
amount). Each borrowing under the Tranche B Commitments of Base Rate Loans shall
be in an amount equal to $500,000 or increments of $100,000 thereafter (or, if
the aggregate Available TRANCHE B Commitments at such time are less than
$500,000, such lesser amount).
Upon receipt of a Notice of Borrowing from the Borrowers, the
Agent shall promptly notify each Bank thereof. Each Bank will make the amount of
its pro rata share of each borrowing (based on its Commitment Percentage at that
time) available to the Agent for the account of the Borrowers at the office of
the Agent specified in subsection 9.2 prior to 2:00 p.m., Philadelphia time, on
the Borrowing Date requested by the Borrowers in funds immediately available to
the Agent. Such borrowing will then be made available to the Borrowers by the
Agent crediting the account of the Company on the books of such office with the
aggregate of the amounts made available to the Agent by the Banks and in like
funds as received by the Agent.
Unless the Agent shall have received notice from a Bank prior
to the date of any borrowing of Loans that such Bank will not make available to
the Agent such Bank's pro rata portion of such borrowing, the Agent may assume
that such Bank has made such portion available to the Agent on the date of such
borrowing in
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accordance with this subsection and the Agent may, in reliance upon such
assumption, make available to the Borrowers on such date a corresponding amount.
If and to the extent that such Bank shall not have made such portion available
to the Agent, such Bank and the Borrowers (without prejudice to the Borrowers'
rights against such Bank) severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrowers until the date such
amount is repaid to the Agent at (i) in the case of the Borrowers, the interest
rate applicable at the time to the Loans comprising such borrowing and (ii) in
the case of such Bank, the Federal Funds Effective Rate, provided, that, if such
Bank shall not pay such amount within three Business Days of such Borrowing
Date, the interest rate on such overdue amount shall, at the expiration of such
three-Business Day period, be the rate per annum applicable to Base Rate Tranche
B Loans. If such Bank shall repay to the Agent such corresponding amount, such
amount shall constitute such Bank's Loan as part of such borrowing for purposes
of this Agreement.
(b) If in a Notice of Borrowing no election as to the
Type of Loan is specified in any such notice, then the requested Loan shall be a
Base Rate Loan. If a Eurodollar Loan is requested but no Interest Period with
respect to such Loan is specified in any such notice, then the Borrowers shall
be deemed to have selected an Interest Period of one month's duration.
2.4 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Bank, in reliance on the agreements of the other Banks set
forth in subsection 2.7(a), agrees to issue letters of credit ("Letters of
Credit") for the account of the Borrowers on any Business Day during the
Commitment Period in such form as may be approved from time to time by such
Issuing Bank; provided, that no Letter of Credit shall be issued if, after
giving effect thereto (i) the amount of the Tranche A Exposure would exceed the
aggregate amount of the Tranche A Commitments in effect at such time, (ii) the
aggregate amount of the Exposure of all of the Banks would exceed the difference
between (A) the Total Commitments and (B) the Commitment Holdback Amount at such
time, (iii) the aggregate amount of the L/C Obligations at such time would
exceed the L/C Commitment in effect at such time, or (iv) the ratio of (A) Total
Debt on such date to (B) OCF for the four consecutive fiscal quarters of the
Company as set forth in the most recent Total Debt/OCF Ratio Certificate
furnished to the Agent pursuant to subsection 5.2(c) shall exceed the Total
Debt/OCF Ratio required at such time pursuant to subsection 6.1(b) (e.g., for
the period from the Closing Date to January 30, 1998, 4.50 to 1.00; for the
period from January 31, 1998 to April 28, 1998, 4.30 to 1.00; for the period
from April 30, 1998 to July 30, 1998, 4.00 to 1.00; for the period from July 31,
1998 to October 30, 1998, 3.50 to 1.00; and thereafter, 3.25 to 1.00).
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(b) Each Letter of Credit shall;
(i) be denominated in Dollars and shall be a
standby letter of credit; and
(ii) expire no later than the earlier of (A)
360 days after its date of issuance and (B) 5 Business Days prior to
the Termination Date.
(c) Each Letter of Credit shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith, the laws of the
Commonwealth of Pennsylvania.
(d) Each Issuing Bank shall not at any time be
obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause such Issuing Bank or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.
(e) Notwithstanding the provisions of this subsection
2.4, the Banks and the Borrowers hereby agree that an Issuing Bank may issue
upon the Borrowers' request, one or more Letter(s) of Credit which by its terms
may be extended for additional periods of up to one year each provided that (i)
the initial expiration date (or any subsequent expiration date) of each such
Letter of Credit is not later than the Termination Date, and (ii) renewal of
such Letters of Credit, at such Issuing Bank's discretion, shall be available
upon written request from the Borrowers to such Issuing Bank at least 30 days
(or such other time period as agreed by the Borrowers and the Agent) before the
date upon which notice of renewal is otherwise required.
2.5 Procedure for Issuance of Letters of Credit. The Borrowers
may from time to time request that an Issuing Bank issue a Letter of Credit by
delivering to such Issuing Bank at its office for notices specified herein an
Application therefor, completed to the satisfaction of such Issuing Bank, and
such other certificates, documents and other papers and information as such
Issuing Bank may reasonably request. Upon receipt by an Issuing Bank of any
Application, such Issuing Bank will process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
after determining from the Agent that issuance of the Letter of Credit requested
thereby will be within the limits imposed by subsection 2.4(a), promptly issue
such Letter of Credit (but in no event shall an Issuing Bank be required to
issue any Letter of Credit earlier than five (5) Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by such
Issuing Bank and the Borrowers. Each Issuing Bank shall advise the Agent of the
terms of a Letter of Credit on the
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date of issuance thereof and shall promptly after issuing a Letter of Credit
furnish copies thereof to the Borrowers and the Agent. Each Issuing Bank shall
within ten days after the end of each month, send to the Agent, for distribution
to the Borrowers and each Bank, a schedule of outstanding Letters of Credit
issued by such Issuing Bank as of the end of the prior month detailing for each
such outstanding Letter of Credit (i) the face amount outstanding, (ii) its
issuance date, (iii) its maturity date, (iv) the name of the beneficiary and (v)
the identifying Letter of Credit number.
2.6 L/C Fees, Commissions and Other Charges. (a) The Borrowers
shall pay to the Agent, for the account of the Banks (including the Issuing
Banks) pro rata according to their respective Commitment Percentages, a letter
of credit commission with respect to each Letter of Credit, computed at a rate
equal to the then Applicable Margin for Eurodollar Tranche A Loans on the daily
average undrawn face amount of such Letter of Credit (computed on the basis of
the actual number of days such Letter of Credit is outstanding in a year of 360
days). Such commissions shall be payable in arrears on the last Business Day of
each March, June, September and December to occur after the date of issuance of
each Letter of Credit, and on the Termination Date or such earlier date as the
Commitments are terminated, and shall be nonrefundable. The Borrowers shall also
pay to each Issuing Bank, in respect of each Letter of Credit issued by such
Issuing Bank, a fronting fee for the period from and including the date of
issuance of such Letter of Credit to and including the date of termination of
such Letter of Credit computed at the rate of 1/8% per annum on the daily
average undrawn face amount of such Letter of Credit (computed on the basis of
the actual number of days such Letter of Credit is outstanding in a year of 360
days). The fees described in the preceding sentence shall be due and payable
quarterly in arrears on the last Business Day of each March, June, September and
December of each year and on the Termination Date or such earlier date as the
Commitments are terminated, and shall be nonrefundable.
(b) In addition to the foregoing fees and
commissions, the Borrowers shall pay or reimburse each Issuing Bank for such
normal and customary costs and expenses as are incurred or charged by such
Issuing Bank in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit.
(c) The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Banks and the Banks all fees and commissions
received by the Agent for their respective accounts pursuant to this subsection.
2.7 L/C Participations. (a) Each Issuing Bank irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce such
Issuing Banks to issue Letters of
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Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from such Issuing Bank, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk,
an undivided interest equal to such L/C Participant's Commitment Percentage in
such Issuing Bank's obligations and rights under each Letter of Credit issued by
such Issuing Bank hereunder and the amount of each draft paid by such Issuing
Bank thereunder. Each L/C Participant unconditionally and irrevocably agrees
with each Issuing Bank that, if a draft is paid under any Letter of Credit
issued by such Issuing Bank for which such Issuing Bank is not reimbursed in
full by the Borrowers in accordance with the terms of this Agreement, such L/C
Participant shall pay to such Issuing Bank upon demand at such Issuing Bank's
address for notices specified herein an amount equal to such L/C Participant's
Commitment Percentage of the amount of such draft or any part thereof, which is
not so reimbursed. Any action taken or omitted by an Issuing Bank under or in
connection with a Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall neither create for such Issuing Bank any
resulting liability to any L/C Participant nor constitute a defense to an L/C
Participant's obligation to make the payments to such Issuing Bank required by
the immediately preceding sentence.
(b) If any amount required to be paid by any L/C
Participant to an Issuing Bank pursuant to subsection 2.7(a) in respect of any
unreimbursed portion of any payment made by such Issuing Bank under any Letter
of Credit is not paid to such Issuing Bank on the date such payment is due from
such L/C Participant, such L/C Participant shall pay to such Issuing Bank on
demand an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Effective Rate, as quoted by such Issuing Bank, during the
period from and including the date such payment is required to the date on which
such payment is immediately available to the Issuing Bank, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. A certificate of an Issuing Bank
submitted to any L/C Participant with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Bank has
made payment under any Letter of Credit and has received from any L/C
Participant its pro rata share of such payment in accordance with subsection
2.7(a), such Issuing Bank receives any payment related to such Letter of Credit
(whether directly from the Borrowers or otherwise, including by way of set-off
or proceeds of collateral applied thereto by such Issuing Bank), or any payment
of interest on account thereof, such Issuing Bank will distribute to such L/C
Participant its pro rata share thereof; provided, however, that in the event
that any such payment received by such Issuing Bank shall be required to be
returned by such Issuing Bank, such L/C Participant shall return to such
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Issuing Bank the portion thereof previously distributed by such Issuing Bank to
it.
2.8 Reimbursement Obligation of the Borrowers. (a) The
Borrowers jointly and severally agree to reimburse each Issuing Bank in respect
of a Letter of Credit on each date on which such Issuing Bank notifies the
Company of the date and amount of a draft presented under such Letter of Credit
and paid or to be paid by such Issuing Bank for the amount of (i) such draft so
paid and (ii) any taxes, fees, charges or other direct costs or expenses
incurred by such Issuing Bank in connection with such payment. Each such payment
shall be made to the applicable Issuing Bank at its office listed in Section 9.2
in Dollars and in immediately available funds.
(b) Interest shall be payable on any and all amounts
remaining unpaid by the Borrowers under this subsection from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the per annum rate of the Base Rate plus
3.50% and shall be payable on demand by an Issuing Bank.
2.9 Obligations Absolute. (a) The obligations of the Borrowers
under subsections 2.6, 2.8 and 2.9 shall be absolute and unconditional under any
and all circumstances and irrespective of any set-off, counterclaim or defense
to payment which one or more Borrowers may have or have had against an Issuing
Bank or any beneficiary of a Letter of Credit or any other Person.
(b) The Borrowers agree with each Issuing Bank that
no Issuing Bank shall be responsible for, and the Borrowers' Reimbursement
Obligations under subsection 2.8(a) shall not be affected by, among other
things, (i) the validity or genuineness of any documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, provided, that reliance upon such documents by such
Issuing Bank shall not have constituted gross negligence or willful misconduct
by such Issuing Bank or (ii) any dispute between or among one or more Borrowers
and any beneficiary of any Letter of Credit or any other Person to which such
Letter of Credit may be transferred or (iii) any claims whatsoever of one or
more Borrowers against any beneficiary of such Letter of Credit or any such
transferee.
(c) Each Issuing Bank shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by such Issuing Bank's gross
negligence or willful misconduct.
(d) The Borrowers agree that any action taken or
omitted by an Issuing Bank under or in connection with any Letter of Credit or
the related drafts or documents, if done in the
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absence of gross negligence or willful misconduct, shall be binding on the
Borrowers and shall neither result in any liability of such Issuing Bank to the
Borrowers nor constitute a defense to the Borrowers' obligation to reimburse
such Issuing Bank.
2.10 Letter of Credit Payments. If any draft shall be
presented for payment to an Issuing Bank under any Letter of Credit, such
Issuing Bank shall promptly notify the Company of the date and amount thereof.
The responsibility of an Issuing Bank to the Borrowers in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
2.11 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Agreement, the provisions of this Agreement shall apply.
2.12 Fees. (a) The Borrowers jointly and severally agree to
pay to the Agent for the account of each Bank, on each March 31, June 30,
September 30 and December 31 during the Commitment Period and on the date on
which the Commitments shall be permanently reduced or terminated as provided
herein, a commitment fee at a rate per annum equal to the Commitment Fee Rate in
effect from time to time on the average daily amount of the Available
Commitments during the preceding quarter (or shorter period commencing with the
date hereof or ending with the Termination Date or the date on which the
Commitments shall be terminated). In calculating the Available Commitments for
purposes of this subsection 2.12(a), no deduction shall be made for the
Commitment Holdback Amount and the Borrowers shall pay Commitment Fees on such
amounts. All Commitment Fees shall be computed on the basis of the actual number
of days elapsed in a year of 360 days and shall be paid in Dollars. The
Commitment Fee due to each Bank shall commence to accrue on the date hereof, and
shall cease to accrue on the Termination Date. The Agent shall distribute the
Commitment Fees among the Banks pro rata in accordance with their respective
Commitment Percentages.
(b) The Borrowers jointly and severally agree to pay
the Agent, for its own account, administrative and other fees at the times and
in the amounts set forth in the Fee Letter Agreement.
(c) The foregoing fees shall be paid in Dollars on
the dates due, in immediately available funds, to the Agent for distribution, if
and as appropriate, among the Banks. Once paid, none of the foregoing fees shall
be refundable under any circumstances.
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2.13 Interest Rates and Payment Dates. (a) Subject to the
provisions of subsection 2.14, each Base Rate Tranche A Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be) at a rate per annum equal to the Base Rate plus
the Applicable Margin applicable to Base Rate Tranche A Loans. Subject to the
provisions of subsection 2.14, each Base Rate Tranche B Loan shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be) at a rate per annum equal to the Base Rate plus
the Applicable Margin applicable to Base Rate Tranche B Loans.
(b) Subject to the provisions of subsection 2.14,
each Eurodollar Tranche A Loan shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the Eurodollar Rate for the Interest Period in effect for such Eurodollar
Tranche A Loan plus the Applicable Margin applicable to Eurodollar Tranche A
Loans. Subject to the provisions of subsection 2.14, each Eurodollar Tranche B
Loan shall bear interest (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal to the Eurodollar
Rate for the Interest Period in effect for each Eurodollar Tranche B Loan plus
the Applicable Margin applicable to Eurodollar Tranche B Loans.
(c) Interest on each Loan shall be payable in arrears
on each Interest Payment Date applicable to such Loan and on the Termination
Date; provided that, interest accruing on overdue amounts pursuant to subsection
2.14 shall be payable on demand as provided in such subsection.
(d) As soon as practicable the Agent shall notify the
Company and the Banks of (i) each determination of a Eurodollar Rate and (ii)
the effective date and the amount of each change in the interest rate on a
Eurodollar Loan or Base Rate Loan. Each determination of an interest rate by the
Agent, pursuant to any provision of this Agreement (including subsections 2.13
and 2.14) shall be conclusive and binding on the Borrowers and the Banks in the
absence of clearly demonstrable error. At the request of the Borrowers, the
Agent shall deliver to the Company a statement showing the quotations used by it
in determining any interest rate pursuant to subsections 2.13(a) and (b).
2.14 Default Interest. If the Borrowers shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, the Borrowers, shall on demand from time to time pay interest on
any overdue payment of principal (in lieu of the interest otherwise payable on
such principal under subsection 2.13) and, to the extent permitted by law, on
overdue payments of interest and other amounts due hereunder up to the date of
actual payment (after as well as before judgment):
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(a) in the case of overdue principal of a Base Rate
Loan or a Eurodollar Loan, at a rate determined by the Agent to be 2% per annum
above the rate which would otherwise be payable on such Loans in accordance with
the provisions hereof; and
(b) in the case of any other amount payable hereunder
(whether for interest, fees or otherwise), at a rate equal to 3.5% per annum
above the Base Rate.
2.15 Inability to Determine Interest Rate. In the event, and
on each occasion, that prior to the first day of the commencement of any
Interest Period for a Eurodollar Loan, the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that dollar
deposits in the principal amount of such Eurodollar Loan are not generally
available in the London Interbank Market, or that the rate at which such dollar
deposits are being offered will not adequately and fairly reflect the cost to
the Banks of making or maintaining the principal amount of such Eurodollar Loan
during such Interest Period, or that reasonable means do not exist for
ascertaining the Eurodollar Rate, the Agent shall, as soon as practicable
thereafter, give written, telegraphic or telephonic notice of such determination
to the Company and the Banks. After such notice shall have been given and until
the circumstances giving rise to such notice no longer exist, each request for a
Eurodollar Loan or for conversion to or maintenance of a Eurodollar Loan
pursuant to the terms of this Agreement shall be deemed to be a request for a
Base Rate Loan. Each determination by the Agent hereunder shall be conclusive
absent error in calculation.
2.16 Termination, Reduction, Extension and Increase of
Commitments. (a) The Commitments shall be automatically terminated on the
Termination Date whereupon the entire outstanding principal balance of the
Loans, plus all accrued and unpaid interest thereon, and any fees or other
amounts owed under the Loan Documents, shall be due and payable.
(b) Upon at least five Business Days' prior
irrevocable written (including telecopy) notice to the Agent, the Borrowers may
at any time in whole permanently terminate, or from time to time in part
permanently reduce, the Commitments; provided, however, that (i) each partial
reduction of the Commitments shall be in a minimum principal amount of
$1,000,000 or in a whole multiple thereof and (ii) the Commitments may not be
reduced or terminated if, after giving effect thereto and to any prepayments of
the Loans made on the effective date thereof, the aggregate Exposure at such
time would exceed the Total Commitments at such time.
(c) Any prepayment of the Loans pursuant to
subsection 2.18(a) shall permanently reduce the Commitments on a
dollar-for-dollar basis.
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(d) The Commitments shall be automatically and
permanently reduced by the amounts and on the dates set forth below; provided
that, (i) the Commitment reductions set forth below occurring between February
1, 2001 and November 1, 2001 shall only occur if the Termination Date shall be
extended by one year pursuant to subsection 2.16(f) and (ii) the Commitment
reductions set forth below occurring after November 1, 2001 shall only occur if
the Termination Date shall be extended twice pursuant to subsection 2.16(f):
--------------------------------------------------------------------------------
Commitment Reduction Date Amount of Reduction
December 15, 1998 $3,000,000
May 1, 1999 $2,000,000
June 15, 1999 $2,000,000
August 1, 1999 $3,000,000
November 1, 1999 $2,500,000
February 1, 2000 $2,500,000
May 1, 2000 $3,000,000
August 1, 2000 $5,000,000
November 1, 2000 $3,000,000
February 1, 2001 $2,000,000
May 1, 2001 $3,500,000
August 1, 2001 $5,000,000
November 1, 2001 $3,500,000
February 1, 2002 $2,500,000
May 1, 2002 $4,000,000
August 1, 2002 $4,000,000
November 1, 2002 $4,000,000
December 14, 2002 Remaining Amount
--------------------------------------------------------------------------------
; provided, that, the Commitments shall also be reduced on August 1, 1998 by an
amount equal to the amount of any increase in the Total Commitments pursuant to
subsection 2.16(g).
Notwithstanding the foregoing, (i) if the Total Debt/OCF Ratio
shown on the Total Debt/OCF Ratio Certificate delivered by the Borrowers to the
Agent pursuant to subsection 5.2(c) for the period ending October 31, 1998 is
less than 3.00 to 1.00, then no Commitment reduction shall be required on
December 15, 1998 and the Commitment reduction otherwise due on December
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15, 1998 shall be due on May 1, 1999 and each subsequent Commitment reduction
shall be due on the immediately following Commitment reduction date (e.g., the
Commitment reduction otherwise due on May 1, 1999 in the amount of $2,000,000
shall be due on June 15, 1999, the Commitment reduction otherwise due June 15,
1999 in the amount of $2,000,00 shall be due on August 1, 1999 and so on), (ii)
if the Total Debt/OCF Ratio shown on the Total Debt/OCF Ratio Certificate
delivered by the Borrowers to the Agent pursuant to subsection 5.2(c) for the
period ending January 31, 1999 is less than 3.00 to 1.00, then no Commitment
reduction shall be required on May 1, 1999 and the Commitment reduction
otherwise due on May 1, 1999 and each subsequent Commitment reduction shall be
due on the immediately following Commitment reduction date and (iii) if the
Total Debt/OCF Ratio shown on the Total Debt/OCF Ratio Certificate delivered by
the Borrowers to the Agent pursuant to subsection 5.2(c) for the period ending
April 30, 1999 is less than 3.00 to 1.00, then no Commitment reduction shall be
required on June 15, 1999 and the Commitment reduction otherwise due on June 15,
1999 and each subsequent Commitment reduction shall be due on the immediately
following Commitment reduction date; provided, further, that, in all events the
Total Commitments shall be reduced to zero on the Termination Date.
(e) The portion of the Commitments so terminated
pursuant to any of the provisions of this subsection 2.16 shall no longer be
available for borrowing. Any reduction of the Commitments pursuant to any of
provisions of this subsection 2.16 shall be applied first to the Tranche B
Commitments until the Tranche B Commitments have been reduced to zero and then
to the Tranche A Commitments. Simultaneously with each mandatory permanent
reduction pursuant to any of the provisions of this subsection 2.16, the
Borrowers shall make a payment of (i) the outstanding Tranche A Loans equal to
the excess, if any, of (x) the aggregate amount of the Tranche A Exposure of all
of the Banks at such time over (y) the Tranche A Commitments as so reduced and
(ii) the outstanding Tranche B Loans equal to the excess, if any, of (x) the
aggregate principal amount of the Tranche B Loans of all of the Banks then
outstanding over (y) the Tranche B Commitments as so reduced. All such
reductions and payments shall be without penalty or premium (except for amounts
owing pursuant to subsection 2.22, if any). Any and all Commitment reductions or
mandatory or voluntary prepayments made pursuant to any particular paragraph of
this subsection 2.16 or pursuant to subsections 2.17 or 2.18 shall be made in
addition to, and not in lieu of, any and all Commitment reductions and mandatory
and voluntary prepayments to be made pursuant to any other paragraph of this
subsection 2.16 or pursuant to subsections 2.17 or 2.18. All mandatory and
voluntary prepayments shall be applied (i) first to Tranche B Loans outstanding
and then to Tranche A Loans outstanding and (ii) to repay Base Rate Loans or
Eurodollar Loans, at the Borrower's option (to the extent not inconsistent with
clause (i) of this sentence), provided that the Borrower shall deliver written
notice of such election to the Banks prior to or simultaneously with such
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prepayment. If no election is made by the Borrowers, then all such mandatory and
voluntary prepayments shall, unless otherwise inconsistent with the provisions
of this Agreement, be applied by the Agent to first repay Base Rate Loans, and
any excess shall be applied to repay Eurodollar Loans, with payments applied to
Eurodollar Loans being applied in order of next maturing Interest Periods. All
such mandatory and voluntary prepayments shall be accompanied by all accrued and
unpaid interest thereon. Each reduction in the Commitments hereunder shall be
made ratably among the Banks in accordance with their respective Commitment
Percentages. The Borrowers shall pay to the Agent for the account of the Banks
on the date of each termination or reduction of the Commitments, the Commitment
Fees on the amount of the Commitments so terminated or reduced accrued to the
date of such termination or reduction.
(f) During the period beginning ninety (90) days
prior to the first and second anniversary of the Closing Date and ending on such
anniversary, the Company may deliver to the Agent (which shall promptly transmit
to each Bank) a notice requesting that the Commitments be extended to the first
anniversary of the Termination Date then in effect. Within forty-five days after
its receipt of any such notice, each Bank shall notify the Agent of its
willingness or unwillingness so to extend its Commitments. Any Bank that shall
fail so to notify the Agent within such period shall be deemed to have declined
to extend its Commitments. If each (but only if each) Bank agrees to extend its
Commitments, the Agent shall so notify the Company and each Bank, whereupon (i)
the respective Commitments of the Banks shall, without further act by any party
hereto, be extended to the first anniversary of the Termination Date then in
effect and (ii) the term "Termination Date" shall thereafter mean the first
anniversary of the Termination Date then in effect. Any such extension shall be
evidenced by a written agreement among the Agent, the Banks and the Company,
such agreement to be in form and substance acceptable to the Agent and the
Banks. In the event that one or more Banks (each a "Non-Electing Bank") shall
have declined or been deemed to have declined to extend its or their Commitments
and Banks holding a majority in amount of the Total Commitments shall have
notified the Agent of their desire to extend their Commitments, the Borrowers
shall have the right, but not the obligation, at their own expense, upon notice
to each such Non-Electing Bank and the Agent, to replace all (but not less than
all) such Non-Electing Banks (in accordance with and subject to the restrictions
contained in Section 9.6) at any time before the thirtieth (30th) day prior to
the Termination Date with one or more assignees (each a "Replacement Bank")
willing to purchase the Non-Electing Banks' interests hereunder and to agree to
extend its or their Commitments in accordance with the notice referred to in the
first sentence of this clause (f). In such event, each Non-Electing Bank shall
promptly upon request transfer and assign without recourse (in accordance with
and subject to the restrictions contained in Section 9.6) all its interests,
rights and
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obligations under this Agreement to the applicable Replacement Bank; provided,
however, that (i) no such assignment shall conflict with any law or any rule,
regulation or order of any Governmental Authority, (ii) the applicable
Replacement Bank shall pay to the applicable Non-Electing Bank in immediately
available funds on the date of such assignment the principal of and interest
accrued to the date of payment on the Loans made by such Non-Electing Bank
hereunder and all other amounts accrued for such Non-Electing Bank's account or
owed to it hereunder (including Commitment Fees and any unpaid costs or
expenses), and (iii) a Non-Electing Bank shall not be required to sell its
interests hereunder unless the Borrowers have arranged for one or more
Replacement Banks to acquire the interests of all other Non-Electing Banks. If,
as a result of the foregoing, each Bank (including Replacement Banks, but
excluding Non-Electing Banks whose interests have been purchased as provided
above) has agreed to extend its Commitments, the Commitments shall be extended
as provided in clause (i) of the fourth sentence of this paragraph and the term
Termination Date shall have the meaning set forth in clause (ii) in such fourth
sentence of this clause (f).
(g) (A) The Borrowers may at any time prior to July
1, 1998 request an increase in the Commitments of the Banks by sending a written
notice thereof to all of the Banks and the Agent. Such notice shall specify the
total amount of the increase request by the Borrowers (the "Requested Increase")
which amount shall not exceed $5,000,000. Each Bank shall respond in writing to
the Borrowers (with a copy simultaneously sent to the Agent), within the time
period requested by the Borrowers in the Requested Increase (provided that such
time period is acceptable to the Agent), stating the maximum amount, if any, by
which such Bank is willing to increase its Commitment (the "Offered Amount"). If
the total of the Offered Amount for all of the Banks is greater than the
Requested Increase, the Requested Increase shall be allocated amongst the
offering Banks in proportion to their respective Offered Amounts. If the total
of the Offered Amount for all of the Banks is equal to or less than the
Requested Increase, (x) each Bank's Commitment shall increase by its Offered
Amount and (y) the Borrowers may offer the difference to a new bank (a "Proposed
New Bank"). If the Borrowers request that a Proposed New Bank join this
Agreement and provide Commitments hereunder, the Borrowers shall at least seven
(7) days prior to the date on which such Proposed New Bank proposes to join this
Agreement notify the Agent of the name of the Proposed New Bank and the amount
of its proposed Commitments and deliver a duly completed New Bank Joinder with
respect to such Proposed New Bank. If the Agent consents to a Proposed New Bank
joining this Agreement (which consent shall not be unreasonably withheld), such
Proposed New Bank shall join this Agreement pursuant to the provisions of
subsection 9.6(j). No more than one Bank may be added pursuant to this
subsection 2.16(g).
(B) Following any increase in Commitments
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pursuant to this Section 2.16(g), the Agent shall send to the Banks and the
Borrowers a revised Schedule I setting forth the new Commitments of the Banks.
Such schedule shall replace the existing Schedule I if no Bank objects thereto
within 10 days of its receipt thereof.
(C) Notwithstanding anything to the contrary
in this subsection 2.16(g), (I) the Borrowers may not request an increase in the
Commitments if at the time of such request a Default or Event of Default shall
exist and (II) no increase in the Commitments (including by way of the addition
of a Proposed New Bank) shall become effective if on the date that such increase
would become effective, a Default or Event of Default shall exist.
2.17 Optional Prepayment of Loans. (a) The Borrowers shall
have the right at any time and from time to time to prepay the Loans, in whole
or in part, without premium or penalty (but in any event subject to subsection
2.22), upon prior written, telecopy or telephonic notice to the Agent given, in
the case of Base Rate Loans, no later than 10:30 a.m., Philadelphia time, one
Business Day before any proposed prepayment, and in the case of Eurodollar
Loans, no later than 10:30 a.m., Philadelphia time, three Business Days before
any such proposed prepayment. In each case the notice shall specify the date and
amount of each such prepayment, whether the prepayment is of Eurodollar Loans or
Base Rate Loans, or a combination thereof, and, if a combination thereof, the
amount allocable to each; provided, however, that each such partial prepayment
shall be in the principal amount of at least (x) with respect to prepayments of
Base Rate Loans, $500,000 or in whole multiples of $100,000 in excess thereof
and (y) with respect to prepayments of Eurodollar Loans, $2,500,000 or in whole
multiples of $500,000 in excess thereof. Each such prepayment shall be applied
first to Tranche B Loans with any remainder being applied to Tranche A Loans.
(b) As provided in subsection 2.16(e), on the date of
any termination or reduction of the Commitments pursuant to subsection 2.16, the
Borrowers shall pay or prepay so much of the Loans as shall be necessary in
order that the Exposure at such time would not exceed the Commitments at such
time and each such prepayment shall be applied first to Tranche B Loans with any
remainder being applied to Tranche A Loans.
(c) Each notice of prepayment shall be irrevocable
and shall commit the Borrowers to prepay the amount specified in such notice.
(d) Upon receipt of any notice of prepayment, the
Agent shall promptly notify each Bank thereof.
2.18 Mandatory Prepayments. (a) Promptly upon receipt by the
Company or any of its Subsidiaries of any Net Proceeds from an Asset Sale, the
Borrowers shall pay to the Agent
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100% of such Net Proceeds; provided that, (i) in each fiscal year of the
Borrowers, the Borrowers shall not be required (unless a Default shall exist
hereunder) to make any prepayments pursuant to this clause (a) until the Net
Proceeds in the aggregate from Asset Sales in such fiscal year (including with
respect to the fiscal year ending January 31, 1998, any such Net Proceeds
received between the beginning of such fiscal year and the Closing Date) shall
equal or exceed $250,000, whereupon the amount of Net Proceeds that must be
applied to the Loans pursuant to this paragraph shall equal 100% of all Net
Proceeds in such fiscal year in excess of $250,000. The Borrowers shall give the
Agent at least one Business Day's prior written notice of each prepayment
pursuant to this subsection 2.18(a) setting forth the date and expected amount
thereof.
(b) If on any date the ratio of Total Debt on such
date to OCF for the four consecutive fiscal quarters of the Company as set forth
on the most recent Total Debt/OCF Ratio Certificate furnished to the Agent
pursuant to subsection 5.2(c) shall exceed the Total Debt/OCF Ratio required at
such time pursuant to subsection 6.1(b) (e.g., for the period from the Closing
Date to January 30, 1998, 4.50 to 1.00; for the period from January 31, 1998 to
April 29, 1998, 4.30 to 1.00 etc.), the Borrowers shall, within two Business
Days of receiving notice thereof from the Agent, prepay so much of the Loans as
shall be necessary so that such ratio shall not exceed the Total Debt/OCF Ratio
required at such time pursuant to subsection 6.1(b). Amounts prepaid pursuant to
this clause (b) may be reborrowed subject to the terms and conditions hereof.
(c) If on any date the aggregate amount of the
Exposure at such date of all of the Banks shall exceed the difference between
(i) the Total Commitments at such date and (ii) the Commitment Holdback Amount
at such date, the Borrowers shall immediately prepay the Loans in a principal
amount equal to the amount of such excess.
(d) As provided in subsection 2.16(c), any
prepayments of the Loans pursuant to subsection 2.18(a) shall permanently reduce
the Commitments on a dollar-for-dollar basis.
(e) All prepayments under this subsection 2.18 shall
be applied first (i) to any Tranche B Loans then outstanding and the balance, if
any, to Tranche A Loans then outstanding, and (ii) to the extent not
inconsistent with clause (i) above, to Base Rate Loans then outstanding and the
balance, if any, to Eurodollar Loans then outstanding, with payments applied to
Eurodollar Loans being applied in order of next maturing Interest Periods. Any
prepayment of Eurodollar Loans shall be subject to subsection 2.22.
2.19 Illegality. Notwithstanding any other provision herein,
if any change in any Requirement of Law or in the
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interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Loans as contemplated by this Agreement, (a) the
commitment of such Bank hereunder to make Eurodollar Loans, continue Eurodollar
Loans as such and convert Base Rate Loans to Eurodollar Loans shall forthwith be
cancelled and (b) such Bank's Loans then outstanding as Eurodollar Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, the Borrowers shall pay to such Bank such amounts,
if any, as may be required pursuant to subsection 2.22.
2.20 Requirements of Law. (a) In the event that any change in
any Requirement of Law or in the interpretation, or application thereof or
compliance by any Bank with any request or directive (whether or not having the
force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Bank to any tax of any
kind whatsoever with respect to this Agreement, any Note, any Letter of
Credit, any Application or any Eurodollar Loan made by it, or change
the basis of taxation of payments to such Bank in respect thereof
(except for taxes covered by subsection 2.21 and changes in the rate of
tax on the net income of such Bank);
(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, letters of credit or other extensions of
credit by, or any other acquisition of funds by, any office of such
Bank which is not otherwise included in the determination of the
interest rate on such Eurodollar Loan, as the case may be, hereunder;
or
(iii) shall impose on such Bank any other
condition;
and the result of any of the foregoing is to increase the cost to such Bank, by
an amount which such Bank deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, maintaining any Commitment hereunder
or issuing or participating in Letters of Credit or to reduce any amount
receivable hereunder in respect thereof then, in any such case, the Borrowers
shall as promptly as practicable pay such Bank, upon its demand, any additional
amounts necessary to compensate such Bank for such increased cost or reduced
amount receivable. If any Bank becomes entitled to claim any additional amounts
pursuant to this subsection, it shall as promptly as practicable notify the
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Company, through the Agent, of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Bank, through the Agent, to the Company shall be
conclusive in the absence of clearly demonstrable error. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
(b) In the event that any Bank shall have determined
that any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Bank or any
corporation controlling such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Bank's or such corporation's capital as a
consequence of its obligations hereunder or under any Letter of Credit to a
level below that which such Bank or such corporation could have achieved but for
such change or compliance (taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, the Borrowers shall as
promptly as practicable pay such Bank, upon its demand, such additional amount
or amounts as will compensate such Bank for such reduction. If any Bank becomes
entitled to claim any additional amounts pursuant to this subsection, it shall
as promptly as practicable notify the Company, through the Agent, of the event
by reason of which it has become so entitled. A certificate as to any additional
amounts payable pursuant to this subsection setting forth the calculation of
such amounts in reasonable detail submitted by such Bank, through the Agent, to
the Company shall be conclusive in the absence of clearly demonstrable error.
This covenant shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable hereunder.
(c) Each Bank agrees that it will use reasonable
efforts in order to avoid or to minimize, as the case may be, the payment by the
Borrowers of any additional amount under subsections 2.20(a) or (b); provided,
however, that no Bank shall be obligated to incur any expense, cost or other
amount in connection with utilizing such reasonable efforts. Any claim by any
Bank for payment from the Borrowers of any additional amounts under subsection
2.20(a) or (b) shall be made within one hundred and eighty (180) days after such
Bank becomes aware of the exact amount of any such claim.
2.21 Taxes. (a) All payments made by the Borrowers under this
Agreement and the Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
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Governmental Authority (excluding, in the case of the Agent and each Bank, net
income taxes and franchise or gross receipts taxes imposed on the Agent or such
Bank, as the case may be, as a result of a present or former connection between
the jurisdiction of the government or taxing authority imposing such tax and the
Agent or such Bank (excluding a connection arising solely from the Agent or such
Bank having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or the Notes)) (all such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions and withholdings being
hereinafter called "Taxes"). If any Taxes are required to be withheld from any
amounts payable to the Agent or any Bank hereunder or under the Notes, the
amounts so payable to the Agent or such Bank shall be increased to the extent
necessary to yield to the Agent or such Bank (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the Notes. Whenever any Taxes are
payable by the Borrowers, as promptly as possible thereafter the Borrowers shall
send to the Agent for its own account or for the account of such Bank, as the
case may be, a certified copy of an original official receipt received by the
Borrowers showing payment thereof. If the Borrowers fail to pay any Taxes when
due to the appropriate taxing authority or fail to remit to the Agent the
required receipts or other required documentary evidence, the Borrowers shall
indemnify the Agent and the Banks for any incremental taxes, interest or
penalties that may become payable by the Agent or any Bank as a result of any
such failure. The agreements in this subsection shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
(b) Each Bank that is not incorporated under the laws
of the United States of America or a state thereof agrees that it will deliver
to the Company and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form. Each such Bank also agrees to deliver to the Company and the
Agent two further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms or other manner of certification, as the case may be,
on or before the date that any such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Company, and such extensions or renewals
thereof as may reasonably be requested by the Company or the Agent, unless in
any such case an event (including, without limitation, any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank so advises the Company and the Agent. Each such Bank shall
certify (i) in the case of a Form 1001 or 4224, that it is entitled to receive
payments under this
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Agreement without deduction or withholding of any United States federal income
taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax.
(c) Notwithstanding the foregoing subsection 2.21(a),
the Borrowers shall not be required to pay any additional amounts to any Bank in
respect of United States withholding tax pursuant to such subsections if (i) the
obligation to pay such additional amounts would not have arisen but for a
failure by such Bank to comply with the requirements of subsection 2.21(b) or
(ii) such Bank shall not have furnished the Company with such forms listed in
subsection 2.21(b) and shall not have taken such other steps as reasonably may
be available to it under applicable tax laws and any applicable tax treaty or
convention to obtain an exemption from, or reduction (to the lowest applicable
rate) of, such United States withholding tax.
(d) Any claim by a Bank for payment from any Borrower
of any Taxes under this subsection 2.21 shall be made within one hundred and
eighty (180) days after such Bank becomes aware of the exact amount of any such
claim.
2.22 Indemnity. (a) The Borrowers jointly and severally agree
to indemnify each Bank and to hold each Bank harmless from any loss or expense
which such Bank may sustain or incur as a consequence of (i) default by the
Borrowers in payment when due of the principal amount of or interest on any
Eurodollar Loan, (ii) default by the Borrowers in making a borrowing of,
conversion into or continuation of Eurodollar Loans after the Borrowers have
given a notice requesting the same in accordance with the provisions of this
Agreement, (iii) default by the Borrowers in making any prepayment after the
Borrowers have given a notice thereof in accordance with the provisions of this
Agreement or (iv) the making of a prepayment (whether voluntary, mandatory, as a
result of acceleration or otherwise) of Eurodollar Loans on a day which is not
the last day of an Interest Period with respect thereto, including, without
limitation, in each case, any such loss or expense arising from the reemployment
of funds obtained by it or from fees payable to terminate the deposits from
which such funds were obtained. A certificate as to any amounts that a Bank is
entitled to receive under this subsection 2.22 submitted by such Bank, through
the Agent, to the Company shall be conclusive in the absence of clearly
demonstrable error and all such amounts shall be paid by the Borrowers promptly
upon demand by such Bank. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) For the purpose of calculation of all amounts
payable to a Bank under this subsection, each Bank shall be deemed to have
actually funded its relevant Eurodollar Loan through the purchase of a deposit
bearing interest at the Eurodollar Rate in
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an amount equal to the amount of such relevant Eurodollar Loan and having a
maturity comparable to the relevant Interest Period; provided, however, that
each Bank may fund each of its Eurodollar Loans in any manner it sees fit, and
the foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder.
(c) Any claim by a Bank for payment from any Borrower
under this subsection 2.22 shall be made within one hundred and eighty (180)
days after such Bank becomes aware of the exact amount of such claim.
2.23 Borrowers' Representative. Each of the Borrowers hereby
appoints the Company as its non-exclusive representative, and grants to the
Company an irrevocable power of attorney to act as its attorney-in-fact, with
regard to all matters relating to this Agreement and each other Loan Document,
including, without limitation, execution and delivery of any Notice of
Borrowing, and amendments, supplements, waivers or other modifications hereto or
thereto, receipt of any notices hereunder or thereunder and receipt of service
of process in connection herewith or therewith and making all elections as to
interest rates and interest payment dates. The Agent and the Banks shall be
entitled to rely exclusively on the Company's authority so to act in each
instance without inquiry or investigation, and each of the Borrowers hereby
agrees to indemnify and hold harmless the Agent and the Banks for any losses,
costs, delays, errors, claims, penalties or charges arising from or out of the
Company's actions pursuant to this subsection 2.23 and the Agent's and the
Banks' reliance thereon and hereon. Notice from the Company shall be deemed to
be notice from all of the Borrowers and notice to the Company shall be deemed to
be notice to all of the Borrowers. Nothing in this subsection 2.23 shall vitiate
or be held contrary to each of the Borrower's representations and covenants
regarding the Loans or the net worth or solvency of the Borrowers made herein or
in any of the Loan Documents. Each of the Borrowers hereby explicitly
acknowledges that the Agent and each Bank has executed and delivered this
Agreement and each other Loan Document to which it is a party, and has performed
its obligations under this Agreement and each other Loan Document to which it is
a party, in reliance upon the irrevocable grant of such power of attorney
pursuant to this subsection 2.23.
2.24 Pro Rata Treatment of Loans and Payments; Commitment
Fees. (a) Except as required under subsection 2.19 or subsection 9.6(j), each
borrowing by the Borrowers hereunder, each payment or prepayment of principal of
the Loans, each payment of interest on the Loans, each payment of Commitment
Fees, and each reduction of the Commitments, shall be made pro rata among the
Banks in accordance with their respective Commitment Percentages.
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(b) Each Bank agrees that in computing such Bank's
portion of any borrowing to be made hereunder, the Agent may, in its discretion,
round each Bank's percentage of such borrowing to the next higher or lower whole
dollar amount.
2.25 Payments. (a) The Borrowers shall make each payment
(including principal of or interest on any borrowing or any fees or other
amounts) hereunder not later than 12:00 (noon), Philadelphia time, on the date
when due in Dollars to the Agent at its office set forth in subsection 9.2, in
immediately available funds. Such payments shall be made without set off or
counterclaim of any kind. The Agent shall distribute to the Banks any payments
received by the Agent promptly upon receipt in like funds as received.
(b) Whenever any payment (including principal of or
interest on any borrowing or any fees or other amounts) hereunder (other than
payments on Eurodollar Loans) shall become due, or otherwise would occur, on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day.
(c) The Borrowers hereby authorize and direct the
Agent to charge any deposit account of any Borrower maintained at any branch of
PNC Bank, National Association for each payment of principal of and interest on
the Loans and for all fees and other amounts due from the Borrowers hereunder
and the Agent agrees to provide prior notice of the amount and time of each such
charge; provided that, if any Event of Default shall have occurred and be
continuing, no notice from the Agent shall be required.
2.26 Conversion and Continuation Options. The Borrowers shall
have the right at any time upon prior irrevocable notice to the Agent (i) not
later than 12:00 noon, Philadelphia time, one Business Day prior to conversion,
to convert any Eurodollar Loan to a Base Rate Loan, (ii) not later than 10:00
a.m., Philadelphia time, three Business Days prior to conversion or
continuation, to convert any Base Rate Loan into a Eurodollar Loan or to
continue any Eurodollar Loan as a Eurodollar Loan for any additional Interest
Period and (iii) not later than 10:00 a.m., Philadelphia time, three Business
Days prior to conversion, to convert the Interest Period with respect to any
Eurodollar Loan to another permissible Interest Period, subject in each case to
the following:
(a) a Eurodollar Loan may not be converted at a time
other than the last day of the Interest Period applicable thereto;
(b) any portion of a Loan maturing or required to be
repaid in less than one month may not be converted into or continued as a
Eurodollar Loan;
(c) no Eurodollar Loan may be continued as such
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and no Base Rate Loan may be converted to a Eurodollar Loan when any Default has
occurred and is continuing and the Agent or the Required Banks have determined
that such a continuation is not appropriate;
(d) any portion of a Eurodollar Loan that cannot be
converted into or continued as a Eurodollar Loan by reason of paragraph 2.26(b)
or 2.26(c) be converted at the end of the Interest Period in effect for such
Loan to a Base Rate Loan;
(e) on the last day of any Interest Period for
Eurodollar Loans, if the Borrowers have failed to give notice of conversion or
continuation as described in this subsection or if such conversion or
continuation is not permitted pursuant to subsection 2.21(d), such Loans shall
be converted to Base Rate Loans on the last day of such then expiring Interest
Period.
Each request by the Borrowers to convert or continue a Loan shall constitute a
representation and warranty that no Default shall have occurred and be
continuing. Accrued interest on a Loan (or portion thereof) being converted
shall be paid by the Borrowers at the time of conversion.
2.27 Minimum Amounts of Tranches; Maximum Number of Tranches.
(a) All borrowings, conversions and continuations of Loans hereunder and all
selections of Interest Periods hereunder shall be in such amounts and be made
pursuant to such elections that, after giving effect thereto, the aggregate
principal amount of the Loans comprising each Tranche shall be equal to
$2,500,000 or a whole multiple of $500,000 in excess thereof.
(b) The Borrowers shall not have outstanding at any
one time more than in the aggregate six Tranches.
2.28 Use of Proceeds. The Letters of Credit and the proceeds
of the Loans shall be used by the Borrowers (a) for working capital and general
corporate purposes in the ordinary course of business, (b) to repay Indebtedness
under the Existing Credit Agreement and (c) to the extent permitted hereunder,
to pay all or a portion of the purchase price for acquisitions permitted
hereunder.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Banks to enter into this Agreement
and to make the Loans and to issue and/or participate in Letters of Credit, each
of the Borrowers hereby represents and warrants to the Agent and each Bank that:
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3.1 Financial Condition. (a) The consolidated balance sheet of the
Company and its consolidated Subsidiaries as at January 31, 1997 and the related
consolidated statements of income and of cash flows for the fiscal year ended on
such date, copies of which have heretofore been furnished to each Bank, present
fairly the consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the fiscal year then ended. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved. Neither the Company nor any of its consolidated Subsidiaries
had, at the date of the balance sheet referred to above, any material Contingent
Obligation, liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction or other Interest Rate Hedge
Agreement, which is required by GAAP to be but is not reflected in the foregoing
statements or in the notes thereto.
(b) The unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries as at July 31, 1997 and the related unaudited
consolidated statements of income and of cash flows for the six-month period
ended on such date, certified by a Responsible Officer, copies of which have
heretofore been furnished to each Bank, are complete and correct and present
fairly the consolidated financial condition of the Company and its consolidated
Subsidiaries as at such date, and the consolidated results of their operations
and their consolidated cash flows for the six-month period then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved. Neither the Company
nor any of its consolidated Subsidiaries had, at the date of the balance sheet
referred to above, any material Contingent Obligation, liability for taxes, or
any long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other Interest Rate Hedge Agreement, which is required by GAAP to
be but is not reflected in the foregoing statements or in the notes thereto.
(c) The Company has delivered to the Agent those financial
projections listed on Schedule 3.1(c) hereof (collectively, the "Financial
Projections"). The Financial Projections represent a reasonable range of
possible results in light of the history of the business, present and
foreseeable conditions and the intentions of the Borrowers' management. The
Financial Projections accurately reflect the liabilities of the Company and its
Subsidiaries upon consummation of the transactions contemplated hereby as of the
Closing Date.
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3.2 No Change. Since July 31, 1997, there has been no development or
event nor any prospective development or event which has had or could reasonably
be expected to have a Material Adverse Effect.
3.3 Corporate Existence; Compliance with Law. Each of the Borrowers and
its Subsidiaries (a) except as disclosed on Schedule 3.3, is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the corporate power and authority, and the legal right, to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (c) is duly qualified as
a foreign corporation and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification, except to the extent that the failure to
be so qualified could not, in the aggregate, reasonably be expected to 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 could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
3.4 Corporate Power; Authorization; Enforceable Obligations. Each of
the Borrowers has the corporate power, authority, and legal right, to make,
deliver and perform this Agreement and each other Loan Document to which it is a
party and to borrow hereunder and has taken all necessary corporate action to
authorize the borrowings and the issuance of Letters of Credit on the terms and
conditions of this Agreement and each other Loan Document to which it is a party
and to authorize the execution, delivery and performance of this Agreement and
each other Loan Document to which it is a party. No consent or authorization of,
filing with or other act by or in respect of, any Governmental Authority or any
other Person (including stockholders and creditors of the Borrowers) is required
in connection with the borrowings or issuance of Letters of Credit hereunder or
with the execution, delivery, performance, validity or enforceability of this
Agreement, the Notes or any other Loan Document. This Agreement has been and
each other Loan Document to which it is a party will be, duly executed and
delivered on behalf of such Borrower. This Agreement constitutes and each other
Loan Document when executed and delivered will constitute, a legal, valid and
binding obligation of the Borrowers parties thereto enforceable against such
Borrowers 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. The execution, delivery and performance of this
Agreement, the Notes and the other Loan
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Documents by the Borrowers and the Guarantors, the borrowings hereunder and the
use of the proceeds thereof and the issuance of Letters of Credit hereunder will
not violate any Requirement of Law or Contractual Obligation of any Borrower or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any properties or revenues of any Borrower or its
Subsidiaries pursuant to any such Requirement of Law or Contractual Obligation.
3.6 No Material Litigation. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Borrowers, threatened against any Borrower or any of their
respective Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to this Agreement, the Notes, the other Loan Documents
or any of the transactions contemplated hereby, or (b) as to which there is a
reasonable likelihood of an adverse determination and which, if adversely
determined, could have a Material Adverse Effect.
3.7 No Default. Neither the Company, any other Borrower nor any of its
or their Subsidiaries is in default under or with respect to any of its
Contractual Obligations in any respect which could have a Material Adverse
Effect. No Default or Event of Default has occurred and is continuing.
3.8 Taxes. Each of the Borrowers and the Guarantors has filed or caused
to be filed all tax returns which, to its knowledge, are required to be filed
and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves, if
any, in conformity with GAAP have been provided on the books of the Company or
its Subsidiaries, as the case may be); no tax Lien has been filed against any of
the Borrowers or any of their Subsidiaries, and, to the knowledge of each of the
Borrowers, no claim is being asserted, with respect to any such tax, fee or
other charges.
3.9 Federal Regulations. No part of the proceeds of any Loans will be
used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or for any purpose which
violates the provisions of Regulation U or any other Regulations of the Board of
Governors of the Federal Reserve System. If requested by any Bank or the Agent,
the Borrowers will furnish to the Agent and each Bank a statement to the
foregoing effect in conformity with the requirements of FR Form U-l referred to
in said Regulation U. No part of the proceeds of the Loans hereunder will be
used for any purpose which violates, or which is inconsistent with, the
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provisions of Regulation X.
3.10 ERISA. Each Plan (such representations in respect of any
Multiemployer Plan being made to the best knowledge of each Borrower) has
complied in all material respects with the applicable provisions of ERISA and
the Code. No prohibited transaction or accumulated funding deficiency (each as
defined in subsection 7.1(j)) or, Reportable Event has occurred with respect to
any Single Employer Plan. The present value of all accrued benefits under each
Single Employer Plan of which any Borrower or a Commonly Controlled Entity is a
sponsor (based on those assumptions used to fund the Plans), as calculated by
such Borrower's actuaries, 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 the Plans allocable to such benefits. Neither any
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan and neither any Borrower nor any Commonly
Controlled Entity would become subject under ERISA to any liability if any
Borrower or any such Commonly Controlled Entity were to withdraw completely from
any Multiemployer Plan as of the valuation date most closely preceding the date
this representation is made or deemed made. Such Multiemployer Plans are neither
in Reorganization as defined in Section 4241 of ERISA nor Insolvent as defined
in Section 4245 of ERISA. The present value (determined using actuarial and
other assumptions which are reasonable in respect of the benefits provided and
the employees participating) of the liability of the Borrowers and each Commonly
Controlled Entity for post-retirement benefits to be provided to their current
and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits. Neither any Borrower nor any Commonly
Controlled Entity has any or has received notice of any liability under the Coal
Industry Retiree Health Benefit Act of 1992. 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 to the date on
which this representation is made or deemed made with respect to any Single
Employer Plan or Multiemployer Plan. No termination of a Single Employer Plan
has occurred, and no Lien on assets of any of the Borrowers or any Commonly
Controlled Entity in favor of the PBGC or a Plan has arisen during such
five-year period.
3.11 Investment Company Act. None of Borrowers is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
3.12 Purpose of Loans. The proceeds of the Loans shall be used by the
Borrowers only for the purposes permitted under subsection 2.28.
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3.13 Environmental Matters. Except to the extent that all of the
following could not reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of each of the Borrowers, the Properties
do not contain, and have not previously contained, in, on, or under, including,
without limitation, the soil and groundwater thereunder, any Materials of
Environmental Concern in amounts or concentrations that constitute or
constituted a violation of, or reasonably could give rise to liability under
Environmental Laws.
(b) To the best knowledge of each of the Borrowers, the Properties
and all operations and facilities at the Properties are in compliance, and have
in the last five years been in compliance with all 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 any
Borrower or any Subsidiary thereof which could interfere with the continued
operation of any of the Properties or impair the fair saleable value of any
thereof. None of the Borrowers or any of their respective Subsidiaries have
assumed any liability of any Person under Environmental Laws.
(c) Neither the Company, any other Borrower, nor any of their
Subsidiaries has received or is aware of any claim, notice of violation, alleged
violation, non-compliance, investigation or advisory action or potential
liability regarding environmental matters or compliance of Environmental Law
with regard to the Properties which has not been satisfactorily resolved by the
Company, such other Borrower, or such Subsidiary, nor is the Company nor any
other Borrower aware or have reason to believe that any such action is being
contemplated, considered or threatened.
(d) To the best knowledge of each Borrower, Materials of
Environmental Concern have not been generated, treated, stored, transported,
disposed of, at, on, from or under any of the Properties, nor have any Materials
of Environmental Concern been transferred from the Properties to any other
location except in either case in the ordinary course of business of the
Borrowers or any of their respective Subsidiaries, in compliance with all
Environmental Laws and such that it could not reasonably be expected to give
rise to liability under any applicable Environmental Law.
(e) There are no governmental, administrative actions or judicial
proceedings pending or, to the best knowledge of each Borrower, contemplated or
threatened under any Environmental Laws to which the Company, any other Borrower
or any of their respective Subsidiaries is or will be named as a party with
respect to the Properties, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other
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orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to any of the Properties.
(f) To the best knowledge of the Borrowers, there has been no
release or threat of release of Matters of Environmental Concern at or from the
Properties, or arising from or related to the operation of the Company or any
Subsidiary in connection with the Properties or otherwise in connection with the
business operated by the Company or any Subsidiary in violation of or in amounts
or in a manner that could reasonably be expected to give rise to liability under
any Environmental Law.
(g) To the best knowledge of the Borrowers, each of the
representations and warranties set forth in paragraphs 3.13(a) through 3.13(f)
is true and correct with respect to each Property.
3.14 No Material Misstatements. No financial statement, exhibit or
schedule furnished by or on behalf of any Borrower or Guarantor to the Agent or
any Bank in connection with the negotiation of this Agreement, any Note or any
other Loan Document contains any misstatement of fact, or omitted or omits to
state any fact necessary to make the statements therein not misleading under the
circumstances under which they were made or given, where such misstatement or
omission would be material to the interests of the Banks with respect to the
performance of each Borrower of its obligations hereunder or thereunder. Prior
to the date hereof, the Borrowers have disclosed to the Banks in writing any and
all facts which materially and adversely affect (to the extent the Borrowers can
as of the date hereof reasonably foresee), the business, operations or financial
condition of the Company and its Subsidiaries taken as a whole, and the ability
of the Borrowers to perform their obligations under this Agreement, the Notes
and the other Loan Documents.
3.15 Title to Properties. The real property owned or leased by the
Borrowers or any Subsidiary as of the Closing Date is described on Schedule 3.15
hereto. The Borrowers and their Subsidiaries have good and marketable title to
or valid leasehold interests in all properties, assets and other rights which
they purport to own or lease or which are reflected as owned or leased on their
respective books and records, free and clear of all Liens and encumbrances
except Permitted Liens, and subject to the terms and conditions of the
applicable leases. All leases of property are in full force and effect without
the necessity for any consent which has not previously been obtained upon
consummation of the transactions contemplated hereby unless the failure to
obtain such consent would not result in a Material Adverse Effect.
3.16 Intellectual Property. Each of the Borrowers and each of their
respective Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and
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processes necessary for the conduct of its business as currently conducted (the
"Intellectual Property") except for those as to which the failure to own or
license could not reasonably be expected to have a Material Adverse Effect. No
claim has been asserted and is pending by any Person challenging or questioning
the use of any such Intellectual Property, nor does such Borrower know of any
valid basis for any such claim. The use of such Intellectual Property by the
Borrowers and their Subsidiaries does not infringe the rights of any Person,
except for such claims and infringements that, in the aggregate, do not have
such a Material Adverse Effect.
3.17 No Burdensome Restrictions; List of Subsidiaries. No Requirement
of Law or Contractual Obligation of any of the Borrowers or any of their
Subsidiaries could reasonably be expected to have a Material Adverse Effect. All
of the Subsidiaries of each Borrower as of the date hereof are listed on
Schedule 3.17 of this Agreement under its name, and the respective number of
shares of authorized Capital Stock and issued and outstanding Capital Stock are
as set forth on such schedule. There are no Subsidiaries of the Company or any
Borrower which are not Borrowers hereunder or Guarantors.
3.18 Security Interests. (a) At all times after execution and delivery
of the Pledge Agreements by the Borrowers or Guarantors party thereto and
satisfaction of the conditions specified in subsection 4.1(b) or in any such
Pledge Agreement, the security interests created for the benefit of the Agent
and the Banks under the Pledge Agreements will constitute valid, perfected
security interests in the stock pledged thereunder, subject to no other Liens.
(b) At all times after execution and delivery of the Security
Documents (other than the Pledge Agreements) by the Borrowers and Guarantors
party thereto and completion of the filing and recordings listed on Schedule
3.18 or in any such Security Document, the security interests created for the
benefit of the Agent and the Banks pursuant to the Security Documents (other
than the Pledge Agreements) will constitute valid, perfected security interests
in the Collateral subject thereto, subject to no other Liens whatsoever, except
Permitted Liens.
3.19 Senior Debt Status. The obligations of the Borrowers under this
Agreement and the Notes rank senior in priority of payment to the Subordinated
Debt.
3.20 Solvency. Each of the Borrowers is, and after receipt and
application of the initial Loans hereunder will be, solvent such that: (a) the
fair value of its assets (including without limitation the fair salable value of
the goodwill and other intangible property of such Borrower) is greater than the
total amount of its liabilities, including without limitation, Contingent
Obligations, (b) the present fair salable value of its
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assets (including without limitation the fair salable value of the goodwill and
other intangible property of such Borrower) is not less than the amount that
will be required to pay the probable liability on its debts as they become
absolute and matured, and (c) it is able to realize upon its assets and pay its
debts and other liabilities and commitments (including Contingent Obligations)
as they mature in the normal course of business. Each Borrower (a) does not
intend to, and does not believe that it will, incur debts or liabilities beyond
its ability to pay as such debts and liabilities mature, and (b) is not engaged
in a business or transaction, or about to engage in a business or transaction,
for which its property would constitute unreasonably small capital after giving
due consideration to the prevailing practice and industry in which it is
engaged.
3.21 Public Utility Holding Company Act. No Borrower is subject to
regulation as a "holding company", subject to regulation as an "affiliate" of a
"holding company", or subject to regulation as a "subsidiary company" of a
"holding company", in each case under the Public Utility Holding Company Act of
1935, as amended.
3.22 Insurance. Schedule 3.22 hereto lists, as of the Closing Date, all
insurance policies and other bonds to which the Borrowers or any Subsidiary is a
party, all of which are valid and in full force and effect. No notice has been
given or claim made and no grounds exist to cancel or avoid any of such policies
or bonds or to reduce the coverage provided thereby or any replacements thereof.
Such policies and bonds or any replacements thereof provide adequate coverage
from reputable and financially sound insurers in amounts sufficient to insure
the assets and risks of the Borrowers and its subsidiaries in accordance with
prudent business practice in the industry of the Borrowers and its Subsidiaries.
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3.23 Material Contracts; Franchise Agreements. As of the Closing Date,
all material contracts relating to the business operations of the Borrowers,
including, without limitation, all employee benefit plans, employment
agreements, collective bargaining agreements and labor contracts, termination of
which would result in a Material Adverse Change (collectively, the "Material
Contracts") are listed on Schedule 3.23. As of the Closing Date, all such
Material Contracts are valid, binding and enforceable upon the Borrowers and
each of the parties thereto in accordance with their respective terms, and there
is no default thereunder with respect to any of the Borrowers or, to the
Borrowers' knowledge, with respect to parties other than the Borrowers. All
franchise agreements to which any of the Borrowers is a party are valid, binding
and enforceable upon such Borrower and each of the parties thereto in accordance
with their respective terms, and to the best of the Borrowers' knowledge, all
required disclosures required by law to be given in connection with those
franchise agreements have been given as required and the Borrowers and to the
best of the Borrowers' knowledge each of the other parties thereto are in
compliance in all material respects with such franchise agreements.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit. The agreement of each
Bank to make the initial Extensions of Credit requested to be made by it is
subject to the satisfaction on the Closing Date of the following conditions
precedent:
(a) Credit Agreement and Notes. The Agent shall have received (i)
this Agreement, (A) executed and delivered by a duly authorized officer of each
Borrower, with a counterpart for each Bank, and (B) executed and delivered by a
duly authorized officer of each Bank and (ii) for the account of each Bank, a
Tranche A Note and a Tranche B Note conforming to the requirements hereof and
executed by a duly authorized officer of the Borrowers.
(b) Other Loan Documents. (i) The Agent shall have received the
following agreements executed and delivered by a duly authorized officer of the
Borrowers party thereto: (A) the Pledge Agreements, together with share
certificates evidencing all of the stock pledged thereunder and stock powers or
other appropriate instruments of transfer, executed in blank, (B) the Security
Agreement and (C) each of the other Security Documents.
(ii) Any document (including without limitation financing
statements) required to be filed, registered or recorded in order to create, for
the benefit of the Agent and the Banks, a perfected, first priority Lien,
subject only to those Liens described on Schedule 4.1(b)(ii), shall have been
properly prepared for filing, registration or recording in each office in
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each jurisdiction in which such filings, registration and recordation are
required to perfect such first priority security interests created by the
Security Documents, and the Agent shall be satisfied that all such recordings
and filings will be completed promptly following the Closing Date and that all
necessary filing, recording and other fees and all taxes and expenses related to
such filings, registrations and recordings will be paid in full by the
Borrowers.
(c) Corporate Proceedings; No Default. The Agent shall have
received a certificate of the Secretary or an Assistant Secretary of each
Borrower dated as of the Closing Date certifying (A) that attached thereto is a
true and complete copy of the resolutions, in form and substance satisfactory to
the Agent, of the Board of Directors of such Borrower authorizing (i) the
execution, delivery and performance of this Agreement, the Notes and the other
Loan Documents to which it is a party, and (ii) the borrowings contemplated
hereunder and that such resolutions attached thereto have not been amended,
modified, revoked or rescinded, (B) as to the incumbency and specimen signature
of each officer executing any Loan Document on behalf of a Borrower; and such
certificate and the regulations attached thereto shall be in form and substance
satisfactory to the Agent and (C) that the representations contained in Section
3 are true and correct and there exists no Default after giving effect to the
initial Loans hereunder.
(d) Corporate Documents. The Agent shall have received, with a
counterpart for each Bank, true and complete copies of the certificate of
incorporation and by-laws of each Borrower, certified as of the Closing Date as
complete and correct copies thereof by the Secretary or an Assistant Secretary
of such Borrower.
(e) Fees and Expenses. The Agent shall have received (i) for its
own account (x) the fees required to be paid on the Closing Date pursuant to the
Fee Letter and (y) all costs and expenses due and payable hereunder on or before
the Closing Date (if then invoiced), including, without limitation, the
reasonable fees and expenses of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, counsel to
the Agent, in connection with the transactions contemplated by the Loan
Documents and (ii) for the account of each Bank, a closing fee equal to one half
of one percent (1/2%) of the aggregate Commitments on the Closing Date of such
Bank.
(f) Legal Opinions. The Agent shall have received the executed
legal opinion of ▇▇▇▇ and ▇▇▇▇, counsel to the Borrowers, substantially in the
form of Exhibit H. Such opinion shall be addressed to the Banks and the Agent
and cover such other matters incident to the transactions contemplated by this
Agreement as the Agent may reasonably require.
(g) UCC Filing and Other Searches. The Agent shall
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have received the results of (i) Uniform Commercial Code searches made with
respect to the Borrowers in the states or provinces in which their chief
executive offices are located, together with copies of financing statements
disclosed by such searches and (ii) such tax lien searches as the Agent shall
reasonably request, and each of the foregoing searches shall disclose no Liens
on any assets encumbered by any Security Document, except for Permitted Liens
or, if unpermitted Liens are disclosed, the Agent shall have received
satisfactory evidence of the release of such Liens.
(h) Insurance. The Agent shall have received Certificates of
Insurance with respect to each Borrower's fire, casualty, liability and other
insurance covering its respective property and business, including loss payee
endorsements in favor of the Agent as to all material collateral under the
Security Documents.
(i) Good Standing. The Agent shall have received certificates of
good standing, subsistence and/or status dated a recent date from the Secretary
of State or appropriate taxing or other authorities in the state or province of
incorporation of each Borrower.
(j) No Material Adverse Change. Since July 31, 1997, there shall
have been no material adverse change in the financial condition or prospects of
the Company and its Subsidiaries taken as a whole.
4.2 Conditions to Each Extension of Credit. The agreement of each Bank
to make any Extension of Credit requested to be made by it on any date
(including, without limitation, its initial Extension of Credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by each Borrower herein or which are contained in any
certificate, document or financial or other statement furnished at any time
under or in connection herewith or therewith (including by or on behalf of a
Guarantor), shall be true and correct in all material respects on and as of such
date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Extensions of
Credit requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings, and
all documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Agent, and the Agent shall have
received such other documents and legal opinions in respect of any aspect
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or consequence of the transactions contemplated hereby or thereby as it shall
reasonably request.
Each request by the Borrowers for a Loan or the issuance of a Letter of Credit
hereunder shall constitute a representation and warranty by the Borrowers as of
the date of such Loan that the conditions contained in this subsection 4.2 have
been satisfied.
4.3 Closing. The closing (the "Closing") of the transactions
contemplated hereby shall take place at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ &
Ingersoll, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, commencing at 12:00 Noon,
Philadelphia time, on December 15, 1997. The date on which the Closing shall be
completed is referred to herein as the "Closing Date".
SECTION 5. AFFIRMATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and unpaid, any Letter of Credit
remains outstanding or any other amount is owing to any Bank or the Agent
hereunder, such Borrower shall and (except in the case of delivery of financial
information, reports and notices) shall cause each of its Subsidiaries to:
5.1 Financial Statements. Furnish to each Bank:
(a) as soon as available, but in any event not later than 90 days
after the close of each fiscal year of the Company, a copy of the annual audit
report for such year for the Company and its consolidated Subsidiaries,
including therein a consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such fiscal year, and related
consolidated statements of income and retained earnings and changes in cash
flows of the Company and its consolidated Subsidiaries for such fiscal year, all
in reasonable detail, prepared in accordance with GAAP applied on a basis
consistently maintained throughout the period involved and with the prior year
with such changes thereon as shall be approved by the Company's independent
certified public accountants, such financial statements to be certified by Price
Waterhouse, LLP. or other independent certified public accountants selected by
the Company and reasonably acceptable to the Banks, without a "going concern" or
like qualification or exception or qualification arising out of the scope of the
audit; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal year
of the Company and 90 days after the end of the fourth quarterly period of each
fiscal year of the Company, unaudited cash flows of the Company and its
consolidated Subsidiaries, including therein (i) a consolidated
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balance sheet of the Company and its consolidated Subsidiaries as at the end of
such fiscal quarter, (ii) the related consolidated statements of income and
retained earnings of the Company and its consolidated Subsidiaries, and (iii)
the related consolidated statement of changes in financial position of the
Company and its consolidated Subsidiaries all for the period from the beginning
of such fiscal quarter to the end of such fiscal quarter and the portion of the
fiscal year through the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the like period of the preceding
fiscal year; all in reasonable detail, prepared in accordance with GAAP applied
on a basis consistently maintained throughout the period involved and with prior
periods and accompanied by a certificate of a Responsible Officer of the Company
stating that the financial statements fairly present the financial condition of
the Company and its consolidated Subsidiaries as of the date and for the periods
covered thereby (subject to, except with respect to the statements as of the
fourth fiscal quarter, normal year-end audit adjustments).
5.2 Certificates; Other Information. Furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the Company's independent
certified public accountants reporting on such financial statements stating that
in making the examination necessary for certifying such financial statements no
knowledge was obtained of any Default or Event of Default, except as
specifically indicated;
(b) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a) and (b) (i) a certificate of a Responsible
Officer of the Company showing in detail the calculations demonstrating
compliance with the financial covenants set forth in subsection 6.1 and (ii) a
certificate of the chief financial officer or Treasurer of the Company stating
that such officer has obtained no knowledge of any Default or Event of Default
except as specifically indicated; if the certificate above shall indicate that
such officer has obtained knowledge of a Default or Event of Default, such
certificate shall state what efforts the Borrowers are making to cure such
Default or Event of Default;
(c) within 45 days after the end of the first three fiscal quarters
in each fiscal year of the Company, and within 90 days after the end of each
fiscal year of the Company, a certificate of a Responsible Officer of the
Company setting forth the Total Debt/OCF Ratio as of the end of such fiscal
quarter or fiscal year, as the case may be, and detailing the computations
necessary in calculating such Ratio (a "Total Debt/OCF Ratio Certificate");
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(d) within five days after the same are sent, copies of all
certificates, financial statements and reports which the Company sent to its
stockholders and within five days after the same are filed, copies of all
financial statements and reports which any Borrower or Guarantor may make to, or
file with, the Securities and Exchange Commission or any successor of analogous
Governmental Authority;
(e) Written notice:
(i) at least ten (10) calendar days prior thereto, with
respect to any proposed sale or transfer of assets in excess of
$250,000 pursuant to subsection 6.5, and
(ii) within the time limits set forth in subsection 6.15, any
amendment to the organizational documents of any Borrower or Guarantor.
(f) Promptly upon their becoming available to the Borrowers,
any reports including management letters submitted to any Borrower or
Guarantor by independent accountants in connection with any annual,
interim or special audit.
(g) Concurrently with the delivery of the financial statements
referred to in subsection 5.1(a) and (b), a brief description of each
acquisition that was consummated in the prior quarter, detailing the
consideration paid and the cash flow of the entity or assets acquired
in such acquisition.
(h) promptly, such additional financial and other information
as the Agent or any Bank may from time to time reasonably request
(including without limitation the annual budget, forecasts or
projections of the Borrowers and an updated list of all currently
effective franchise agreements to which any of the Borrowers are
parties).
5.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Company or its Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence. Except as
otherwise permitted in subsection 6.4, continue to engage in business of the
same general type as now conducted by it and engage in such business only in the
United States (including not opening any stores outside the United States),
except that the Borrowers may enter into franchise agreements with franchisees
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located outside of the United States; and, preserve, renew and keep in full
force and effect its corporate 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 except to the extent that failure to comply therewith could
not, in the aggregate, have a Material Adverse Effect.
5.5 Maintenance of Insurance; Property. (a) Insure its properties and
assets against loss or damage by fire and such other insurable hazards as such
assets are commonly insured (including fire, extended coverage, property damage,
worker's compensation, public liability and business interruption insurance) and
against other risks in such amounts as similar properties and assets are insured
by prudent companies in similar circumstances carrying on similar businesses,
and with reputable and financially sound insurers, including self insurance to
the extent customary. The Borrowers shall deliver (i) on the Closing Date and
annually thereafter an original certificate of insurance signed by the
Borrowers' independent insurance broker describing and certifying as to the
existence of the insurance on the Collateral required to be maintained by this
Agreement and the other Loan Documents and (ii) at the request of the Agent or
any Bank, from time to time a summary schedule indicating all insurance then in
force with respect to the Borrowers. Such policies of insurance shall contain
endorsements, in form and substance acceptable to the Agent, which shall (i)
specify the Agent (on behalf of the Banks) as an additional insured and lender
loss payee as its interests may appear, with the understanding that any
obligation imposed upon the insured (including, without limitation, the
liability to pay premiums) shall be the sole obligation of the Borrowers and not
that of the insured, (ii) provide, except in the case of public liability
insurance and workmen's compensation insurance, that all insurance proceeds for
losses of less than $250,000 shall be adjusted with and payable to the Borrowers
or any Subsidiaries and that all insurance proceeds for losses of $250,000 or
more shall be adjusted with and payable to the Bank, (iii) include effective
waivers by the insurer of all claims for insurance premiums against the Agent
and the Banks, (iv) provide that no cancellation of such policies for any reason
(including, without limitation, non-payment of premium) nor any change therein
including any reduction in coverage shall be effective until at least thirty
(30) days after receipt by the Agent of written notice of such cancellation or
change, (v) be primary without right of contribution of any other insurance
carried by or on behalf of any additional insureds with respect to their
respective interests in the Collateral, and (vi) provide that inasmuch as the
policy covers more than one insured, all terms, conditions, insuring agreements
and endorsements (except limits of liability) shall operate as if there were a
separate policy covering each insured. The Borrowers shall notify the Banks
promptly of any occurrence causing a material loss or decline in value of the
Collateral and the estimated (or actual,
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if available) amount of such loss or decline. Following the occurrence and
continuance of an Event of Default, any monies constituting insurance proceeds
shall, if received by the Borrowers, be held in trust for the benefit of the
Banks and promptly paid over to the Agent, on behalf of the Banks, and all such
proceeds may, at the option of the Agent, either (i) be applied by the Banks to
the payment of the Loans in such manner as the Banks may reasonably determine,
or (ii) be disbursed to the Borrowers on such terms as are deemed appropriate by
the Banks for the repair, restoration and/or replacement of property in respect
of which such proceeds were paid. Otherwise, so long as no Event of Default has
occurred, any monies constituting insurance proceeds shall, if received by the
Agent, be disbursed to the Borrowers and, together with any such proceeds paid
directly to the Borrowers, shall be applied by the Borrowers to the repair,
restoration and/or replacement of property in respect of which such proceeds
were paid, all as the Borrowers reasonably deem appropriate.
(b) Maintain in good repair, working order and condition (ordinary
wear and tear and casualty excepted) in accordance with the general practice of
other businesses of similar character and size, all of those properties useful
or necessary to its business, and from time to time, each of the Company and its
Subsidiaries will make or cause to be made all appropriate repairs, renewals or
replacements thereof.
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 business and activities; and upon reasonable
notice permit representatives of any Bank to visit and inspect any of its
properties and examine and make abstracts from any of its books and records
during normal business hours and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Company and its Subsidiaries with officers and employees of the Company
and its Subsidiaries and with its independent certified public accountants.
5.7 Notices. Promptly give notice to the Agent and each Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the Company or
any of its Subsidiaries and any Governmental Authority, which in either case, if
not cured or if adversely determined, as the case may be, could have a Material
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Adverse Effect;
(c) any litigation or proceeding affecting the Company or any of
its Subsidiaries in which the amount involved is $500,000 or more and not
covered by insurance as reasonably determined by the Company's corporate counsel
or in which injunctive or similar relief is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, any Lien in favor
of 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 any Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan or (iii)
assessment of liability under the Coal Industry Retiree Health Benefit Act of
1992; and
(e) an event which has had or could reasonably be expected to have
a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrowers propose to take with respect thereto.
5.8 Environmental Laws. (a) Comply with, and require compliance by all
tenants and all subtenants, if any, with, all Environmental Laws and obtain and
comply with and maintain, and require that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, registrations or
permits required by Environmental Laws, except to the extent that failure to so
comply or obtain or maintain such documents could not reasonably be expected to
have a Material Adverse Effect;
(b) Comply with all lawful and binding orders and directives of all
Governmental Authorities respecting Environmental Laws; and
(c) Defend, indemnify and hold harmless the Agent and the Banks,
and their respective employees, agents, officers, directors, successors and
assigns from and against any 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 any
violation of or noncompliance with or liability under any Environmental Laws, or
any orders, requirements or demands of Governmental Authorities related thereto
which in each case relate to or arise in connection with any Borrower, any
Property or any
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activities relating to any other property or business of a Borrower or the
enforcement of any rights provided herein or in the other Loan Documents,
including, without limitation, attorneys' and consultants' fees, response costs,
investigation and laboratory fees, court costs and litigation expenses, except
to the extent that any of the foregoing arise out of the gross negligence or
willful misconduct of any of the foregoing enumerated parties. This indemnity
shall continue in full force and effect regardless of the termination of this
Agreement and the payment of the Notes.
5.9 Management Changes. Notify the Agent in writing within thirty (30)
days after any change of its executive officers.
5.10 Further Assurances. From time to time, at their expense,
faithfully preserve and protect the Agent's and the Bank's Lien on and security
interest in the Collateral as a continuing first priority perfected Lien,
subject only to Liens permitted under subsection 6.2, and shall do such other
acts and things as the Agent or the Required Banks in its or their sole
discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Security Documents and
to exercise and enforce its or their rights and remedies thereunder with respect
to the Collateral.
5.11 [INTENTIONALLY BLANK]
5.12 Pledge of Property. At any time and from time to time at the
written request of the Agent, each Borrower or Guarantor shall execute, deliver
and, if requested, record and/or file such security agreements, pledge
agreements, mortgages and/or related or similar documents as the Agent shall
reasonably request and take such further action as the Agent shall reasonably
request, in each case, in order to grant to the Agent (or other Person selected
by the Agent) for the benefit of the Banks, a Lien on all of such Borrower's
right, title and interest in all real or personal property owned by such
Borrower or Guarantor or any real or personal property acquired by such Borrower
or Guarantor after the Closing Date or, to the extent such Borrower or Guarantor
becomes a Borrower or Guarantor after the Closing Date, all of such Borrower's
right, title and interest in any and all assets of such Borrower or Guarantor,
in each case as additional collateral for the obligations of the Borrowers to
the Agent and the Banks under this Agreement and the other Loan Documents.
5.13 Notice and Joinder of New Subsidiaries. Notify the Agent as soon
as practicable after acquiring or creating a new Subsidiary, and cause such new
Subsidiary to execute and deliver to the Agent (a) at the Agent's sole election,
either a Joinder Agreement pursuant to which such Subsidiary shall become a
Borrower hereunder, or a Guarantee pursuant to which such Subsidiary shall
guarantee the obligations of the Borrowers
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hereunder and under the other Loan Documents and (b) a Security Agreement or
such other Collateral Documents as the Agent shall reasonably request, including
UCC Financing Statements. In addition, at the request of the Agent, the stock of
such Subsidiary shall be pledged to the Agent under a Pledge Agreement and all
stock certificates representing interests in such Subsidiary shall be delivered
to the Agent together with undated stock powers. If the Subsidiary shall become
a Borrower hereunder, the Borrowers shall, if requested by the Agent, execute
and deliver to the Agent new Notes which shall include as an obligor the new
Subsidiary. The Borrowers shall execute and deliver and cause any Guarantor to
execute and deliver to the Agent such further documents and take such actions as
the Agent may reasonably request.
5.14 Interest Rate Hedge Agreements. Within thirty (30) days of the
Closing Date, enter into, with either one or more Banks or with one or more
other financial institutions organized under the laws of the United States, the
unsecured long-term debt obligations of which are rated "A3" or higher by
▇▇▇▇▇'▇ or "A-" or higher by S&P, and issued by a bank or trust company having
capital, surplus and undivided profits aggregating at least $250,000,000, such
interest rate protection contracts (collectively, the "Interest Rate Hedge
Agreements"), with terms of at least three (3) years, as are necessary to cause
at least $30,000,000 of the Borrowers' Indebtedness to bear interest either at a
fixed rate or be subject to such contracts such that such Indebtedness is
protected against an increase in rates of 200 basis points or more. Such
contracts shall conform to ISDA standards, shall (unless with a Bank) be subject
to such intercreditor and subordination provisions as may be required by the
Agent and shall otherwise be acceptable to the Agent. Any Interest Hedge
Agreements shall be unsecured unless entered into with a Bank, in which case
obligations thereunder shall be secured by the Security Documents.
5.15 Good Standing. (a) Within one hundred and eighty (180) days of the
Closing Date (i) cause ▇▇▇▇▇▇ Video Corporation to become in good standing in
the State of New Jersey and to be qualified to transact business as a foreign
corporation in the State of New York and (ii) cause Video King of ▇▇▇▇▇▇ County
to file with the State of New York its past due Biennial Statement.
(b) Within ninety (90) days of the Closing Date cause any financing
statements in favor of V.P.D. IV, Inc. to be removed of record.
SECTION 6. NEGATIVE COVENANTS
Each of the Borrowers hereby agrees that, so long as the Commitments
remain in effect, any Note remains outstanding and
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unpaid, any Letter of Credit remains outstanding or any other amount is owing to
any Bank or the Agent hereunder, such Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:
6.1 Financial Condition Covenants.
(a) Maintenance of Net Worth. Permit Consolidated Net Worth on any
day to be less than (i) from the Closing Date until January 31, 1998,
$96,839,000 and (ii) thereafter, the sum of (x) $96,839,000 plus (y)
seventy-five percent (75%) of Consolidated Net Income for each fiscal year
commencing with the fiscal year ending January 31, 1998, exclusive of any fiscal
year in which Consolidated Net Income is a negative and (z) one-hundred percent
(100%) of the Net Proceeds from the issuance after the Closing Date of Capital
Stock of any Borrower or Subsidiary thereof.
(b) Total Debt/OCF Leverage Ratio. Permit for any period of four
consecutive fiscal quarters ending on any date set forth below the Total
Debt/OCF Ratio to be greater than the number set forth opposite such date below:
================================================================================
Date Maximum Total Debt/OCF Ratio
================================================================================
October 31, 1997 4.50 to 1.00
January 31, 1998 4.30 to 1.00
April 30, 1998 4.00 to 1.00
July 31, 1998 3.50 to 1.00
The last day of each fiscal 3.25 to 1.00
quarter thereafter
================================================================================
(c) Minimum OCF. Permit for any period of four consecutive fiscal
quarters ending on any date set forth below OCF to be less than the number set
forth opposite such date below:
Date Minimum OCF
---- -----------
October 31, 1997 $13,036,000
January 31, 1998 13,920,000
April 30, 1998 15,218,000
July 31, 1998 18,182,000
October 31, 1998 19,281,000
January 31, 1999 19,700,000
April 30, 1999 20,009,000
July 31, 1999 20,218,000
The last day of each fiscal 20,218,000
quarter thereafter
(d) Capital Expenditures. (i) Permit for any fiscal quarter ending
on the dates set forth below Capital
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Expenditures of the Company and its Subsidiaries taken as a whole incurred in
such period to be greater than the numbers set in the Capital Expenditures
Projection Letter.
(ii) Permit for any fiscal year of the Company commencing with the
fiscal year ending January 31, 2000, Capital Expenditures of the Company and its
Subsidiaries taken as a whole incurred in such fiscal year to be greater than
$2,000,000 in the aggregate, or such other amount as may be approved in writing
by the Required Banks.
(iii) For purposes of clauses (i) and (ii) above, (A) Capital
Expenditures shall include the sum of the fair market value of all assets leased
by the Company and its Subsidiaries as lessee in connection with the operation
of any store (other than leases of real property but including leases of
fixtures and improvements) and (B) any amounts not expended in the period for
which it is permitted, may be carried over for expenditure in the next
twelve-month period but not any subsequent periods.
(e) Fixed Charge Coverage Ratio. At the last day of any fiscal
quarter of the Company commencing with the fiscal quarter ending October 31,
1997, permit the ratio of (i) OCF for the period of four consecutive fiscal
quarters ending on such day to (ii) Consolidated Fixed Charges for the period of
four consecutive fiscal quarters ending on such day to be less than 1.10 to
1.00.
6.2 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for Permitted Liens.
6.3 Limitation of Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness except:
(a) Indebtedness in respect of the Loans, the Notes and other
obligations of the Borrowers under this Agreement;
(b) Indebtedness of any Borrower or Guarantor to any other Borrower
or Guarantor; and
(c) Indebtedness (i) listed on Schedule 6.3, and renewals,
extensions and modifications thereof which do not increase the principal amount
thereof or otherwise significantly change the terms thereof unless otherwise
specified in Schedule 6.3 and (ii) Indebtedness under Capital Leases or secured
by Purchase Money Security Interests in an aggregate amount for both clauses (i)
and (ii) above not exceeding in the aggregate $2,000,000.
6.4 Limitations on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up
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or dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets, except that:
(a) any Subsidiary of the Company may be merged or consolidated
with or into the Company (provided that the Company shall be the continuing or
surviving corporation) or with or into any other Borrower (provided that such
Borrower shall be the continuing or surviving corporation); and
(b) any Subsidiary of the Company may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to a Borrower; provided that, immediately after any such transaction
referred to in paragraphs (a) and (b) above and after giving effect thereto,
each of the Borrowers is in compliance with this Agreement and no Default or
Event of Default shall have occurred and be continuing or result from such
transaction.
6.5 Limitation on Sale of Assets. Convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, receivables and leasehold interests), whether now owned or
hereafter acquired, except:
(a) any sale, transfer or lease of assets in the ordinary course of
business which are no longer necessary or required in the conduct of the
Borrowers' or such Subsidiary's business;
(b) transactions involving the sale or lease of inventory in the
ordinary course of business;
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection in the ordinary course of business of such accounts receivable;
(d) as permitted by subsection 6.4; and
(e) in addition to the above subsections 6.5(a) through 6.5(d)
inclusive, any such conveyances, sales, leases, assignments, transfers or other
disposals, the aggregate amount of which for the Company and its Subsidiaries
for any fiscal year of the Company does not exceed $250,000; provided that (i)
such conveyance, sale, lease, assignment, transfer or other disposition is for
cash consideration which the officers or Board of Directors of the Company or
its Subsidiary, as the case may be, deems to be fair and reasonable and (ii) the
Net Proceeds are applied to the Loans to the extent provided in subsection 2.18.
6.6 Limitation on Distributions. Declare or pay any
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Distribution (whether in cash or property or obligations of a Borrower or any
Subsidiary thereof) in respect of any Borrower or any Subsidiary thereof, except
any Wholly-Owned Subsidiary may declare and pay dividends to a Borrower or
Guarantor.
6.7 Transactions with Affiliates. Except as expressly permitted in this
Agreement, directly or indirectly enter into any transaction or arrangement
whatsoever (including without limitations any purchase, sale, lease or exchange
of property or the rendering of any service) or make any payment to or otherwise
deal with any Affiliate, except, as to all of the foregoing in the ordinary
course of and pursuant to the reasonable requirements of such Borrower's and its
Subsidiary's business and upon fair and reasonable terms no less favorable to
such Borrower or such Subsidiary, as the case may be, than would be obtained in
a comparable arm's length transaction with a Person not an Affiliate.
6.8 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by such Borrower or any Subsidiary thereof of real or
personal property which has been or is to be sold or transferred by such
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations thereof.
6.9 Limitation on Contingent Obligations. Create, incur, assume or
suffer to exist any Contingent Obligation except:
(a) guarantees made in the ordinary course of its business by any
of the Borrowers or its Subsidiaries of obligations of any of their
Subsidiaries, provided those obligations are otherwise permitted under this
Agreement;
(b) Contingent Obligations described on Schedule 6.9; and
(c) Guarantees of the Borrowers' obligations under the Loan
Documents pursuant to the Guarantees.
6.10 Limitation on Investments, Loans and Advances. Purchase, hold or
acquire beneficially any stock, other securities or evidences of indebtedness
of, make or permit to exist any loans or advances to, or make or permit to exist
any investment or acquire any interest whatsoever in, any other Person, except:
(a) extensions of trade credit to customers in the ordinary course
of business;
(b) Permitted Investments;
(c) advances to employees of the Borrowers or
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their Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business;
(d) Capital Stock of any Subsidiary; provided that such Capital
Stock is pledged to the Agent for the benefit of the Banks pursuant to a Pledge
Agreement.
(e) loans, advances and capital contributions by a Borrower to the
Company or to any Borrower or Guarantor that is a Wholly-Owned Subsidiary of the
Company; and
(f) Permitted Acquisitions.
6.11 Limitation on Optional Payments and Modifications of Subordinated
Debt. Make any optional payment or prepayment on or redemption, defeasance or
purchase of any Subordinated Indebtedness; or amend, modify or change, or
consent or agree to any amendment, modification or change to any of the terms
(including the payment terms) of any Subordinated Debt.
6.12 Limitation on Negative Pledge Clauses. Enter into any agreement
with any Person other than the Banks which prohibits or limits the ability of
any Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its properties, assets or revenues, whether now owned
or hereafter acquired; provided that a Borrower or Guarantor may enter into such
an agreement in connection with a Purchase Money Security Interest permitted
hereunder, provided that such prohibition or limitation is by its terms
effective only against the assets subject to such Lien.
6.13 Fiscal Year. Permit the fiscal year of a Borrower or Guarantor to
end on a day other than January 31.
6.14 Limitation on Conduct of Business. Enter into any business either
directly or through any Subsidiary except for businesses in the United States in
which the Borrowers and their Subsidiaries are engaged on the date of this
Agreement and any business in the United States directly related to such
existing businesses; provided that, the Borrowers may enter into franchise
agreements with franchisees located outside the United States.
6.15 Changes in Organizational Documents. None of the Borrowers shall
amend in any respect its certificate of incorporation (including any provisions
or resolutions relating to Capital Stock), by-laws or other organizational
documents without providing at least thirty (30) calendar days' prior written
notice to the Agent, in the event such change would be adverse to the Agent
and/or the Banks as determined by the Agent in its sole discretion.
6.16 Landlord Waivers. Permit, on any date on and after one-hundred
twenty (120)_ days after the Closing Date, more
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than one-third (1/3) in Dollar amount of all of the Borrowers' Inventory (as
defined in the Security Agreement) to be maintained at locations which (a) are
not owned by a Borrower free and clear of any mortgage or other Lien, except any
Lien in favor of the Agent for the benefit of the Banks or (b) are leased by a
Borrower unless (i) the owner of such location has executed a landlord waiver in
form and substance satisfactory to the Agent or (ii) such location is in a state
in which the Company has demonstrated to the Agent, and the Agent in its
reasonable judgment concurs, that any potential statutory Lien in favor of the
owner of such location would be junior in priority to the Lien in favor of the
Agent, for the benefit of the Banks, in the Borrowers' Inventory present at such
location.
SECTION 7. EVENTS OF DEFAULT
7.1 Events of Default. If any of the following events shall occur and
be continuing:
(a) A Borrower shall fail to pay any principal of or interest on
any Note, any Reimbursement Obligation or any other amount payable hereunder or
thereunder (including without limitation any fees) when due in accordance with
the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by a
Borrower herein or in any other Loan Document or which is contained in any
certificate or financial statement furnished at any time under or in connection
with this Agreement shall prove to have been incorrect or misleading in any
material respect on or as of the date made or deemed made; or
(c) A Borrower shall default in the observance or performance of
any agreement contained in Section 6 of this Agreement; or
(d) (i) A Borrower shall default in the observance or performance
of any other agreement contained in this Agreement (other than as provided in
subsection (a) through (c) above) or any other Loan Document or (ii) a Guarantor
shall default in the observance or performance of any agreement contained in the
Guarantee executed by it or any other Loan Document to which it is a party, and
in each case any such default shall continue unremedied for a period of 20 days;
or
(e) A Borrower or any Subsidiary thereof shall (i) default in the
payment of any principal of or interest on or any other amount payable on any
Indebtedness (other than the Notes) or in the payment of any Contingent
Obligation (other than the Guarantees), beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under which
such Indebtedness or Contingent Obligation was created and the
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aggregate amount of such Indebtedness and/or Contingent Obligations in respect
of which such default or defaults shall have occurred is at least $250,000; or
(ii) default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Contingent Obligation 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 Contingent
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 and payable prior to its stated maturity or such
Contingent Obligation to become payable; or
(f) (i) A Borrower or any Subsidiary thereof 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 or other similar official
for it or for all or any substantial part of its assets, or a Borrower or any of
its Subsidiaries shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against a Borrower or any of its
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 a
Borrower or any of its 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,
satisfied, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) a Borrower or any of its 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) a Borrower
or any of its Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they generally become due;
or
(g) One or more judgments or decrees shall be entered against a
Borrower or any of its Subsidiaries involving in the aggregate a liability
(excluding any such judgments or orders which are fully covered by insurance,
subject to any customary deductible, and under which the applicable insurance
carrier has
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acknowledged such full coverage in writing) of $250,000 or more and all such
judgments or decrees shall not have been vacated, discharged, settled, satisfied
or paid, or stayed or bonded pending appeal, within 30 days from the entry
thereof; or
(h) Any Change in Control shall occur; or
(i) A Borrower or any Subsidiary thereof shall fail to (i) comply
with or require compliance by all tenants and, to the extent possible, all
subtenants, if any, with all Environmental Laws or obtain and comply with and
maintain, or require that all tenants and, to the extent possible, all
subtenants, obtain and comply with and maintain, any and all licenses,
approvals, registrations or permits required by Environmental Laws except to the
extent that failure to so comply or obtain or maintain such documents could not
reasonably be expected to have a Material Adverse Effect; or (ii) comply with
all lawful and binding orders and directives of all Governmental Authorities
respecting Environmental Laws except to the extent that failure to so comply
could not reasonably be expected to have a Material Adverse Effect; or
(j) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan,
(ii) any "accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan or any Lien in favor
of the PBGC or a Plan shall arise on the assets of the Company 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 institution of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Banks, 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, (v) the Company
or any Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Banks is likely to, incur any liability in connection with a withdrawal
from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist in regard to a Plan; and in each
case in clauses (i) through (vi) above, such event or condition, together with
all other such events or conditions, if any, could reasonably be expected to
have a Material Adverse Effect; or
(k) the Company shall cease to own, directly or indirectly,
one-hundred percent (100%) of the legal and beneficial ownership of each other
Borrower except pursuant to a transaction permitted under subsection 6.4; or
(l) Any Security Document shall, at any time, cease to be in full
force and effect (unless released by the
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Agent) or shall be declared null and void, or the validity or enforceability
thereof shall be contested by any Borrower or Guarantor or the Agent shall not
have or shall cease to have valid, perfected security interests in the
collateral subject thereto, subject to no other liens whatsoever, except
Permitted Liens;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to a Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement, the Notes and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall automatically and immediately become due and payable,
and (B) if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the consent of the Required Banks, the
Agent may, or upon the written request of the Required Banks, the Agent shall,
by notice to the Company declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with the consent
of the Required Banks, the Agent may, or upon the written request of the
Required Banks, the Agent shall, by notice of default to the Company, declare
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement, the Notes and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable.
With respect to all Letters of Credit with respect to which presentment
for honor shall not have occurred at the time of an acceleration pursuant to the
preceding paragraph, the Borrowers shall at such time deposit in a cash
collateral account opened by the Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. The Borrowers hereby
grant to the Agent, for the benefit of each Issuing Bank, the L/C Participants
and the Banks and the Agent, a security interest in such cash collateral to
secure all obligations of the Borrowers under this Agreement and the other Loan
Documents. Amounts held in such cash collateral account shall be applied by the
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay other obligations of
the Borrowers hereunder and under the Notes and the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Borrowers hereunder and under the Notes and the other Loan Documents shall
have been paid in full, the balance, if
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any, in such cash collateral accounts shall be returned to the Borrowers. The
Borrowers shall execute and deliver to the Agent, for the account of each
Issuing Bank, the L/C Participants, the Banks and the Agent, such further
documents and instruments as the Agent may request to evidence the creation and
perfection of the within security interest in such cash collateral account.
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 Appointment. Each Bank hereby irrevocably designates and appoints
PNC Bank, National Association as the Agent of such Bank under this Agreement
and the other Loan Documents, and each such Bank irrevocably authorizes PNC
Bank, National Association, as the Agent for such Bank, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Agent by the terms of this Agreement and the other Loan Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement and
the other Loan Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or therein, or any
fiduciary relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement and the other Loan Documents or otherwise exist against the Agent. PNC
Bank, National Association agrees to act as the Agent on behalf of the Banks to
the extent provided in this Agreement and the other Loan Documents.
8.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to engage and pay for the advice and
services of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible to the Banks for the negligence or misconduct of any
agents or attorneys in-fact selected by it with reasonable care.
8.3 Exculpatory Provisions. The Banks hereby agree that neither the
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for its or such Person's own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by a Borrower or any
officer thereof contained in this Agreement, the other Loan Documents or in any
certificate,
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report, statement or other document referred to or provided for in, or received
by the Agent under or in connection with, this Agreement or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the Notes or the other Loan Documents or for any failure of the
Borrowers (or any of them) to perform their obligations hereunder or thereunder.
The Agent shall not be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Loan Documents, or to inspect
the properties, books or records of the Borrowers (or any of them).
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to one or more of the Borrowers), independent
accountants and other experts selected by such Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Agent. The Agent shall be fully justified in failing or refusing
to take any action under this Agreement or the other Loan Documents unless it
shall first receive such advice or concurrence of the Required Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
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 Banks hereby agree that the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement, the Notes or the other Loan Documents in
accordance with a request of the Required Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks and
all future holders of the Notes.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
it has received notice from a Bank or a 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 Agent receives such a notice, the
Agent shall give notice thereof to the Banks. The Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Banks; provided that unless and until the Agent shall have
received such directions, it 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 Banks.
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8.6 Non-Reliance on Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of its respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrowers, shall be deemed to
constitute any representation or warranty by the Agent to any Bank. Each Bank
represents to the Agent that it has, independently and without reliance upon the
Agent or any other Bank, 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 Borrowers and made its own decision to make its Loans
hereunder and enter into this Agreement and each other Loan Document to which it
is a party. Each Bank also represents that it will, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrowers and
Guarantors. Except for notices, reports and other documents expressly required
to be furnished to the Banks by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Borrowers which may come
into the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
8.7 Indemnification. The Banks agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrowers and without
limiting the obligation, if any, of the Borrowers to do so) in Dollars, ratably
according to their respective Commitment Percentages, 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
Notes) be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Bank shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this Section 8.7 shall survive the payment of the Notes and all
other amounts payable hereunder.
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8.8 Agent in Its Individual Capacity. The Agent and its Affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrowers and Guarantors (or any of them) as though the Agent were not
the Agent hereunder. With respect to its Loans made or renewed by it and any
Note issued to it, the Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" shall include the
Agent in its individual capacity.
8.9 Release of Liens. Upon the sale of any assets of the Borrowers in
compliance with subsection 6.5, the Agent will take such action as may be
necessary to evidence the release of the Banks' Lien on such assets, including
delivering to the Borrowers, at the cost of the Borrowers, appropriate releases,
Uniform Commercial Code termination statements and mortgage satisfaction
documents, as appropriate.
8.10 Successor Agent. The Agent may resign as Agent hereunder and under
the other Loan Documents upon 30 days' notice to the Banks and the Company. If
the Agent shall resign, then the Required Banks shall appoint from among the
Banks a successor Agent for the Banks, which appointment shall be subject to the
approval of the Company, which approval shall not be unreasonably withheld,
delayed or conditioned. Any rejection by the Company of a successor agent shall
specify the reasons for such rejection. Failure of the Company to approve or
reject a successor agent within ten days following request for approval shall be
deemed to constitute approval. Upon such appointment and approval, such
successor agent shall succeed to the rights, powers and duties of the Agent and
the term "Agent" shall mean such successor agent effective upon its appointment
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or the other Loan Documents or any holders of
the Notes. After any retiring Agent's resignation, the provisions of this
Section 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
8.11 Beneficiaries. Except as expressly provided herein, the provisions
of this Section 8 are solely for the benefit of the Agent and the Banks, and the
Borrowers shall not have any rights to rely on or enforce any of the provisions
hereof. In performing its functions and duties under this Agreement and the
other Loan Documents, the Agent shall act solely as agent of the Banks and does
not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrowers.
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SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Note any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. With the
written consent of the Required Banks, the Agent and the Borrowers may, from
time to time, enter into written amendments (including letter amendments),
supplements or modifications hereto and to the Notes and the other Loan
Documents for the purpose of adding any provisions to this Agreement, the Notes
or any other Loan Document or changing in any manner the rights of the Banks or
of the Borrowers hereunder or thereunder or waiving, on such terms and
conditions as the Agent may specify in such instrument, any of the requirements
of this Agreement, the Notes or any other Loan Document or any Default or Event
of Default and its consequences; provided, however, that no such waiver and no
such amendment, supplement or modification shall directly or indirectly (a)
reduce the amount or extend the maturity of any Note or any installment thereof,
or reduce the rate of interest or extend the time of payment of interest
thereon, or reduce any fee payable to any Bank hereunder or extend the period
for payment thereof, or change the duration or the amount of any Bank's
Commitment in each case without the consent of the Bank affected thereby or (b)
or amend, modify or waive any provision of this subsection or reduce the
percentage specified in the definition of Required Banks, or amend the
definition of Permitted Acquisitions, or consent to the assignment or transfer
by the Borrowers or the Guarantors of any of their rights and obligations under
this Agreement, the Notes and the other Loan Documents, or release all or
substantially all of the Collateral or extend the maturity of any Letter of
Credit beyond the Termination Date in each case without the written consent of
all the Banks, or (c) amend, modify or waive any provision of Section 8 without
the written consent of the then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Banks and shall be
binding upon the Borrowers, the Banks, the Agent and all future holders of the
Notes. In the case of any waiver, the Borrowers, the Banks and the Agent shall
be restored to their former position and rights hereunder and under the
outstanding Notes, 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. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy, telegraph or telex confirmed in writing), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or three days after being deposited in the mail, postage
prepaid, or the next Business Day if sent by reputable overnight courier,
postage prepaid, for delivery on the next Business Day, or, in the
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case of telecopy notice, when received during normal business hours, or, in the
case of telegraphic notice, when delivered to the telegraph company, or, in the
case of telex notice, when sent, answerback received, addressed as follows in
the case of the Borrowers or the Agent, and as set forth in Schedule I in the
case of the other parties hereto, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
The Borrowers c/o West Coast Entertainment Corporation
or any of them: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: T. ▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Agent: PNC Bank, National Association
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to: PNC Bank, National Association
Multi-Bank Loan Administration
One PNC Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that (a) any notice, request or demand to or upon the Agent or the
Banks pursuant to subsections 2.3, 2.5, 2.16, 2.17, 2.18 and 2.26 shall not be
effective until received and (b) any notice of a Default or Event of Default
hereunder shall be sent by telecopy or reputable overnight courier.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, 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
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connection herewith shall survive the execution and delivery of this Agreement,
the Notes and the other Loan Documents.
9.5 Payment of Expenses and Taxes. Each of the Borrowers jointly and
severally agrees (a) to pay or reimburse the Agent for all its out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and the syndication of, this Agreement, the Notes, the other Loan
Documents and any other documents executed and delivered in connection herewith,
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Agent, (b) to pay or reimburse the Agent for all its out-of-pocket costs
and expenses incurred in connection with any amendment, supplement or
modification to this Agreement, the Notes and the other Loan Documents and any
other documents executed and delivered in connection therewith, including
without limitation, the reasonable fees and disbursements of counsel, (c) pay or
reimburse the Agent and each Bank for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the Notes, the other Loan Documents and any such other documents,
including, without limitation, reasonable fees and disbursements of counsel to
the Agent and to the several Banks, (d) to pay, indemnify, and hold each Bank
and the 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 taxes, if any, which may be payable or determined to be payable
in connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes, the
other Loan Documents and any such other documents, and (e) to pay, indemnify,
and hold each Bank and the Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions (whether sounding
in contract, in tort or on any other ground), judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of or in any other way
arising out of or relating to, this Agreement, the Notes, the other Loan
Documents, or any such other documents contemplated by or referred to herein or
therein or any action taken by any Bank or the Agent with respect to the
foregoing (all the foregoing, collectively, the "indemnified liabilities"),
provided, that the Borrowers shall have no obligation hereunder to the Agent or
any Bank with respect to indemnified liabilities arising from (i) the gross
negligence or willful misconduct of such person or (ii) legal proceedings
commenced against such person by any other Bank. The agreements in this
subsection shall survive repayment of the Notes and all other amounts payable
hereunder.
9.6 Successors and Assigns. (a) Whenever in this Agreement any of the
parties hereto is referred to, such reference
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shall be deemed to include the successors and permitted assigns of such party;
and all covenants, promises and agreements by or on behalf of a Borrower, the
Agent or the Banks that are contained in this Agreement shall bind and inure to
the benefit of their respective successors and assigns. No Borrower or Guarantor
may assign or transfer any of their rights or obligations under this Agreement
or the other Loan Documents without the prior written consent of each Bank.
(b) Each Bank may, in accordance with applicable law, sell to any
Bank and, with the consent of the Company and the Agent (which consents shall
not be unreasonably withheld) to one or more banks or other financial
institutions (each, a "Purchasing Bank") all or any part of its interests,
rights and obligations under this Agreement, the Notes and the other Loan
Documents (including all or a portion of its Commitments and the Loans at the
time owing to it and the Notes held by it); provided, however, that (i) so long
as no Event of Default shall exist and be continuing, such assignment shall be
in an amount not less than $5,000,000 (or the lesser of (x) the full amount of
such Bank's Commitments and (y) such amount as the Company and the Agent shall
agree in their sole discretion), (ii) such assignment shall be of all or a pro
rata portion of all of such assigning Bank's interests hereunder (i.e., no Bank
may sell a non-pro rata interest) and (iii) the parties to each such assignment
shall execute and deliver to the Agent and the Company for its acceptance and
recording in the Register an Assignment and Acceptance, together with the Note
or Notes subject to such assignment and a processing and recordation fee of
$3,500. Upon acceptance and recording pursuant to paragraph (e) of this
subsection 9.6, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five Business Days after
the execution thereof, (A) such Purchasing Bank shall be a party hereto and, to
the extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Bank under this Agreement and (B) the assigning Bank
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all or the remaining portion of an
assigning Bank's rights and obligations under this Agreement and the other Loan
Documents, such Bank shall cease to be a party hereto but shall continue to be
entitled to the benefits of subsections 2.19, 2.20, 2.21, 2.22 and 9.5 (to the
extent that such Bank's entitlement to such benefits arose out of such Bank's
position as a Bank prior to the applicable assignment), as well as to any
Commitment Fees accrued for its account and not yet paid). Such Assignment and
Acceptance shall be deemed to amend this Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing Bank and the
resulting amounts and percentages held by the Banks arising from the purchase by
such Purchasing Bank of all or a portion of the rights and obligations of such
assigning Bank under this Agreement, the
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Notes and the other Loan Documents. Notwithstanding any provision of this
subsection 9.6, the consent of the Company shall not be required for any
assignment which occurs at any time when any of the events described in
subsection 7.1(f) shall have occurred and be continuing.
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(c) By executing and delivering an Assignment and Acceptance, the
assigning Bank thereunder and the Purchasing Bank thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Bank warrants that it is the legal and beneficial owner of
the interest being assigned thereby, free and clear of any adverse claim and
that its Commitment(s), and the outstanding balances of its Loans, without
giving effect to assignments thereof which have not become effective, are as set
forth in such Assignment and Acceptance, (ii) except as set forth in (i) above,
such assigning Bank makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the other Loan Documents, or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto, or the financial condition of the
Borrowers or any Subsidiary thereof or the performance or observance by the
Borrowers or any Subsidiary thereof of any of its obligations under this
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (iii) such Purchasing Bank represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such Purchasing Bank confirms that it has received a copy of
this Agreement, together with copies of the most recent financial statements
delivered pursuant to subsection 5.1 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (v) such Purchasing Bank will independently
and without reliance upon the Agent, such assigning Bank or any other Bank and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (vi) such Purchasing Bank
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; and (vii) such Purchasing Bank agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Bank including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
2.21 to deliver the forms prescribed by the Internal Revenue Service of the
United States certifying as to the Purchasing Bank's exemption from United
States withholding taxes with respect to all payments to be made to the
Purchasing Bank under this Agreement.
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(d) The Agent shall maintain at its offices in Philadelphia,
Pennsylvania a copy of each Assignment and Acceptance and the names and
addresses of the Banks, and the Commitments of, and principal amount of the
Loans owing to, each Bank pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in the absence of
manifest error and the Borrowers, the Agent and the Banks may treat each Person
whose name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Agreement. The Register shall be available
for inspection by the Borrowers and any Bank at any reasonable time and from
time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Bank and a Purchasing Bank (and in the case of a
Purchasing Bank that is not then a Bank or an Affiliate thereof, by the Company
and the Agent) together with the Note or Notes subject to such assignment and
the processing and recordation fee referred to in paragraph (b) above, the Agent
shall promptly (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give notice thereof to
the Banks. Within five Business Days after receipt of notice, the Borrowers, at
their own expense, shall execute and deliver to the Agent, in exchange for the
surrender of the original Notes, (A) new Notes to the order of such Purchasing
Bank in an amount equal to the Commitments assumed and (B) if the assigning Bank
has retained a Commitment or, with respect to assignments occurring after the
termination of the Commitments, a portion of Loans, new Notes, as appropriate,
to the order of such assignor in the respective amount equal to the Loans
retained by it and/or the Commitments retained by it, as the case may be. Such
new Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note(s); such new Notes shall be dated the
date of the surrendered Notes which they replace and shall otherwise be in
substantially the form of Exhibit A-1 and A-2 hereto, as appropriate. Canceled
Notes shall be returned to the Company.
(f) Each Bank may without the consent of the Company or the Agent
(except to the extent provided below) sell participations to one or more banks
or other entities (each a "Participant") in any Loan owing to such Bank, any
Note held by such Bank, any Commitment of such Bank or any other interest of
such Bank hereunder and under the other Loan Documents, provided, however, that
(i) such Bank's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, (ii) such Bank shall remain solely responsible
to the other parties hereto for the performance of such obligations, (iii) such
Bank shall remain the holder of any such Note for all purposes under this
Agreement and the other Loan Documents, (iv) the Borrowers, the Banks and the
Agent shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and
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obligations under this Agreement and the other Loan Documents, (v) in any
proceeding under the Bankruptcy Code the Bank shall be, to the extent permitted
by law, the sole representative with respect to the obligations held in the name
of such Bank, whether for its own account or for the account of any Participant,
(vi) such Bank shall retain the sole right to approve, without the consent of
any Participant, any amendment, modification or waiver of any provision of this
Agreement or the Note or Notes held by such Bank or any other Loan Document,
other than any such amendment, modification or waiver with respect to any Loan
or Commitment in which such Participant has an interest that forgives principal,
interest or fees or reduces the interest rate or fees payable with respect to
any such Loan or Commitment, postpones any date fixed for any regularly
scheduled payment of principal of, or interest or fees on, any such Loan,
releases any guarantor of such Loan or releases all or substantially all of the
Collateral, if any, securing any such Loan.
(g) If amounts outstanding under this Agreement and the Notes are
due or unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement and any Note and other Loan Document to the same
extent as if the amount of its participating interest were owing directly to it
as a Bank under this Agreement or any Note or any other Loan Document, provided
that in purchasing such participation such Participant shall be deemed to have
agreed to share with the Banks the proceeds thereof as provided in subsection
9.8. The Borrowers also agree that each Participant shall be entitled to the
benefits of subsections 2.19, 2.20, 2.21, 2.22 and 9.5 with respect to its
participation in the Commitments and the Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive any greater amount
pursuant to such subsections than the assigning Bank would have been entitled to
receive in respect of the amount of the participation transferred by such
assigning Bank to such Participant had no such transfer occurred.
(h) If any Participant of a Bank is organized under the laws of any
jurisdiction other than the United States or any state thereof, the assigning
Bank, concurrently with the sale of a participating interest to such
Participant, shall cause such Participant (i) to represent to the assigning Bank
(for the benefit of the assigning Bank, the other Banks, the Agent and the
Borrowers) that under applicable law and treaties no taxes will be required to
be withheld by the Agent, the Borrowers or the assigning Bank with respect to
any payments to be made to such Participant in respect of its participation in
the Loans and (ii) to agree (for the benefit of the assigning Bank, the other
Banks, the Agent and the Borrowers) that it will deliver the tax forms and other
documents required to be delivered pursuant to paragraph 2.21(b) and comply from
time to time with all applicable U.S. laws
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90
and regulations with respect to withholding tax exemptions.
(i) Any Bank may at any time assign all or any portion of its
rights under this Agreement and the Notes issued to it to a Federal Reserve
Bank; provided that no such assignment shall release a Bank from any of its
obligations hereunder.
(j) Any bank becoming a party to this Agreement pursuant to
subsection 2.16(g) hereof (an "Additional Bank") shall, at least seven (7) days
before the effective date of such bank's joinder hereto, complete, execute and
deliver to the Agent a New Bank Joinder. Such New Bank Joinder shall include,
among other things, a joinder to this Agreement and otherwise be satisfactory to
the Agent and the Borrowers. Upon the effective date of such joinder, such
Additional Bank shall be a party hereto and shall be one of the Banks hereunder
for all purposes except that such Additional Bank's rights shall be limited in
the following respects as more fully set forth in such joinder: (i) on the
effective date of such joinder the Borrowers shall repay all outstanding Base
Rate Tranche A Loans and Base Rate Tranche B Loans and reborrow a like amount of
Base Rate Tranche A Loans and Base Rate Tranche B Loans from the Banks,
including the Additional Bank, according to their new Commitment Percentages and
(ii) such Additional Bank shall not participate in any Eurodollar Loans which
are outstanding on the effective date of such joinder but shall participate in
all new Loans made to the Borrowers after the effective date of such joinder
including, without limitation, new Eurodollar Loans and renewals and conversions
of Eurodollar Loans. If the Borrowers should (i) renew after the effective date
of such joinder any Eurodollar Loans existing on such date or (ii) convert after
the date of such joinder any Eurodollar Loans existing on such date, the
Borrowers shall be deemed to repay the applicable Loans on the conversion or
renewal date, as the case may be, and then reborrow a similar amount on such
date so that the Additional Bank shall participate in such Loans after such
renewal or conversion date. Any increase in the Commitments pursuant to
subsection 2.16(g) and this subsection 9.6(j) shall increase the Tranche B
Commitments and not the Tranche A Commitments. Simultaneously with the execution
and delivery of such joinder pursuant to which such Additional Bank shall join
this Agreement (i) each Bank's Commitments shall be readjusted so that each Bank
has the same percentage of the Tranche A Commitments as it does of the Tranche B
Commitments and (ii) the Borrowers shall execute and deliver to each Bank a new
Tranche A Note and a new Tranche B Note in the respective amounts of each Bank's
new Tranche A Commitment and Tranche B Commitment.
9.7 Disclosure of Information. Unless otherwise consented to by the
Company in writing, each of the Banks and the Agent agrees (on behalf of itself
and each of its affiliates, directors, officers, employees and representatives)
to use reasonable precautions to keep confidential, in accordance with its
customary procedures for handling confidential information of
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91
the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Company pursuant to this Agreement;
provided that nothing herein shall limit the disclosure of any such information
(a) to the extent required by statute, rule, regulation or judicial process, (b)
to counsel for any Bank or the Agent, (c) to bank examiners, auditors or
accountants, (d) to the Agent or any other Bank, (e) in connection with any
litigation to which any one or more of the Banks or the Agent is a party
involving one or more Borrowers or Guarantors or its or their properties or in
any way relating to this Agreement or any other Loan Documents or any Loans or
other obligations of one or more Borrowers or Guarantors to the Agent or any
Bank and (f) to any Participant or Purchasing Bank (or prospective Participant
or Purchasing Bank) so long as such Participant or Purchasing Bank (or
prospective Participant or Purchasing Bank) agrees to comply with the
requirements of this Section.
9.8 Adjustments; Set-off. (a) If any Bank (a "benefitted Bank") shall
at any time receive any payment of all or part of its Loans or the Reimbursement
Obligations owing to it, 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 subsection 7.1(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Bank, if any, in respect of such other Bank's Loans or the
Reimbursement Obligations owing to it, or interest thereon, such benefitted Bank
shall purchase for cash from the other Banks such portion of each such other
Bank's Loans owing to it or the Reimbursement Obligations owing to it, or shall
provide such other Banks with the benefits of any such collateral, or the
proceeds thereof, as shall be necessary to cause such benefitted Bank to share
the excess payment or benefits of such collateral or proceeds ratably with each
of the Banks; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Bank, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. Each of the Borrowers,
jointly and severally agrees that each Bank so purchasing a portion of another
Bank'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 Bank were
the direct holder of such portion.
(b) In addition to any rights and remedies of the Banks provided by
law, upon the occurrence and during the continuance of an Event of Default, each
Bank shall have the right, without prior notice to the Borrowers (or any of
them), any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by the
Borrowers hereunder or under the Notes (whether at the stated maturity, by
acceleration or otherwise) to set-off and
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appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Bank to or for the credit or the account of one or more Borrowers.
Each Bank agrees promptly to notify the Company and the Agent after any such
set-off and application made by such Bank, provided that the failure to give
such notice shall not affect the validity of such set-off and application.
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 Company, on behalf of the Borrowers, and each of the
Banks.
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 other Loan Documents represent
the agreement of the parties hereto with respect to the subject matter hereof,
and there are no promises, undertakings, representations or warranties by the
Agent or any Bank relative to the subject matter hereof not expressly set forth
or referred to herein or in the other Loan Documents.
9.12 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
COMMONWEALTH OF PENNSYLVANIA.
9.13 Submission To Jurisdiction; Waivers. Each of the Borrowers hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement or the Notes, or for recognition and
enforcement of any judgement in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the Commonwealth of Pennsylvania, the courts of
the United States of America for the Eastern District of Pennsylvania, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to the
venue of any such action or
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proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to the Company at its
address set forth in Section 9.2 or at such other address of which the Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this subsection any special, exemplary or punitive or consequential damages.
9.14 Acknowledgements. Each of Borrowers hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement, the Notes and the other Loan Documents;
(b) neither the Agent nor any Bank has any fiduciary relationship
to the Borrowers or the Guarantors (or any of them) and the relationship
hereunder between the Agent and Banks, on the one hand, and the Borrowers and
Guarantors, on the other hand, is solely that of debtor and creditor; and
(c) no joint venture exists among the Banks or among the Borrowers
and Guarantors (or any of them) and the Banks.
9.15 No Right of Contribution. No Borrower shall seek or be entitled to
any reimbursement from any other Borrower, or be subrogated to any rights of the
Banks against the Borrowers, in respect of any payments made pursuant to the
Loan Documents, until all amounts owing to the Banks hereunder and under the
Notes are paid in full and the Commitments are terminated.
9.16 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE AGENT AND THE
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN
DOCUMENT AND FOR ANY MANDATORY COUNTERCLAIM THEREIN.
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
ATTEST: WEST COAST ENTERTAINMENT
CORPORATION
By:
Name:
[seal] Title:
ATTEST: VIDEOSMITH, INCORPORATED
By:
Name:
[seal] Title:
ATTEST: WEST COAST FRANCHISING COMPANY
By:
Name:
[seal] Title:
ATTEST: PALMER WEST COAST CORPORATION
By:
Name:
[seal] Title:
ATTEST: ▇▇▇▇▇▇ VIDEO CORPORATION
By:
Name:
[seal] Title:
94
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ATTEST: ▇▇▇▇▇▇ INVESTMENT CORPORATION
By:
Name:
[seal] Title:
ATTEST: CASABLANCA DISTRIBUTING
CORPORATION
By:
Name:
[seal] Title:
ATTEST: RKT MERGER CO.
By:
Name:
[seal] Title:
ATTEST: SHOWTIME, INC.
By:
Name:
[seal] Title:
ATTEST: VIDEO GIANT INC.
By:
Name:
[seal] Title:
ATTEST: VIDEO KING OF ▇▇▇▇▇▇ COUNTY,
INC.
By:
Name:
[seal] Title:
ATTEST: KING VIDEO ENTERPRISES, INC.
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By:
Name:
[seal] Title:
ATTEST: WEST COAST FINANCING CORPORATION
By:
Name:
[seal] Title:
ATTEST: WEST COAST LICENSING
CORPORATION
By:
Name:
[seal] Title:
PNC BANK, NATIONAL
ASSOCIATION, as a Bank and as
Agent
By:
Name:
Title:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
SUMMIT BANK CORPORATION
By:
Name:
Title:
BANKBOSTON, N.A., F/K/A THE
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FIRST NATIONAL BANK OF BOSTON
By:
Name:
Title:
THE SUMITOMO BANK, LIMITED
By:
Name:
Title:
By:
Name:
Title:
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SCHEDULE I
Addresses of Banks
BANK ADDRESSES TRANCHE A TRANCHE B
COMMITMENT COMMITMENT
---------- ----------
PNC BANK, National Association $16,923,076.97 $3,076,923.09
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
FIRST UNION NATIONAL BANK 12,692,307.68 2,307,692.32
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SUMMIT BANK CORPORATION 8,461,538.45 1,538,461.53
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BANKBOSTON, N.A. 8,461,538.45 1,538,461.53
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention; ▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
THE SUMITOMO BANK, LIMITED 8,461,538.45 1,538,461.53
One Liberty Place
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
----------- -----------
$55,000,000 $10,000,000
98
99
CREDIT AGREEMENT
AMONG
WEST COAST ENTERTAINMENT CORPORATION,
VIDEOSMITH, INCORPORATED,
PALMER WEST COAST CORPORATION,
▇▇▇▇▇▇ VIDEO CORPORATION
▇▇▇▇▇▇ INVESTMENT CORPORATION
CASABLANCA DISTRIBUTING CORPORATION
RKT MERGER CO.,
SHOWTIME, INC.,
VIDEO GIANT INC.,
VIDEO KING OF ▇▇▇▇▇▇ COUNTY, INC.,
KING VIDEO ENTERPRISES, INC.
WEST COAST FINANCING CORPORATION,
WEST COAST LICENSING CORPORATION,
AND
WEST COAST FRANCHISING COMPANY
AS BORROWERS,
THE SEVERAL LENDERS FROM TIME TO TIME
PARTIES HERETO
AND
PNC BANK, NATIONAL ASSOCIATION,
AS AGENT
DATED AS OF DECEMBER 15, 1997
100
$65,000,000 CREDIT FACILITY
101
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS............................................................................................... 1
1.1 Defined Terms............................................................................................... 1
1.2 Other Definitional Provisions............................................................................... 24
SECTION 2A. RESTRUCTURE OF EXISTING INDEBTEDNESS..................................................................... 24
2A.1. Restructure of Existing Indebtedness...................................................................... 24
2A.2. Existing Documents Superseded............................................................................. 25
SECTION 2. LOANS AND TERMS OF COMMITMENTS............................................................................ 25
2.1 Commitments................................................................................................. 25
2.2 Notes....................................................................................................... 27
2.3 Procedure for Loans......................................................................................... 28
2.4 L/C Commitment.............................................................................................. 29
2.5 Procedure for Issuance of Letters of Credit................................................................. 31
2.6 L/C Fees, Commissions and Other Charges..................................................................... 31
2.7 L/C Participations.......................................................................................... 32
2.8 Reimbursement Obligation of the Borrowers................................................................... 33
2.9 Obligations Absolute........................................................................................ 33
2.10 Letter of Credit Payments.................................................................................. 34
2.11 Application................................................................................................ 34
2.12 Fees....................................................................................................... 34
2.13 Interest Rates and Payment Dates........................................................................... 35
2.14 Default Interest........................................................................................... 36
2.15 Inability to Determine Interest Rate....................................................................... 36
2.16 Termination, Reduction, Extension and Increase of
Commitments............................................................................................. 37
2.17 Optional Prepayment of Loans............................................................................... 41
2.18 Mandatory Prepayments...................................................................................... 42
2.19 Illegality................................................................................................. 43
2.20 Requirements of Law........................................................................................ 44
2.21 Taxes...................................................................................................... 45
2.22 Indemnity.................................................................................................. 47
2.23 Borrowers' Representative.................................................................................. 48
2.24 Pro Rata Treatment of Loans and Payments; Commitment
Fees.................................................................................................... 48
2.25 Payments................................................................................................... 48
2.26 Conversion and Continuation Options........................................................................ 49
2.27 Minimum Amounts of Tranches; Maximum Number of Tranches.................................................... 50
2.28 Use of Proceeds............................................................................................ 50
SECTION 3. REPRESENTATIONS AND WARRANTIES............................................................................ 50
3.1 Financial Condition......................................................................................... 50
3.2 No Change................................................................................................... 51
3.3 Corporate Existence; Compliance with Law.................................................................... 52
3.4 Corporate Power; Authorization; Enforceable Obligations..................................................... 52
3.5 No Legal Bar................................................................................................ 52
3.6 No Material Litigation...................................................................................... 53
3.7 No Default.................................................................................................. 53
-i-
102
Page
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3.8 Taxes....................................................................................................... 53
3.9 Federal Regulations......................................................................................... 53
3.10 ERISA...................................................................................................... 54
3.11 Investment Company Act..................................................................................... 54
3.12 Purpose of Loans........................................................................................... 54
3.13 Environmental Matters...................................................................................... 55
3.14 No Material Misstatements.................................................................................. 56
3.15 Title to Properties........................................................................................ 56
3.16 Intellectual Property...................................................................................... 57
3.17 No Burdensome Restrictions; List of Subsidiaries........................................................... 57
3.18 Security Interests......................................................................................... 57
3.19 Senior Debt Status......................................................................................... 57
3.20 Solvency................................................................................................... 57
3.21 Public Utility Holding Company Act......................................................................... 58
3.22 Insurance.................................................................................................. 58
3.23 Material Contracts; Franchise Agreements................................................................... 58
SECTION 4. CONDITIONS PRECEDENT...................................................................................... 59
4.1 Conditions to Initial Extension of Credit................................................................... 59
4.2 Conditions to Each Extension of Credit...................................................................... 61
4.3 Closing..................................................................................................... 62
SECTION 5. AFFIRMATIVE COVENANTS..................................................................................... 62
5.1 Financial Statements........................................................................................ 62
5.2 Certificates; Other Information............................................................................. 63
5.3 Payment of Obligations...................................................................................... 64
5.4 Conduct of Business and Maintenance of Existence............................................................ 64
5.5 Maintenance of Insurance; Property.......................................................................... 65
5.6 Inspection of Property; Books and Records; Discussions...................................................... 66
5.7 Notices..................................................................................................... 66
5.8 Environmental Laws.......................................................................................... 67
5.9 Management Changes.......................................................................................... 68
5.10 Further Assurances......................................................................................... 68
5.11 [INTENTIONALLY BLANK]...................................................................................... 68
5.12 Pledge of Property......................................................................................... 68
5.13 Notice and Joinder of New Subsidiaries..................................................................... 68
5.14 Interest Rate Hedge Agreements............................................................................. 69
5.15 Good Standing.............................................................................................. 69
SECTION 6. NEGATIVE COVENANTS........................................................................................ 69
6.1 Financial Condition Covenants............................................................................... 70
6.2 Limitation on Liens......................................................................................... 71
6.3 Limitation of Indebtedness.................................................................................. 71
6.4 Limitations on Fundamental Changes.......................................................................... 71
6.5 Limitation on Sale of Assets................................................................................ 72
6.6 Limitation on Distributions................................................................................. 72
6.7 Transactions with Affiliates................................................................................ 73
6.8 Sale and Leaseback.......................................................................................... 73
6.9 Limitation on Contingent Obligations........................................................................ 73
6.10 Limitation on Investments, Loans and Advances.............................................................. 73
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6.11 Limitation on Optional Payments and Modifications of
Subordinated Debt....................................................................................... 74
6.12 Limitation on Negative Pledge Clauses...................................................................... 74
6.13 Fiscal Year................................................................................................ 74
6.14 Limitation on Conduct of Business.......................................................................... 74
6.15 Changes in Organizational Documents........................................................................ 74
6.16 Landlord Waivers........................................................................................ 75
SECTION 7. EVENTS OF DEFAULT......................................................................................... 75
7.1 Events of Default........................................................................................... 75
SECTION 8. THE AGENT................................................................................................. 79
8.1 Appointment................................................................................................. 79
8.2 Delegation of Duties........................................................................................ 79
8.3 Exculpatory Provisions...................................................................................... 80
8.4 Reliance by Agent........................................................................................... 80
8.5 Notice of Default........................................................................................... 80
8.6 Non-Reliance on Agent and Other Banks....................................................................... 81
8.7 Indemnification............................................................................................. 81
8.8 Agent in Its Individual Capacity............................................................................ 82
8.9 Release of Liens............................................................................................ 82
8.10 Successor Agent............................................................................................ 82
8.11 Beneficiaries.............................................................................................. 83
SECTION 9. MISCELLANEOUS............................................................................................. 83
9.1 Amendments and Waivers...................................................................................... 83
9.2 Notices..................................................................................................... 84
9.3 No Waiver; Cumulative Remedies.............................................................................. 85
9.4 Survival of Representations and Warranties.................................................................. 85
9.5 Payment of Expenses and Taxes............................................................................... 85
9.6 Successors and Assigns...................................................................................... 86
9.7 Disclosure of Information................................................................................... 91
9.8 Adjustments; Set-off........................................................................................ 91
9.9 Counterparts................................................................................................ 92
9.10 Severability............................................................................................... 93
9.11 Integration................................................................................................ 93
9.12 GOVERNING LAW.............................................................................................. 93
9.13 Submission To Jurisdiction; Waivers........................................................................ 93
9.14 Acknowledgements........................................................................................... 94
9.15 No Right of Contribution................................................................................... 94
9.16 WAIVERS OF JURY TRIAL...................................................................................... 94
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SCHEDULES
SCHEDULE I Bank and Commitment Information
SCHEDULE II Existing Liens
SCHEDULE 3.1(c) List of Projections
SCHEDULE 3.3 List of Borrowers Not in Good Standing
SCHEDULE 3.15 List of Real Property
SCHEDULE 3.17 List of Subsidiaries
SCHEDULE 3.18 List of Filing Locations
SCHEDULE 3.22 Insurance
SCHEDULE 3.23 Material Contracts
SCHEDULE 4.1(b)(ii) List of Permitted Exceptions
SCHEDULE 6.3 Existing Indebtedness
SCHEDULE 6.9 Existing Contingent Obligations
EXHIBITS
EXHIBIT A-1 Form of Tranche A Note
EXHIBIT A-2 Form of Tranche B Note
EXHIBIT B Form of Assignment and Acceptance Agreement
EXHIBIT C-1 Form of Company Pledge Agreement
EXHIBIT C-2 Form of Subsidiary Pledge Agreement
EXHIBIT D Form of Security Agreement
EXHIBIT E Form of Guarantee
EXHIBIT F Form of Joinder Agreement
EXHIBIT G Form of Notice of Borrowing
EXHIBIT H Form of Legal Opinion of ▇▇▇▇ and ▇▇▇▇
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