REVOLVING CREDIT AGREEMENT
dated as of June 15, 1998
among
ANACOMP, INC.
BANKBOSTON, N.A. and the other lending institutions set forth on Schedule 1
hereto
and
BANKBOSTON, N.A., as Agent
with
BANCBOSTON SECURITIES INC. having acted as Arranger
TABLE OF CONTENTS
-----------------
1. DEFINITIONS AND RULES OF INTERPRETATION.......................................1
1.1. Definitions............................................................1
1.2. Rules of Interpretation...............................................17
2. THE REVOLVING CREDIT FACILITY................................................18
2.1. Commitment to Lend....................................................18
2.2. Commitment Fee........................................................19
2.3. Reduction of Total Commitment.........................................19
2.4. The Revolving Credit Notes............................................19
2.5. Interest on Revolving Credit Loans....................................20
2.6. Requests for Revolving Credit Loans...................................20
2.7. Conversion Options....................................................21
2.7.1. Conversion to Different Type of Revolving Credit Loan.........21
2.7.2. Continuation of Type of Revolving Credit Loan.................21
2.7.3. Eurocurrency Rate Loans.......................................22
2.8. Funds for Revolving Credit Loan.......................................22
2.8.1. Funding Procedures............................................22
2.8.2. Advances by Agent.............................................22
2.9. Optional Currencies...................................................23
2.9.1. Request for Optional Currency.................................23
2.9.2. Exchange Rate.................................................24
2.9.3. Multiple Denominations........................................24
2.9.4. Repayment.....................................................24
2.9.5. Funding.......................................................25
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.....................................25
3.1. Maturity.............................................................25
3.2. Mandatory Repayments of Revolving Credit Loans.......................25
3.3. Optional Repayments of Revolving Credit Loans........................26
4. LETTERS OF CREDIT...........................................................26
4.1. Letter of Credit Commitments.........................................26
4.1.1. Commitment to Issue Letters of Credit........................26
4.1.2. Letter of Credit Applications................................27
4.1.3. Terms of Letters of Credit...................................27
4.1.4. Reimbursement Obligations of Banks...........................27
4.1.5. Participations of Banks......................................27
4.2. Reimbursement Obligation of the Borrower.............................27
4.3. Letter of Credit Payments. .........................................28
4.4. Obligations Absolute.................................................29
4.5. Reliance by Issuer...................................................29
4.6. Letter of Credit Fee.................................................30
5. CERTAIN GENERAL PROVISIONS..................................................30
5.1. Closing Fee..........................................................30
5.2. Agent's Fee..........................................................30
5.3. Funds for Payments...................................................30
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5.3.1. Payments to Agent............................................30
5.3.2. No Offset, etc...............................................31
5.4. Computations.........................................................31
5.5. Inability to Determine Eurocurrency Rate.............................31
5.6. Illegality...........................................................32
5.7. Additional Costs, etc................................................32
5.8. Capital Adequacy.....................................................33
5.9. Certificate..........................................................34
5.10. Indemnity............................................................34
5.11. Interest After Default...............................................35
5.11.1. Overdue Amounts.............................................35
5.11.2. Amounts Not Overdue.........................................35
6. COLLATERAL SECURITY AND GUARANTIES..........................................35
6.1. Security of Borrower.................................................35
6.2. Guaranties and Security of Subsidiaries..............................35
7. REPRESENTATIONS AND WARRANTIES..............................................35
7.1. Corporate Authority..................................................36
7.1.1. Incorporation; Good Standing.................................36
7.1.2. Authorization................................................36
7.1.3. Enforceability...............................................36
7.2. Governmental Approvals...............................................36
7.3. Title to Properties; Leases..........................................37
7.4. Financial Statements and Projections.................................37
7.4.1. Fiscal Year..................................................37
7.4.2. Financial Statements.........................................37
7.4.3. Projections..................................................37
7.4.4. Solvency.....................................................38
7.5. No Material Changes, etc.............................................38
7.6. Franchises, Patents, Copyrights, etc.................................38
7.7. Litigation...........................................................38
7.8. No Materially Adverse Contracts, etc.................................38
7.9. Compliance with Other Instruments, Laws, etc.........................39
7.10. Tax Status...........................................................39
7.11. No Event of Default..................................................39
7.12. Holding Company and Investment Company Acts..........................39
7.13. Absence of Financing Statements, etc.................................39
7.14. Perfection of Security Interest......................................39
7.15. Certain Transactions.................................................40
7.16. Employee Benefit Plans...............................................40
7.16.1. In General..................................................40
7.16.2. Terminability of Welfare Plans..............................40
7.16.3. Guaranteed Pension Plans....................................40
7.16.4. Multiemployer Plans.........................................41
7.17. Use of Proceeds......................................................41
7.17.1. General.....................................................41
7.17.2. Regulations U and X.........................................41
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7.17.3. Ineligible Securities.......................................41
7.18. Environmental Compliance.............................................42
7.19. Subsidiaries, etc....................................................43
7.20. Bank Accounts........................................................43
7.21. Disclosure...........................................................43
7.22. Status of Loans as Senior Debt.......................................44
7.23. Subordinated Debt Documents..........................................44
7.24. Designation of Senior Debt...........................................44
7.25. No Withholding.......................................................44
7.26. No Filings Required..................................................44
7.27. Chief Executive Office...............................................45
7.28. Delivery of Certain Documents........................................45
7.29. Insurance............................................................45
7.30. Year 2000 Problem....................................................45
8. AFFIRMATIVE COVENANTS OF THE BORROWER.......................................45
8.1. Punctual Payment.....................................................45
8.2. Maintenance of Office................................................46
8.3. Records and Accounts.................................................46
8.4. Financial Statements, Certificates and Information...................46
8.5. Notices..............................................................47
8.5.1. Defaults.....................................................47
8.5.2. Environmental Events.........................................48
8.5.3. Notification of Claim against Collateral.....................48
8.5.4. Notice of Litigation and Judgments...........................48
8.6. Corporate Existence; Maintenance of Properties.......................48
8.7. Insurance............................................................49
8.8. Taxes................................................................49
8.9. Inspection of Properties and Books, etc..............................49
8.9.1. General......................................................49
8.9.2. Appraisals...................................................49
8.9.3. Communications with Accountants..............................50
8.10. Compliance with Laws, Contracts, Licenses, and Permits...............50
8.11. Employee Benefit Plans...............................................50
8.12. Use of Proceeds......................................................50
8.13. Fair Labor Standards Act.............................................51
8.14. Guarantors...........................................................51
8.15. Subordinated Guarantees..............................................51
8.16. Status of Loans as Senior Debt.......................................51
8.17. Additional Subsidiaries..............................................52
8.18. Interest Rate Protection.............................................52
8.19. Further Assurances...................................................52
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER..................................52
9.1. Restrictions on Indebtedness.........................................52
9.2. Restrictions on Liens................................................53
9.3. Restrictions on Investments..........................................54
9.4. Distributions........................................................55
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9.5. Merger, Consolidation and Disposition of Assets......................55
9.5.1. Mergers and Acquisitions.....................................55
9.5.2. Disposition of Assets........................................57
9.6. Sale and Leaseback...................................................58
9.7. Compliance with Environmental Laws...................................58
9.8. Subordinated Debt....................................................58
9.9. Employee Benefit Plans...............................................58
9.10. Business Activities..................................................59
9.11. Fiscal Year..........................................................59
9.12. Transactions with Affiliates.........................................59
9.13. Modification of Documents and Charter................................59
9.14. Upstream Limitations.................................................60
9.15. Inconsistent Agreements..............................................60
9.16. Senior Debt..........................................................60
9.17. Limitations on Foreign Exchange Arrangements.........................60
10. FINANCIAL COVENANTS OF THE BORROWER.........................................60
10.1. Leverage Ratio.......................................................60
10.2. Interest Coverage Ratio..............................................61
10.3. Minimum EBITDA.......................................................61
10.4. Capital Expenditures.................................................61
11. CLOSING CONDITIONS..........................................................61
11.1. Loan Documents etc...................................................61
11.1.1. Loan Documents..............................................61
11.1.2. Subordinated Debt Documents.................................61
11.2. Certified Copies of Charter Documents................................61
11.3. Corporate, Action....................................................61
11.4. Incumbency Certificate...............................................62
11.5. Validity of Liens....................................................62
11.6. Perfection Certificates and UCC Search Results.......................62
11.7. Landlord Consents....................................................62
11.8. Certificates of Insurance............................................62
11.9. Solvency Certificate.................................................62
11.10. Opinion of Counsel...................................................62
11.11. Payment of Fees......................................................62
11.12. Payoff Letter........................................................63
11.13. Disbursement Instructions............................................63
11.14. Consents and Approvals...............................................63
11.15. Designation of Agent as Trustee......................................63
11.16. Receipt of Audited Financial Information.............................63
11.17. Relocation Cost Analysis.............................................63
12. CONDITIONS TO ALL BORROWINGS................................................63
12.1. Representations True; No Event of Default............................63
12.2. No Legal Impediment..................................................64
12.3. Governmental Regulation..............................................64
12.4. Proceedings and Documents............................................64
12.5. Exchange Limitations.................................................64
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12.6. Incurrence Test......................................................64
13. EVENTS OF DEFAULT; ACCELERATION; ETC........................................64
13.1. Events of Default and Acceleration...................................64
13.2. Termination of Commitments...........................................68
13.3. Remedies.............................................................68
13.4. Exchange Rate........................................................69
13.5. Distribution of Collateral Proceeds..................................69
14. SETOFF......................................................................70
15. THE AGENT...................................................................71
15.1. Authorization........................................................71
15.2. Employees and Agents.................................................72
15.3. No Liability.........................................................72
15.4. No Representations...................................................72
15.4.1. General.....................................................72
15.4.2. Closing Documentation, etc..................................73
15.5. Payments.............................................................73
15.5.1. Payments to Agent...........................................73
15.5.2. Distribution by Agent.......................................73
15.5.3. Delinquent Banks............................................73
15.6. Holders of Revolving Credit Notes....................................74
15.7. Indemnity............................................................74
15.8. Agent as Bank........................................................74
15.9. Resignation..........................................................74
15.10. Notification of Defaults and Events of Default.......................75
15.11. Duties in the Case of Enforcement....................................75
16. EXPENSES AND INDEMNIFICATION................................................75
16.1. Expenses.............................................................75
16.2. Indemnification......................................................76
16.3. Survival.............................................................77
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION...............................77
17.1. Sharing of Information with Section 20 Subsidiary....................77
17.2. Confidentiality......................................................77
17.3. Prior Notification...................................................77
17.4. Other................................................................78
18. SURVIVAL OF COVENANTS, ETC..................................................78
19. ASSIGNMENT AND PARTICIPATION; ACCESSION.....................................78
19.1. Conditions to Assignment and Accession...............................78
19.1.1. Assignment by Banks.........................................78
19.1.2. Accession...................................................79
19.2. Certain Representations and Warranties; Limitations; Covenants.......80
19.3. Register.............................................................81
19.4. New Revolving Credit Notes...........................................81
19.5. Participations.......................................................82
19.6. Disclosure...........................................................82
19.7. Assignee or Participant Affiliated with the Borrower.................82
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19.8. Miscellaneous Assignment Provisions..................................83
19.9. Assignment by Borrower...............................................83
20. NOTICES, ETC................................................................83
21. GOVERNING LAW...............................................................84
22. HEADINGS....................................................................84
23. COUNTERPARTS................................................................84
24. ENTIRE AGREEMENT, ETC.......................................................85
25. WAIVER OF JURY TRIAL........................................................85
26. CONSENTS, AMENDMENTS, WAIVERS, ETC..........................................85
27. SEVERABILITY................................................................86
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of June 15, 1998, by and among
ANACOMP, INC. (the "Borrower"), an Indiana corporation having its principal
place of business at 00000 Xxxxxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000,
BANKBOSTON, N.A., a national banking association and the other lending
institutions listed on Schedule 1 and BANKBOSTON, N.A. as agent for itself and
such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings set forth in
this Section 1 or elsewhere in the provisions of this Credit Agreement referred
to below:
Acceding Bank. See Section 19.1.2.
Adjustment Date. The first day of the month immediately following the month
in which a Compliance Certificate is to be delivered by the Borrower pursuant to
Section 8.4(c) hereof.
Affiliate. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent. BankBoston, N.A. acting as agent for the Banks.
Agent's Special Counsel. Xxxxxxx Xxxx LLP or such other counsel as may be
approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date through
the date immediately preceding the next Adjustment Date (each a "Rate Adjustment
Period"), the Applicable Margin shall be the applicable margin set forth below
with respect to the Leverage Ratio, as determined for the period ending on the
fiscal quarter ended immediately preceding the first day of the applicable Rate
Adjustment Period.
2
BASE LETTER OF
RATE EUROCURRENCY CREDIT COMMITMENT
LEVEL LEVERAGE RATIO LOANS RATE LOANS FEES FEE RATE
----- -------------- ----- ---------- ---------- -----------
I Greater than or equal to
3.50:1.00 0.75% 2.00% 2.00% 0.375%
II Less than 3.50:1.00 but greater
than or equal to 3.00:1.00 0.25% 1.50% 1.50% 0.375%
III Less than 3.00:1.00 but greater
than or equal to 2.50:1.00 0.00% 1.25% 1.25% 0.250%
IV Less than 2.50:1.00 0.00% 1.00% 1.00% 0.250%
Notwithstanding the foregoing, (a) for Revolving Credit Loans
outstanding, the Letter of Credit Fees and the commitment fees payable during
the period commencing on the Closing Date through December 15, 1998, the
Applicable Margin shall be at Level 2 set forth above and on December 15,
1998 shall, until the next Adjustment Date to occur after December 31, 1998,
be at the Level based on the September 30, 1998 Compliance Certificate, and
(b) if the Borrower fails to deliver any Compliance Certificate pursuant to
Section 8.4(c) hereof prior to the first day of the Adjustment Date next
commencing following the date such Compliance Certificate was required to be
delivered then, for the period commencing on such next Adjustment Date to
occur subsequent to such failure through the date immediately following the
date on which such Compliance Certificate is delivered, the Applicable Margin
shall be the highest Applicable Margin set forth above.
Applicable Pension Legislation. At any time, any pension or retirement
benefits legislation (be it federal, provincial, territorial or otherwise) then
applicable to the Borrower or any of its Subsidiaries.
Asset Sale. Any one or series of related transactions in which any
applicable Person conveys, sells, transfers or otherwise disposes of, directly
or indirectly, any of its properties, businesses or assets (including the sale
or issuance of capital stock of a Subsidiary), whether owned on the Closing Date
or thereafter acquired.
Assignment and Acceptance. See Section 19.1.
Balance Sheet Date. September 30, 1997.
Banks. BKB and the other lending institutions listed on Schedule 1 hereto
and any other Person who becomes an assignee of any rights and obligations of a
Bank pursuant to Section 19.
Base Rate. The higher of (a) the annual rate of interest announced from time
to time by BKB at its head office in Boston, Massachusetts, as its "base rate"
and (b) one-half of one percent (1/2%) above the Federal Funds Effective Rate.
For the purposes of this definition, "Federal Funds Effective Rate" shall mean
for any day,
3
the rate per annum equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three funds brokers of recognized standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a national
banking association, in its individual capacity.
Borrower. As defined in the preamble hereto.
Business Day. Any day on which banking institutions in Boston, Massachusetts
and the state of California, are open for the transaction of banking business
and, in addition, (a) if Eurocurrency Rate Loans denominated in Dollars are
involved, a day which is also a day in which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith; and (b) if Eurocurrency Rate Loans denominated
in an Optional Currency are involved, a day on which dealings and exchange in
Dollars and the relevant Optional Currency can be carried on in the relevant
Eurocurrency Interbank Market and Dollar settlements of such dealings may be
effected in Boston, Massachusetts and London, and also a day on which dealings
and exchange in Dollars and in the relevant Optional Currency can be carried on
in the principal financial center of the country in which such currency is legal
tender and in London, England.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by the Borrower
or any of its Subsidiaries in connection with (a) the purchase or lease by the
Borrower or any of its Subsidiaries of Capital Assets that would be required to
be capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles or (b) the lease of any assets by the
Borrower or any of its Subsidiaries as lessee under any Synthetic Lease to the
extent that such assets would have been Capital Assets had the Synthetic Lease
been treated for accounting purposes as a Capitalized Lease.
4
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 7.18(a).
Closing Date. The first date on which the conditions set forth in Section 11
have been satisfied or waived in writing by the Majority Banks and the Agent and
any Revolving Credit Loans are to be made or any Letter of Credit is to be
issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests of the Borrower and
its Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be modified pursuant to
Section 19.1.2 hereof, and as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Fee Rate. The applicable rate per annum set forth in the chart
contained in the definition of Applicable Margin under the heading "Commitment
Fee Rate".
Commitment Percentage. With respect to each Bank, the percentage set forth
on Schedule 1 hereto (as such Schedule 1 may be amended from time to time
pursuant to an Assignment and Acceptance or Instrument of Accession pursuant to
which any Bank acceded to its Commitment as a result of such assignment) as such
Bank's percentage of the aggregate Commitments of all of the Banks.
Compliance Certificate. See Section 8.4(c).
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Net Income (or Deficit). With respect to the Borrower and its
Subsidiaries for any period, the consolidated net income (or deficit) of the
Borrower and its Subsidiaries, determined in accordance with generally accepted
accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.
5
Consolidated Total Interest Expense. For any period, the aggregate amount of
interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of any Capitalized Lease, or any
Synthetic Lease, the imputed interest on the Borrower's SKC trade Indebteness
(calculated consistently with past practices), interest associated with the
Borrower's deferred compensation plans, and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with Section 2.7.
Credit Agreement. This Revolving Credit Agreement, including the Schedules
and Exhibits hereto.
DAS Business. That portion of the business acquired in the FIMCO Acquisition
which conducts document acquisition services such as outsourced health care and
insurance claims entry and data capture services.
Default. See Section 12.1.
Delinquent Bank. See Section 15.5.3.
Distribution. The declaration or payment of any dividend on or in respect of
any shares of any class of capital stock of the Borrower, other than dividends
payable solely in shares of capital stock of the Borrower of the same class; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
Dollar Equivalent. On any particular day, with respect to any amount
denominated in Dollars, such amount of Dollars, and with respect to any amount
denominated in a currency other than Dollars, the amount (as conclusively
ascertained by the Agent absent manifest error) of Dollars which could be
purchased by the Agent (in accordance with its normal banking practices) in the
London foreign currency deposit market with such amount of such currency at the
spot rate of exchange prevailing at or about 10:00 a.m. (London time) on such
date.
Dollars or $. Dollars in lawful currency of the United States of America.
6
Domestic Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
Domestic Subsidiary. Any Subsidiary which is not a Foreign Subsidiary.
DPDS Business. That portion of the business acquired in the FIMCO
Acquisition which conducts document print and distribution services such as
laser print and mail and demand publishing services.
Drawdown Date. The date on which any Revolving Credit Loan is made or is to
be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7.
EBITDA. With respect to the Borrower and its Subsidiaries for any fiscal
period, an amount equal to Consolidated Net Income for such period, plus, to the
extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation and amortization for such period, (b) other
noncash charges for such period, (c) income tax expense for such period, and (d)
Consolidated Total Interest Expense paid or accrued during such period, and
minus, to the extent added in computing Consolidated Net Income and without
duplication, all noncash gains (including income tax benefits) for such period,
all as determined in accordance with generally accepted accounting principles.
Eligible Assignee. Any of (a) a commercial bank or finance company organized
under the laws of the United States, or any State thereof or the District of
Columbia, and having total assets in excess of $1,000,000,000; (b) a savings and
loan association or savings bank organized under the laws of the United States,
or any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any country
which is a member of the OECD; and (e) if, but only if, any Event of Default has
occurred and is continuing, any other bank, insurance company, commercial
finance company or other financial institution or other Person approved by the
Agent, such approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA or other Applicable Pension Legislation, maintained or
contributed to by the Borrower or any ERISA Affiliate, other than a Guaranteed
Pension Plan or a Multiemployer Plan.
Environmental Laws. See Section 7.18(a).
7
EPA. See Section 6.18(b).
Equity Issuance. The sale or issuance by the Borrower or any of its
Subsidiaries of any of its capital stock or equity interests or any warrants,
rights or options to acquire its capital stock or equity interests.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code or under any Applicable Pension
Legislation.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
"Euro" or "Euro" Currency. The use of the term "Euro" in this Credit
Agreement relates to the establishment of the "Euro" as a single currency
pursuant to the Treaty Establishing the European Economic Community, as amended
by the Treaty on the European Union (the Maastrict Treaty), and the conversion
(pursuant to the requirements of such Treaty) of any Obligations under the Loan
Documents from an Optional Currency of a country that is a member of the
European Union into Euro. As of the date that any such Optional Currency is no
longer the lawful currency of its respective country, all payment Obligations
under the Loan Documents that would otherwise be in such Optional Currency shall
thereafter be satisfied in the "Euro" Currency. For the avoidance of doubt, the
parties hereto affirm and agree that neither the fixing of a conversion rate of
any such Optional Currency against the Euro, nor the mandatory conversion of
such Obligations into Euro, in each case pursuant to such Treaty, shall require
the early termination of this Credit Agreement or any Interest Period with
respect to any Revolving Credit Loan or the prepayment of any amount due under
the Loan Documents or create any liability of one party to another party for any
direct or consequential loss otherwise arising from any of such events to the
extent required by such Treaty.
Eurocurrency Interbank Market. Any lawful recognized market in which
deposits of Dollars and the relevant Optional Currencies are offered by
international banking units of United States banking institutions and by foreign
banking institutions to each other and in which foreign currency and exchange
operations or eurocurrency funding operations are customarily conducted.
Eurocurrency Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, that shall be making or maintaining Eurocurrency Rate Loans.
Eurocurrency Offered Rate. With respect to the Interest Period for any
Eurocurrency Rate Loan denominated in an Optional Currency, the rate per annum
(rounded upwards to the nearest 1/16 of one percent) equal to the rate at which
the Reference Bank is offered deposits in Dollars or the relevant Optional
Currency, as
8
the case may be, two (2) Business Days prior to the beginning of such Interest
Period in the Eurocurrency Interbank Market where the foreign currency and
exchange operations or eurocurrency funding operations of the Agent are
customarily conducted at or about 10:00 a.m. (London time) for delivery on the
first day of such Interest Period and for the number of days comprised therein
and in an amount equal (as nearly as may be) to the Reference Bank's Commitment
Percentage of such Eurocurrency Rate Loan to which such Interest Period applies.
Eurocurrency Rate. With respect to amounts denominated in Dollars, the
Eurodollar Rate, and with respect to amounts denominated in any Optional
Currency, the International Eurocurrency Rate.
Eurocurrency Rate Loans. Revolving Credit Loans bearing interest calculated
by reference to a Eurocurrency Rate.
Eurocurrency Reserve Rate. For any day with respect to a Eurocurrency Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Rate. For any Interest Period with respect to a Eurocurrency Rate
Loan denominated in Dollars, the rate of interest equal to (a) the rate per
annum (rounded upwards to the nearest 1/16 of one percent) at which the
Reference Bank's Eurocurrency Lending Office is offered Dollar deposits two (2)
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations of such Eurocurrency Lending Office are customarily conducted, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurocurrency
Rate Loan denominated in Dollars of the Reference Bank to which such Interest
Period applies, divided by (b) a number equal to 1.00 minus the Eurocurrency
Reserve Rate, if applicable.
Event of Default. See Section 12.1.
Exchange Offer. The offer by the Borrower to exchange the Subsequent
Subordinated Notes issued pursuant to the Subsequent Subordinated Indenture for
a new issue of Subsequent Subordinated Notes (with terms substantially identical
to those of the Subsequent Subordinated Notes originally issued pursuant to the
Subsequent Subordinated Indenture) pursuant to a registration statement (the
"Registration Statement") to be filed with the Securities and Exchange
Commission within 60 days after the date of original issuance of the Subsequent
Subordinated Notes.
9
Fee Letter. The fee letter, dated on or prior to the Closing Date, between
the Borrower and the Agent, as the same may be amended, modified or supplemented
from time to time.
FIMCO Acquisition. As defined in Section.9.5.1 hereto.
Foreign Subsidiary. Any Subsidiary which conducts substantially all of its
business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
generally accepted accounting principles. (a) When used in ss.10, whether
directly or indirectly through reference to a capitalized term used therein,
means (i) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal year ended on the Balance Sheet Date, and (ii) to the
extent consistent with such principles, the accounting practice of the Borrower
reflected in its financial statements for the year ended on the Balance Sheet
Date, and (b) when used in general, other than as provided above, means
principles that are (i) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (ii) consistently applied with past financial statements of
the Borrower adopting the same principles, provided that in each case referred
to in this definition of "generally accepted accounting principles" a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section.3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantor. Each Person which is required to be or become guarantors from
time to time pursuant to Section.8.14 hereof.
Guaranty. The Guaranty, dated a date subsequent to the Closing Date, made by
each Guarantor in favor of the Banks and the Agent pursuant to which each
Guarantor guaranties to the Banks and the Agent the payment and performance of
the Obligations and substantially in form of Exhibit J hereto.
Hazardous Substances. See Section.7.18(b).
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
10
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses,
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person,
(d) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith),
(e) every obligation of such Person under any Capitalized Lease,
(f) every obligation of such Person under any lease (a "Synthetic
Lease") treated as an operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax purposes or
treated similarly by the relevant taxing authority of a non-U.S.
jurisdiction,
(g) all sales by such Person of (i) accounts or general intangibles for
money due or to become due, (ii) chattel paper, instruments or documents
creating or evidencing a right to payment of money or (iii) other
receivables (collectively "receivables"), whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement, and
together with any obligation of such Person to pay any discount, interest,
fees, indemnities, penalties, recourse, expenses or other amounts in
connection therewith,
(h) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock of any class issued by such Person, any warrants,
options or other rights to acquire any such shares, or any rights measured
by the value of such shares, warrants, options or other rights,
(i) every obligation of such Person under any forward contract, futures
contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices,
11
(j) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law,
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(a) through (j) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (i) to purchase or pay (or
advance or supply funds for the purchase of) any security for the payment of
such primary obligation, (ii) to purchase property, securities or services
for the purpose of assuring the payment of such primary obligation, or (iii)
to maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (w) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (x) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (y) any Synthetic Lease shall be the
stipulated loss value, termination value or other equivalent amount and (z) any
equity related purchase obligation shall be the maximum fixed redemption or
purchase price thereof inclusive of any accrued and unpaid dividends to be
comprised in such redemption or purchase price.
Ineligible Securities. Securities which may not be underwritten or dealt in
by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
Initial Indenture Trustee. IBJ Xxxxxxxx Bank & Trust Company, as trustee
under the Subordinated Indenture.
Initial Subordinated Notes. The 10 7/8% Senior Subordinated Notes due 2004,
Series B issued by the Borrower in the aggregate principal amount of
$200,000,000 pursuant to the Subordinated Indenture.
12
Insolvency Event. Any of the following events or circumstances: (a) the
Borrower or any of its Subsidiaries organized in the United Kingdom shall be
deemed unable to pay its debts within the meaning of section 123(1) (a), (b), or
(b) of the Xxxxxxxxxx Xxx 0000 (Xxxxxx Xxxxxxx) or shall otherwise become
insolvent or stop or suspend making payments (whether of principal or interest)
with respect to all or any class of its Indebtedness or announce an intention to
do so, (b) a meeting shall be convened by the Borrower or any of its
Subsidiaries for the purpose of passing any resolution to purchase, reduce or
redeem any of its capital stock or to comply with section 142 of the Companies
Xxx 0000 (England), (c) any petition shall be presented or other step taken for
the purpose of the appointment of an administrator or the winding up of the
Borrower or any of its Subsidiaries (not being, in the case of a winding up, a
petition which such Person can demonstrate to the reasonable satisfaction of the
Agent, by providing an opinion of leading counsel to that effect, is frivolous,
vexatious or an abuse of the process of the court or relates to a claim to which
such Person has a good defense and which is being vigorously contested by such
Person) or an order shall be made or resolution passed for the winding up of the
Borrower or any of its Subsidiaries or a notice shall be issued by convening a
meeting for the purpose of passing any such resolution (except for the purpose
of a solvent amalgamation or reconstitution which shall have been approved by
the Agent), or (d) any steps shall be taken, or negotiations commenced by the
Borrower or any of its Subsidiaries or by any of their respective creditors with
a view to proposing any kind of composition, compromise or arrangement involving
such Person and any of its creditors or for the presentation of a petition for
the appointment of an administrator.
Instrument of Accession. See Section 19.1.2.
Instrument of Adherence. See Section 9.5.1.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of the
calendar quarter with respect to interest accrued during such calendar quarter,
including, without limitation, the calendar quarter which includes the Drawdown
Date of such Base Rate Loan; and (b) as to any Eurocurrency Rate Loan in respect
of which the Interest Period is (i) three (3) months or less, the last day of
such Interest Period and (ii) more than three (3) months, the date that is three
(3) months from the first day of such Interest Period and, in addition, the last
day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a) initially,
the period commencing on the Drawdown Date of such Revolving Credit Loan and
ending on the last day of one of the periods set forth below, as selected by the
Borrower in a Loan Request or as otherwise required by the terms of this Credit
Agreement (i) for any Base Rate Loan, the last day of the calendar quarter; and
(ii) for any Eurocurrency Rate Loan, 1, 2, 3 or 6 months; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Revolving Credit Loan and ending on the last day of one of
the periods set forth
13
above, as selected by the Borrower in a Conversion Request; provided that all of
the foregoing provisions relating to Interest Periods are subject to the
following:
(a) if any Interest Period with respect to a Eurocurrency Rate Loan
would otherwise end on a day that is not a Business Day, that Interest
Period shall be extended to the next succeeding Business Day unless the
result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in ss.2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurocurrency Rate Loan to a Base Rate Loan and the continuance of all Base
Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
(d) any Interest Period relating to any Eurocurrency Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of a calendar
month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit Loan
Maturity Date.
International Eurocurrency Rate. With respect to all Eurocurrency Rate Loans
denominated in an Optional Currency for any Interest Period, the annual rate of
interest, rounded to the nearest 1/16th of one percent (1%), determined by the
Agent for such Interest Period in accordance with the following formula:
Eurocurrency Offered Rate
International Eurocurrency Rate = 1 - Eurocurrency Reserve Rate
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is
14
paid; (c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Letter of Credit. See Section 4.1.1.
Letter of Credit Application. See Section 4.1.2.
Letter of Credit Fee. See Section 4.6.
Letter of Credit Participation. See Section 4.1.4.
Leverage Ratio. As at any date of determination, the ratio of (a) Total
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on such
date to (b) EBITDA of the Borrower and its Subsidiaries for the Reference Period
ended on such date (or, if such date is not a fiscal quarter end date, the
period of four consecutive fiscal quarters most recently ended); provided,
however, when calculating the Leverage Ratio for any period in which a Permitted
Acquisition has occurred, the calculation of the Leverage Ratio shall be made on
a Pro Forma Basis.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Fee Letter and the
Security Documents.
Loan Request. See Section 2.6.
Majority Banks. As of any date, the Banks holding at least fifty one percent
(51%) of the outstanding principal amount of the Revolving Credit Notes on such
date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least fifty one percent (51%) of the Total
Commitment.
Maximum Drawing Amount. The maximum aggregate amount that the beneficiaries
may at any time draw under outstanding Letters of Credit, as such aggregate
amount may be reduced from time to time pursuant to the terms of the Letters of
Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Net Cash Proceeds. With respect to any Equity Issuance, the excess of the
gross cash proceeds received by such Person from such Equity Issuance after
deduction of customary transaction expenses (including, without limitation,
15
underwriting discounts and commissions) actually incurred in connection with the
Equity Issuance and which the Borrower, acting in good faith, deems to be
reasonable.
Net Cash Sale Proceeds. The net cash proceeds received by the Borrower and
its Subsidiaries in respect of any Asset Sale, less all out-of-pocket fees,
commissions and other expenses which the Borrower, acting in good faith, deems
to be reasonable and are incurred in connection with such Asset Sale, including
the amount (estimated in good faith by such Person) of income, franchise, sales
and other applicable taxes required to be paid by such Person in connection with
such Asset Sale.
Obligations. All indebtedness, obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Revolving Credit Loans made or Reimbursement Obligations incurred or any of the
Revolving Credit Notes, Letter of Credit Application, Letter of Credit, or
arising or incurred in connection with any interest rate protection arrangements
contemplated by Section 8.18 or any documents, agreements or instruments
executed in connection therewith, or other instruments at any time evidencing
any thereof.
OC Notice. See Section 2.9.
Open Market Purchases. The purchase by the Borrower of all or any portion of
the Subordinated Notes from the holders thereof so long as (a) the total,
cumulative amount of the consideration paid for all such purchases from and
after the Closing Date does not exceed, in the aggregate, (i) $25,000,000 to the
extent the Leverage Ratio calculated on a pro forma basis immediately prior to
and after giving effect to such purchase is equal to or greater than 2.00:1.00
and (ii) $50,000,000 to the extent the Leverage Ratio calculated on a pro forma
basis immediately prior to and after giving effect to such purchase is less than
2.00:1.00; and the Subordinated Notes so purchased in each case are promptly
cancelled by the Borrower and (b) the total amount of the consideration paid for
any Subordinated Note does not exceed the fair market value of such Subordinated
Note (determined by reference to the public market at the date of such purchase.
Optional Currency. Any currency other than Dollars selected by the Borrower
and including the "Euro" which is (a) freely convertible into Dollars; and (b)
traded on any recognized Eurocurrency Interbank Market selected by the Agent in
good faith.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
16
Overnight Rate. For any day, (a) as to Revolving Credit Loans denominated in
Dollars, the weighted average interest rate paid by the Agent for federal funds
acquired by the Agent, and (b) as to Revolving Credit Loans denominated in an
Optional Currency, the rate of interest per annum at which overnight deposits in
the applicable Optional Currency, in an amount approximately equal to the amount
with respect to which such rate is being determined, would be offered for such
day by the Agent to major banks in the London interbank market.
Patent Assignment. The Patent Assignment, dated or to be dated on or prior
to the Closing Date, made by the Borrower in favor of the Agent and
substantially in form of Exhibit G hereto.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Perfection Certificate. The Perfection Certificate as defined in the
Security Agreement.
Permitted Acquisition. As defined in Section 9.5.1.
Permitted Liens. Liens, security interests and other encumbrances permitted
by Section 9.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Pro Forma Basis. With respect to any Reference Period during which a
Permitted Acquisition has occurred, the Total Funded Indebtedness (or, in the
case of Consolidated Total Interest Expense, all Indebtedness) and EBITDA for
such Reference Period shall be calculated after giving effect on a pro forma
basis to such Permitted Acquisition and assuming that such Permitted Acquisition
had been consummated at the beginning of such Reference Period in the manner
described in (i), (ii) and (iii) below:
(i) all Indebtedness (whether under this Credit Agreement or otherwise) and
any other balance sheet adjustments incurred or made in connection with
the Permitted Acquisition shall be deemed to have been incurred or made
on the first day of the Reference Period, and all Indebtedness of the
Person acquired or to be acquired in such Permitted Acquisition which
was or will have been repaid in connection with the consummation of the
Permitted Acquisition will be deemed to have been repaid concurrently
with the incurrence of the Indebtedness incurred in connection with the
Permitted Acquisition;
17
(ii) all Indebtedness assumed to have been incurred pursuant to the
preceding clause (i) shall be deemed to have borne interest at the sum
of (a) the arithmetic mean of (x) the Eurocurrency Rate for
Eurocurrency Rate Loans having an Interest Period of one month in
effect on the first day of the Reference Period and (y) the
Eurocurrency Rate for Eurocurrency Rate Loans having an Interest Period
of one month in effect on the last day of the Reference Period plus (b)
the Applicable Margin for Revolving Credit Loans then in effect (after
giving effect to the Permitted Acquisition on a Pro Forma Basis); and
(iii) other reasonable cost savings, expenses and other income statement or
operating statement adjustments which are attributable to the change in
ownership and/or management resulting from such Permitted Acquisition
as may be approved by the Agent in writing shall be deemed to have been
realized on the first day of the Reference Period.
Rate Adjustment Period. As defined in the definition of Applicable Margin.
RCRA. See Section 7.18(a).
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the continuation of
such grid, or any other similar record, including computer records, maintained
by any Bank with respect to any Revolving Credit Loan referred to in such
Revolving Credit Note.
Reference Bank. BKB.
Reference Period. The period of four (4) consecutive fiscal quarters of the
Borrower ending on the relevant date (or, if such date is not a fiscal quarter
end date, the period of four (4) consecutive fiscal quarters most recently
ended).
Register. See Section 19.3.
Registration Rights Agreement. That certain Exchange and Registration Rights
Agreement dated as of March 24, 1997 between the Borrower and NatWest Capital
Markets Limited, as initial purchaser, a copy of which has been delivered to the
Agent on or prior to the Closing Date.
Reimbursement Obligation. The Borrower's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in Section 4.2.
18
Restricted Payment. In relation to the Borrower and its Subsidiaries, any
(a) Distribution; (b) payment by the Borrower or any of its Subsidiaries to any
Affiliate other than payments to such Affiliates for goods and services in the
ordinary course of business on terms equivalent to those obtainable in arms
length transactions
Revolving Credit Loan Maturity Date. June 15, 2003.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to Section 2.
Revolving Credit Notes. See Section 2.4.
XXXX. See Section 7.18(a).
Same Day Funds. With respect to disbursements and payments in (a) Dollars,
immediately available funds, and (b) an Optional Currency, same day or other
funds as may be determined by the Agent to be customary in the place of
disbursement or payment for the settlement of international banking transactions
in the relevant Optional Currency.
Section 20 Subsidiary. A Subsidiary of the bank holding company controlling
any Bank, which Subsidiary has been granted authority by the Federal Reserve
Board to underwrite and deal in certain Ineligible Securities.
Security Agreement. The Security Agreement, dated or to be dated on or prior
to the Closing Date, between the Borrower and the Agent and substantially in the
form of Exhibit F hereto.
Security Documents. The Guaranty, the Security Agreement, the Patent
Assignment, the Trademark Assignment, the Stock Pledge Agreement and all other
instruments and documents, including without limitation Uniform Commercial Code
financing statements, required to be executed or delivered pursuant to any
Security Document.
Stock Pledge Agreement. Collectively, the various foreign share pledge
agreements and the Stock Pledge Agreement, dated or to be dated on or prior to
the Closing Date, between the Borrower and the Agent and in form and substance
satisfactory to the Banks and the Agent.
Subordinated Debt. Unsecured Indebtedness of the Borrower or any of its
Subsidiaries that is expressly subordinated and made junior to the payment and
performance in full of the Obligations, and evidenced as such by the
Subordinated Debt Documents.
Subordinated Debt Documents. The Subordinated Purchase Agreement, the
Subordinated Indenture Amendment, the Subordinated Indenture, the Registration
Rights Agreement, the Initial Subordinated Notes, the Subsequent Subordinated
19
Purchase Agreement, the Subsequent Subordinated Indenture, the Subsequent
Registration Rights Agreement and the Subsequent Subordinated Notes.
Subordinated Indenture. The Indenture dated as of March 24, 1997 between the
Borrower and the Initial Indenture Trustee, and in the form delivered to the
Agent on or prior to the Closing Date, and as the same may be amended by the
Subordinated Indenture Amendment.
Subordinated Indenture Amendment. That certain First Supplemental Indenture
dated as of a date after the Closing Date among the Borrower and the Initial
Indenture Trustee, with such amendment being in form and substance satisfactory
to the Agent and the Majority Banks.
Subordinated Notes. Collectively, (a) the Initial Subordinated Notes and (b)
the Subsequent Subordinated Notes.
Subordinated Purchase Agreement. The Purchase Agreement, dated as of March
24, 1997, between the Company and NatWest Capital Markets Limited, as initial
purchaser, relating to the issuance and sale by the Borrower of the Subordinated
Notes.
Subsequent Indenture Trustee. IBJ Xxxxxxxx Bank & Trust Company, as trustee
under the Subsequent Subordinated Indenture.
Subsequent Subordinated Indenture. The Indenture to be entered into after
the Closing Date between the Borrower and the Subsequent Indenture Trustee and
any such documents, instruments, or agreements issued pursuant to the Exchange
Offer, and each to be in form and substance acceptable to the Agent and the
Majority Banks.
Subsequent Subordinated Purchase Agreement. The Purchase Agreement to be
entered into after the Closing Date between the Borrower and NatWest Capital
Markets Limited, as initial purchaser, relating to the issuance and sale by the
Borrower of the Subsequent Subordinated Notes.
Subsequent Registration Rights Agreement. That certain Exchange and
Registration Rights Agreement pertaining to the Subsequent Subordinated Notes to
be entered into after the Closing Date by and between the Borrower and NatWest
Capital Markets Limited as initial purchaser, in substantially the form
delivered to the Agent on or prior to the Closing Date.
Subsequent Subordinated Notes. Collectively, the 10 7/8% Series C Senior
Subordinated Notes due 2004 and the 10 7/8% Series D Senior Subordinated Notes
due 2004 issued by the Borrower pursuant to the Subsequent Subordinated
Indenture in the aggregate principal amount necessary to produce gross proceeds
of not more than $140,000,000 which are issued for the purpose of using the
proceeds of such issuance to finance all or a portion of the FIMCO Acquisition,
the fees and
20
expenses incurred in connection therewith and general corporate powers of the
Borrower.
Subsidiary. Any corporation, association, trust, or other business entity of
which the designated parent shall at any time own directly or indirectly through
a Subsidiary or Subsidiaries at least a majority (by number of votes) of the
outstanding Voting Stock.
Synthetic Lease. As such term is defined in subparagraph (f) of the
definition of "Indebtedness".
Total Commitment. The sum of the Commitments of the Banks (as the same may
be modified pursuant to Section 19.1.2 hereof), as in effect from time to time.
Total Funded Indebtedness. All Indebtedness of the Borrower and its
Subsidiaries for borrowed money (including, without limitation, all guarantees
by such Person of Indebtedness of others for borrowed money), purchase money
Indebtedness and with respect to Capitalized Leases and Synthetic Leases,
determined on a consolidated basis in accordance with generally accepted
accounting principles.
Trademark Assignment. The Trademark Assignment, dated or to be dated on or
prior to the Closing Date, made by the Borrower in favor of the Agent and
substantially in the of Exhibit H hereto.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurocurrency Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which the
Borrower does not reimburse the Agent and the Banks on the date specified in,
and in accordance with, Section 4.2.
Voting Stock. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. Rules of Interpretation.
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(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time
in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts, have the meanings
assigned to them therein, with the term "instrument" being that defined
under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of periods
of time from a specified date to a later specified date, the word "from"
means "from and including," the words "to" and "until" each mean "to but
excluding," and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are, however,
cumulative and are to be performed in accordance with the terms thereof.
(l) This Credit Agreement and the other Loan Documents are the result
of negotiation among, and have been reviewed by counsel to, among others,
the Agent and the Borrower and are the product of discussions and
negotiations among all parties. Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed against the Agent or
any of the Banks merely on account of the Agent's or
22
any Bank's involvement in the preparation of such documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
from the Closing Date up to but not including the Revolving Credit Loan
Maturity Date upon notice by the Borrower to the Agent given in accordance
with Section 2.6, such sums in Dollars and/or at the Borrower's option from
time to time, subject to Section 2.9 hereof, in an Optional Currency, as are
requested by the Borrower up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment minus such Bank's Commitment Percentage of the sum of the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations, provided that the
sum of the outstanding amount of the Revolving Credit Loans (after giving
effect to all amounts requested) plus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the Total
Commitment (except as expressly permitted by Section 2.9.4 hereof). The
Revolving Credit Loans shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Revolving Credit Loan hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in Section 11 and Section 12, in the case of the initial
Revolving Credit Loans to be made on the Closing Date, and Section 12, in the
case of all other Revolving Credit Loans, have been satisfied or waived in
writing by the Majority Banks and the Agent on the date of such request. Each
Base Rate Loan shall be denominated in Dollars. Each Eurocurrency Rate Loan
shall be denominated in Dollars or, subject to Section 2.9 hereof, in an
Optional Currency.
2.2. Commitment Fee. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of the Commitment Fee Rate per annum on
the average daily amount during each calendar quarter or portion thereof from
the Closing Date to the Revolving Credit Loan Maturity Date by which the Total
Commitment minus the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit Maturity
Date or any earlier date on which the Commitments shall terminate.
2.3. Reduction of Total Commitment. The Borrower shall have the right at any
time and from time to time upon five (5) Business Days prior written notice to
the Agent to reduce by $5,000,000 or an integral multiple of $1,000,000 in
excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments
23
of the Banks shall be reduced pro rata in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this Section 2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit A hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Record reflecting the making of such
Revolving Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on such Bank's Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5. Interest on Revolving Credit Loans. Except as otherwise provided in
Section 5.11,
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the rate per annum equal to the Base Rate
plus the Applicable Margin with respect to Base Rate Loans as in effect from
time to time.
(b) Each Eurocurrency Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurocurrency Rate determined for such Interest Period plus the Applicable
Margin with respect to Eurocurrency Rate Loans as in effect from time to
time.
(c) The Borrower promises to pay interest on each Revolving Credit Loan
in arrears on each Interest Payment Date with respect thereto.
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2.6. Requests for Revolving Credit Loans. The Borrower shall give to the
Agent written notice in the form of Exhibit B hereto (or telephonic notice
confirmed in a writing in the form of Exhibit B hereto) of each Revolving
Credit Loan requested hereunder (a "Loan Request") no less than (a) one (1)
Business Day prior to the proposed Drawdown Date of any Base Rate Loan and
(b) three (3) Business Days prior to the proposed Drawdown Date of any
Eurocurrency Rate Loan, provided that any such notice requesting a Revolving
Credit Loan denominated in an Optional Currency must comply with the
requirements of this Section 2.6 and the requirements of an OC Notice
pursuant to Section 2.9(a). Each such notice shall specify (i) the principal
amount of the Revolving Credit Loan requested, stated either in Dollars or,
subject to Section 2.9.1 hereof, in an Optional Currency (ii) the proposed
Drawdown Date of such Revolving Credit Loan, (iii) the Interest Period for
such Revolving Credit Loan and (iv) the Type of such Revolving Credit Loan.
To the extent the Agent receives such notice by 11:00 a.m. (Boston time) on
any day, it shall provide the Banks with notice on such date, or, if the
Agent receives notice after 11:00 a.m. (Boston time), it shall provide the
Banks with notice on the next Business Day. Promptly upon receipt of any such
notice, the Agent shall notify each of the Banks thereof. Each Loan Request
shall be irrevocable and binding on the Borrower and shall obligate the
Borrower to accept the Revolving Credit Loan requested from the Banks on the
proposed Drawdown Date. Each Loan Request shall be in a minimum aggregate
amount of $1,000,000 or an integral multiple of $500,000 in excess thereof.
2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan denominated in Dollars to a Revolving Credit Loan of another
Type denominated in Dollars, provided that (a) with respect to any such
conversion of a Revolving Credit Loan to a Base Rate Loan, the Borrower
shall give the Agent at least one (1) Business Day prior written notice of
such election; (b) with respect to any such conversion of a Base Rate Loan
to a Eurocurrency Rate Loan, the Borrower shall give the Agent at least
three (3) Business Days prior written notice of such election; (c) with
respect to any such conversion of a Eurocurrency Rate Loan into a Revolving
Credit Loan of another Type, such conversion shall only be made on the last
day of the Interest Period with respect thereto and (d) no Revolving Credit
Loan may be converted into a Eurocurrency Rate Loan when any Default or
Event of Default has occurred and is continuing. To the extent the Agent
receives such notice by 11:00 a.m. (Boston time) on any day, it shall
provide the Banks with notice on such date, or, if the Agent receives notice
after 11:00 a.m. (Boston time), it shall provide the Banks with notice on
the next Business Day. On the date on which such conversion is being made
each Bank shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending Office or
its Eurocurrency Lending Office, as the case may be. All or any part
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of outstanding Revolving Credit Loans denominated in Dollars of any Type may
be converted into a Revolving Credit Loan of another Type as provided
herein, provided that any partial conversion shall be in an aggregate
principal amount of $1,000,000 or an integral multiple of $500,000 in excess
thereof. Each Conversion Request relating to the conversion of a Revolving
Credit Loan to a Eurocurrency Rate Loan shall be irrevocable by the
Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
Section 2.7.1; provided that (a) as to any Eurocurrency Rate Loan
denominated in Dollars, no such Eurocurrency Rate Loan may be continued as
such when any Default or Event of Default has occurred and is continuing,
but shall be automatically converted to a Base Rate Loan on the last day of
the first Interest Period relating thereto ending during the continuance of
any Default or Event of Default of which officers of the Agent active upon
the Borrower's account have actual knowledge; and (b) as to any Eurocurrency
Rate Loan denominated in an Optional Currency, no such Eurocurrency Rate
Loan may be continued as such when (i) a Default of Event of Default has
occurred or is continuing or (ii) the provisions of Section 2.9 hereof have
not or cannot be met at the time of such continuation, but shall be repaid
by the Borrower on the last day of the Interest Period relating thereto. In
the event that the Borrower fails to provide any such notice with respect to
the continuation of any Eurocurrency Rate Loan as such, then (a) such
Eurocurrency Rate Loan denominated in Dollars shall be automatically
converted to a Base Rate Loan on the last day of the first Interest Period
relating thereto; and (b) as to any Eurocurrency Rate Loan denominated in an
Optional Currency, shall be repaid on the last day of the Interest Period
relating thereto. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this Section 2.7 is scheduled to occur.
2.7.3. Eurocurrency Rate Loans. Any conversion to or from Eurocurrency
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of all
Eurocurrency Rate Loans having the same Interest Period shall not be less
than $1,000,000 or a whole multiple of $500,000 (or, in the case of a
Eurocurrency Rate Loan denominated in an Optional currency, that whole
number which is nearest to the Dollar Equivalent of $1,000,000 or $500,000,
as the case may be, rounded to the nearest one thousandth) in excess
thereof.
2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures. Not later than 11:00 a.m. (Boston time) on
the proposed Drawdown Date of any Revolving Credit Loans, each of the
26
Banks will make available to the Agent to credit to the Borrower's account
in Same Day Funds, the amount of such Bank's Commitment Percentage of the
amount of the requested Revolving Credit Loan and (a) in the case of a
Revolving Credit Loan denominated in Dollars, at the Agent's Head Office,
and (b) in the case of a Revolving Credit Loan denominated in an Optional
Currency, at the place specified in the notice delivered by the Borrower
pursuant to Section 2.9 hereof in Same Day Funds in the country in which
such Optional Currency is legal tender. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by Sections 11 and 12 and
the satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate
amount of such Revolving Credit Loans made available to the Agent by the
Banks. The failure or refusal of any Bank to make available to the Agent at
the aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment Percentage
of any requested Revolving Credit Loans.
2.8.2. Advances by Agent. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (a) the average computed for the
period referred to in clause (c) below, of the Overnight Rate for each day
included in such period, times (b) the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans, times (c) a fraction, the
numerator of which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans shall become immediately available
to the Agent, and the denominator of which is 365. A statement of the Agent
submitted to such Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the
Agent by such Bank. If the amount of such Bank's Commitment Percentage of
such Revolving Credit Loans is not made available to the Agent by such Bank
within three (3) Business Days following such Drawdown Date, the Agent shall
be entitled to recover such amount from the Borrower on demand, with
interest thereon at the rate per annum applicable to the Revolving Credit
Loans made on such Drawdown Date.
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2.9. Optional Currencies.
2.9.1. Request for Optional Currency. Subject to the limitations set
forth in Section 2.1., the Borrower may, upon at least three (3) Business
Days' notice to the Agent (an "OC Notice"), request that one or more
Revolving Credit Loans be made in an Optional Currency, provided that any
Revolving Credit Loan proposed to be made under this Section 2.9.1 shall be
in an amount not less than $1,000,000, or a greater amount which is an
integral multiple of $500,000 in excess thereof, or the Dollar Equivalent in
an Optional Currency. Each OC Notice requesting a Revolving Credit Loan in
an Optional Currency shall be by written notice (or telephonic notice
confirmed in writing by the Borrower), specifying (a) the Revolving Credit
Loan to be made, (b) the requested Drawdown Date of the proposed borrowing
of such Revolving Credit Loan, (c) the requested Optional Currency in which
the Revolving Credit Loan is to be made, and (d) the initial Interest Period
for the Revolving Credit Loan to be borrowed. To the extent the Agent
receives such notice by 11:00 a.m. (Boston time) on any day, it shall
provide the Banks with notice on such date, or, if the Agent receives notice
after 11:00 a.m. (Boston time), it shall provide the Banks with notice on
the next Business Day. If any Bank, on or prior to any Drawdown Date,
determines (which determination shall be conclusive) that the requested
Optional Currency is not freely transferable and convertible into Dollars or
that it will be impracticable for such Bank to fund the Revolving Credit
Loan in such Optional Currency, then such Bank shall immediately so notify
the Agent, which notification shall be given immediately by the Agent to the
Borrower, and such Bank's portion of the requested Revolving Credit Loan
shall instead be denominated in Dollars. In the event that the Borrower
repays such portion of a Revolving Credit Loan denominated in Dollars in
accordance with Section 3 hereof and such repayment, and the fluctuation of
currency exchange rates, results in Revolving Credit Loans being then
outstanding that are not in Dollar Equivalent amounts held pro rata in
accordance with the Commitment Percentages, then all subsequent principal
repayments denominated in the Optional Currency which the applicable Bank
did not advance shall be made by the Borrower to the Agent for the
respective accounts of the Banks other than such Bank on a pro rata basis
until such time as the Revolving Credit Loans are outstanding on a pro rata
basis. Subject to the foregoing and to the satisfaction of the terms and
conditions of Section 11 (in the case of such Revolving Credit Loans to be
made on the Closing Date) and Section 12, each Revolving Credit Loan
requested to be made in an Optional Currency will be made on the Drawdown
Date specified therefor in the OC Notice, in the currency requested in the
OC Notice and, upon being so made, will have the Interest Period requested
in the OC Notice.
2.9.2. Exchange Rate. For purposes of this Credit Agreement the amount
in one Optional Currency which shall be equivalent on any particular date to
a specified amount in another Optional Currency shall be
28
that amount (as conclusively ascertained by the Agent by its normal banking
practices, absent manifest error) in the first Optional Currency which is or
could be purchased by the Agent (in accordance with normal banking
practices) with such specified amount in the second Optional Currency in any
recognized Eurocurrency Interbank Market selected by the Agent in good faith
for delivery on such date at the spot rate of exchange prevailing at 10:00
a.m. (London time) (or as soon thereafter as practicable) on such date.
2.9.3. Multiple Denominations. In the event that any portion of the
funds available under the terms of this Credit Agreement is denominated in
one or more Optional Currencies, the Dollar Equivalent of such portion of
the funds shall be calculated pursuant to the definition of "Dollar
Equivalent". The amount so determined shall then be added to the amount
already outstanding in Dollars for the purpose of determining the remaining
availability of funds under Section 2.1 and Section 2.9.1 hereof and any
required repayments under the following Section 2.9.4.
2.9.4. Repayment. If at any time prior to the Revolving Credit Loan
Maturity Date, the Dollar Equivalent of the aggregate principal amount
outstanding of all Revolving Credit Loans hereunder shall exceed the Total
Commitment as a result of fluctuations in respective currency conversion
rates for three (3) or more consecutive Business Days, the Borrower shall
pay or cause to be paid immediately, upon demand made by the Agent, such
amounts as are sufficient to eliminate such excess and to reduce the
aggregate principal amount outstanding to the Dollar Equivalent in the
applicable currencies of the Total Commitment.
2.9.5. Funding. Each Bank may make any Revolving Credit Loan
denominated in an Optional Currency by causing its Eurocurrency Lending
Office or any of its foreign branches or foreign affiliate to make such
Revolving Credit Loan (whether or not such lending office, branch or
affiliate is named as a lending office on the signature pages hereof);
provided that in such event the obligation of the Borrower to repay such
Revolving Credit Loan shall nevertheless be to such Bank and shall, for all
purposes of this Credit Agreement (including without limitation for purposes
of the definition of the term "Majority Banks") be deemed made by such Bank
to the extent of such Revolving Credit Loan, for the account of such
applicable lending office, branch or affiliate.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity. The Borrower promises to pay on the Revolving Credit Loan
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
29
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time the
outstanding amount of the Revolving Credit Loans, the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations exceeds the Total Commitment, then
the Borrower shall immediately pay the amount of such excess to the Agent for
the respective accounts of the Banks for application: first, to any Unpaid
Reimbursement Obligations; second, to the Revolving Credit Loans; and third,
to provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by Section 4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Bank's Revolving Credit Note, with adjustments to
the extent practicable to equalize any prior payments or repayments not
exactly in proportion. In addition, in the event the Borrower or any of its
Subsidiaries receives any (a) Net Cash Sale Proceeds from the sale or other
disposition of assets (other than the sale or disposition of assets in the
ordinary course of business consistent with past practices) permitted by
Section 9.5 which have not been reinvested by the Borrower or such Subsidiary
in replacement assets in which the Agent shall have a first priority
perfected security interest for the benefit of the Agent and the Banks within
270 days of receipt by the Borrower or such Subsidiary; (b) proceeds of
insurance claims which have not been reinvested by the Borrower or such
Subsidiary in replacement assets or to repair the asset so damaged, as the
case may be, within 270 days of receipt by such Person of such proceeds or
(c) Net Cash Proceeds from any Equity Issuance by the Borrower or its
Subsidiaries (other than Net Cash Proceeds received so long as no Event of
Default has occurred and is continuing and provided 100% of the aggregate
amount of such Net Cash Proceeds are used within 180 days after the receipt
thereof to finance all or any portion of a Permitted Acquisition), the
Borrower shall, (1) as to Section 3.2(a) and (b), immediately upon the
expiration of the 270 days after receipt thereof, and (2) as to Section
3.2(c), immediately upon the receipt thereof (in the case of Net Cash
Proceeds which are not to be used to finance all or any portion of a
Permitted Acquisition) or immediately upon the expiration of 180 days after
receipt thereof (in the case of Net Cash Proceeds the borrower intends to use
for such Permitted Acquisitions), as the case may be, repay the outstanding
Revolving Credit Loans in an amount equal to 100% of such Net Cash Sale
Proceeds or Net Cash Proceeds, as the case may be, in each case to the extent
not previously applied by the Borrower to the repayment of Revolving Credit
Loans (as certified by the Borrower to the Agent); provided, however, in the
event the Borrower sells or otherwise disposes of the DAS Business or DPDS
Business pursuant to Section 9.5.2(b), so long as no Default or Event of
Default has occurred and is continuing or would exist as a result of such
sale, the Borrower shall be permitted to use the Net Cash Sale Proceeds from
the sale of the DAS Business and/or the DPDS Business to repay a portion of
the Subordinated Notes and for general working capital and corporate purposes.
3.3. Optional Repayments of Revolving Credit Loans. The Borrower shall have
the right, at its election, to repay the outstanding amount of the Revolving
Credit Loans, as a whole or in part, at any time without penalty or premium (but
30
subject to Section 5.10). The Borrower shall give the Agent, no later than 10:00
a.m., Boston time, at least one (1) Business Day prior written notice of any
proposed prepayment pursuant to this Section 3.3 of Base Rate Loans, and three
(3) Business Days notice of any proposed prepayment pursuant to this Section 3.3
of Eurocurrency Rate Loans, in each case specifying the proposed date of
prepayment of Revolving Credit Loans and the principal amount to be prepaid. The
Agent shall promptly notify the Banks of this proposed prepayment. Each such
partial prepayment of the Revolving Credit Loans shall be in an integral
multiple of $1,000,000 (or the Dollar Equivalent), shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of prepayment
and shall be applied, in the absence of instruction by the Borrower, first to
the principal of Base Rate Loans and then to the principal of Eurocurrency Rate
Loans. Each partial prepayment shall be allocated among the Banks, in
proportion, as nearly as practicable, to the respective unpaid principal amount
of each Bank's Revolving Credit Note, with adjustments to the extent practicable
to equalize any prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. Letter of Credit Commitments.
4.1.1. Commitment to Issue Letters of Credit. Subject to the terms
and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance
upon the agreement of the Banks set forth in Section 4.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees,
in its individual capacity, to issue, extend and renew for the account of
the Borrower one or more standby or documentary letters of credit
denominated in Dollars (individually, a "Letter of Credit"), in such form
as may be requested from time to time by the Borrower and agreed to by
the Agent; provided, however, that, after giving effect to such request,
(a) the sum of the aggregate Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not exceed $15,000,000 at any one time
and (b) the sum of (i) the Maximum Drawing Amount on all Letters of
Credit, (ii) all Unpaid Reimbursement Obligations, and (iii) the Dollar
Equivalent of the amount of all Revolving Credit Loans outstanding shall
not exceed the Total Commitment. Notwithstanding the foregoing, the Agent
shall have no obligation to issue any Letter of Credit to support or
secure any Indebtedness of the Borrower or any of its Subsidiaries to the
extent that such Indebtedness was incurred prior to the proposed issuance
date of such Letter of Credit, unless in any such case the Borrower
demonstrates to the satisfaction of the Agent that (x) such prior
incurred Indebtedness were then fully secured by a prior perfected and
unavoidable security interest in collateral provided by the Borrower or
such Subsidiary to the proposed beneficiary of such Letter of Credit or
(y) such prior incurred Indebtedness were then secured or supported by a
letter of credit issued for the account of
31
the Borrower or such Subsidiary and the reimbursement obligation with
respect to such letter of credit was fully secured by a prior perfected and
unavoidable security interest in collateral provided to the issuer of such
letter of credit by the Borrower or such Subsidiary. The Agent shall notify
the Banks of the issuance of a Letter of Credit promptly after issuance
thereof.
4.1.2. Letter of Credit Applications. Each Letter of Credit Application
shall be completed to the satisfaction of the Agent. In the event that any
provision of any Letter of Credit Application shall be inconsistent with any
provision of this Credit Agreement, then the provisions of this Credit
Agreement shall, to the extent of any such inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide for the
payment of sight drafts for honor thereunder when presented in accordance
with the terms thereof and when accompanied by the documents described
therein, and (b) have an expiry date no later than the date which is
fourteen (14) days (or, if the Letter of Credit is confirmed by a confirmer
or otherwise provides for one or more nominated persons, forty-five (45)
days) prior to the Revolving Credit Loan Maturity Date. Each Letter of
Credit so issued, extended or renewed shall be subject to the Uniform
Customs.
4.1.4. Reimbursement Obligations of Banks. Each Bank severally agrees
that it shall be absolutely liable, without regard to the occurrence of any
Default or Event of Default or any other condition precedent whatsoever, to
the extent of such Bank's Commitment Percentage, to reimburse the Agent on
demand for the amount of each draft paid by the Agent under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to Section 4.2 (such agreement for a Bank being called herein the
"Letter of Credit Participation" of such Bank).
4.1.5. Participations of Banks. Each such payment made by a Bank shall
be treated as the purchase by such Bank of a participating interest in the
Borrower's Reimbursement Obligation under Section 4.2 in an amount equal to
such payment. Each Bank shall share in accordance with its participating
interest in any interest which accrues pursuant to Section 4.2.
4.2. Reimbursement Obligation of the Borrower. In order to induce the Agent
to issue, extend and renew each Letter of Credit and the Banks to participate
therein, the Borrower hereby agrees to reimburse or pay to the Agent, for the
account of the Agent or (as the case may be) the Banks, with respect to each
Letter of Credit issued, extended or renewed by the Agent hereunder,
(a) except as otherwise expressly provided in Section 4.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored by
the Agent, or the Agent otherwise makes a payment with respect thereto, (i)
the
32
amount paid by the Agent under or with respect to such Letter of Credit, and
(ii) the amount of any taxes, fees, charges or other costs and expenses
whatsoever incurred by the Agent or any Bank in connection with any payment
made by the Agent or any Bank under, or with respect to, such Letter of
Credit,
(b) upon the reduction (but not termination) of the Total Commitment to
an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations,
and
(c) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with Section 13, an amount equal to the then Maximum Drawing
Amount on all Letters of Credit, which amount shall be held by the Agent
for the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrower under this Section 5.2 at any time from the date such amounts
become due and payable (whether as stated in this Section 4.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Agent on demand at the rate specified in
Section 5.11 for overdue principal on the Revolving Credit Loans.
4.3. Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft
or honor such demand for payment. If the Borrower fails to reimburse the
Agent as provided in Section 4.2 on or before the date that such draft is
paid or other payment is made by the Agent, the Agent shall at any time
thereafter notify the Banks of the amount of any such Unpaid Reimbursement
Obligation. No later than 3:00 p.m. (Boston time) on the Business Day next
following the receipt of such notice, each Bank shall make available to the
Agent, at the Agent's Head Office, in Same Day Funds, such Bank's Commitment
Percentage of such Unpaid Reimbursement Obligation, together with an amount
equal to the product of (a) the average, computed for the period referred to
in clause (c) below, of the weighted average interest rate paid by the Agent
for federal funds acquired by the Agent during each day included in such
period, times (b) the amount equal to such Bank's Commitment Percentage of
such Unpaid Reimbursement Obligation, times (c) a fraction, the numerator of
which is the number of days that elapse from and including the date the Agent
paid the draft presented for honor or otherwise made payment to the date on
which such Bank's Commitment Percentage of such Unpaid Reimbursement
obligation shall become immediately available to the Agent, and the
denominator of which is 360. The
33
responsibility of the Agent to the Borrower and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
4.4. Obligations Absolute. The Borrower's obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to
payment which the Borrower may have or have had against the Agent, any Bank
or any beneficiary of a Letter of Credit. The Borrower further agrees with
the Agent and the Banks that the Agent and the Banks shall not be responsible
for, and the Borrower's Reimbursement Obligations under Section 4.2 shall not
be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove
to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among the Borrower, the beneficiary of any Letter of Credit or any
financing institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of the Borrower against the
beneficiary of any Letter of Credit or any such transferee. The Agent and the
Banks 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, so long as the same
does not result from the Agent's gross negligence or willful misconduct. The
Borrower agrees that any action taken or omitted by the Agent or any Bank
under or in connection with each Letter of Credit and the related drafts and
documents, if done in good faith and in the absence of the Agent's gross
negligence, shall be binding upon the Borrower and shall not result in any
liability on the part of the Agent or any Bank to the Borrower.
4.5. Reliance by Issuer. To the extent not inconsistent with Section 4.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document 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,
independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Credit Agreement unless it shall first have received such advice or
concurrence of the Majority Banks as it reasonably deems appropriate or it
shall first be indemnified to its reasonable 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 Agent shall in
all cases be fully protected in acting, or in refraining from acting, under
this Credit Agreement in accordance with a request of the Majority Banks, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon the Banks and all future holders of the Revolving Credit Notes
or of a Letter of Credit Participation.
34
4.6. Letter of Credit Fee. The Borrower shall pay a fee (in each case, a
"Letter of Credit Fee") to the Agent (a) in respect of each standby Letter of
Credit issued pursuant to this Credit Agreement, calculated at the applicable
rate set forth in the definition of Applicable Margin under the column headed
"Letter of Credit Fees" per annum on the face amount of each such Letter of
Credit, which shall be for the accounts of the Banks in accordance with their
respective Commitment Percentages, plus an amount equal to 0.125% per annum of
the face amount of such standby Letter of Credit shall be for the account of the
Agent as an issuing fee and (b) in respect of each documentary Letter of Credit
issued pursuant to this Credit Agreement, calculated at the applicable rate set
forth in the definition of Applicable Margin under the column headed "Letter of
Credit Fees" per annum on the face amount of each such Letter of Credit, which
shall be for the accounts of the Banks in accordance with their respective
Commitment Percentages, plus an amount equal to 0.125% per annum of the face
amount of such documentary Letter of Credit shall be for the account of the
Agent as an issuing fee. The Letter of Credit Fees for each Letter of Credit
shall be payable quarterly in advance, commencing on the date such Letter of
Credit is issued, renewed or extended hereunder. In respect of each Letter of
Credit, the Borrower shall also pay to the Agent for the Agent's own account, on
the date of any issuance, extension, renewal or amendment of any Letter of
Credit, or at such other time or times as such charges are customarily made by
the Agent, the Agent's customary issuance, amendment, negotiation or document
examination and other administrative fees as in effect from time to time.
5. CERTAIN GENERAL PROVISIONS.
5.1. Closing Fee. The Borrower agrees to pay to the Agent on the Closing
Date the closing fees as set forth in the Fee Letter.
5.2. Agent's Fee. The Borrower shall pay to the Agent an Agent's fee (the
"Agent's Fee") at the times and in the amounts as provided in the Fee Letter.
5.3. Funds for Payments.
5.3.1. Payments to Agent. Except as set forth in the immediately
succeeding sentence, all payments of principal, interest, Reimbursement
Obligations, commitment fees, Letter of Credit Fees, the closing fee and the
Agent's Fee and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Agent, for the respective accounts of
the Banks and the Agent, at the Agent's Head Office or at such other
location in the Boston, Massachusetts, area that the Agent may from time to
time designate, in each case in Same Day Funds. All payments of principal of
and interest made on Revolving Credit Loans made to the Borrower which are
denominated in an Optional Currency or Currencies and all other fees due
hereunder by any local branch or affiliate of the Agent or any Bank located
outside of the United States shall be made in Same Day Funds, for the
account of such Bank or the Agent, as the case may be, at a depository
designated by such Bank in the country in which such Optional Currency is
35
legal tender. Each payment in respect of any Revolving Credit Loan made by
the Borrower shall be made in the same currency in which such Revolving
Credit Loan was made unless otherwise agreed to by such Bank.
5.3.2. No Offset, etc. All payments by the Borrower hereunder and under
any of the other Loan Documents shall be made without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied
by any jurisdiction or any political subdivision thereof or taxing or other
authority therein (a "Governmental Authority") (excluding net income taxes
and franchise taxes imposed in lieu of net income taxes imposed on the Agent
or any Bank as a result of a present or former connection between the
jurisdiction of the Governmental Authority imposing such tax and the Agent
or such Bank (except 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 Credit Agreement or the Notes)) unless the
Borrower is compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Agent, for the account of the Banks or (as the case
may be) the Agent, on the date on which such amount is due and payable
hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Banks or the Agent to receive
the same net amount which the Banks or the Agent would have received on such
due date had no such obligation been imposed upon the Borrower. The Borrower
will deliver promptly to the Agent certificates or other valid vouchers for
all taxes or other charges deducted from or paid with respect to payments
made by the Borrower hereunder or under such other Loan Document. In
addition, to the extent any Bank receives a refund in respect of any taxes
to which it has been indemnified by the Borrower pursuant to this ss.5.3
(and such Bank can determine, in its sole discretion and using any method
which such Bank deems appropriate that all or any portion of such refund is
allocable to any takes paid or indemnified by the Borrower under the Credit
Agreement), it shall promptly repay such refund to the Borrower (to the
extent of amounts that have been paid by the Borrower under this ss.5.3 with
respect to such refund) of such Bank and without interest; provided,
however, that the Borrower, upon the request of such Bank, agrees to return
such refund (plus penalties, interest or other charges) to such Bank in the
event such Bank is required to repay such refund for any reason whatsoever.
Nothing contained in this Section 5.3 shall (a) entitle the Borrower to
inspect or review any books or records of any Bank or the Agent; (b) require
any Bank or the Agent to disclose any information concerning its tax
position or any other information determined by any Bank or the Agent, in
its sole discretion to be confidential or proprietary, (c) require any Bank
or the Agent to establish procedures for allocating to
36
specific transactions any tax savings or benefits attributable to payments
in respect of taxes of the type described in this Section 5.3 or (d) require
any Bank or the Agent to disclose or detail the basis of any calculation of
the amount of any tax savings or benefit obtained by such Bank or the Agent
or the basis of any determination made by such Bank under this paragraph.
5.4. Computations. All computations of interest on the Revolving Credit
Loans and of commitment fees, Letter of Credit Fees or other fees shall, unless
otherwise expressly provided herein, be based on a 360-day year and paid for the
actual number of days elapsed. Except as otherwise provided in the definition of
the term "Interest Period" with respect to Eurocurrency Rate Loans, whenever a
payment hereunder or under any of the other Loan Documents becomes due on a day
that is not a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and interest shall accrue during such
extension. The outstanding amount of the Revolving Credit Loans as reflected on
the Records from time to time shall be considered correct and binding on the
Borrower unless within five (5) Business Days after receipt of any notice by the
Agent or any of the Banks of such outstanding amount, the Agent or such Bank
shall notify the Borrower to the contrary.
5.5. Inability to Determine Eurocurrency Rate. In the event, prior to the
commencement of any Interest Period relating to any Eurocurrency Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate (for Loans
denominated in Dollars) or the International Eurocurrency Rate (for any Loan
denominated in an Optional Currency) applicable to a Revolving Credit Loan
denominated in a particular Optional Currency, as the case may be, that would
otherwise determine the rate of interest to be applicable to any Eurocurrency
Rate Loan during any Interest Period, the Agent shall forthwith give notice of
such determination (which shall be conclusive and binding on the Borrower and
the Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurocurrency Rate Loans shall be
automatically withdrawn and, in the case of Revolving Credit Loans denominated
in Dollars, shall be deemed a request for Base Rate Loans to be denominated in
Dollars and in the case of any Eurocurrency Rate Loan denominated in an Optional
Currency, shall be withdrawn, (b) each Eurocurrency Rate Loan denominated in
Dollars will automatically, on the last day of the then current Interest Period
relating thereto, become a Base Rate Loan and each Eurocurrency Rate Loan
denominated in any Optional Currency will be required to be repaid on the last
day of the then current Interest Period relating thereto, and (c) the
obligations of the Banks to make Eurocurrency Rate Loans shall be suspended
until the Agent or the Majority Banks determine that the circumstances giving
rise to such suspension no longer exist, whereupon the Agent or, as the case may
be, the Agent upon the instruction of the Majority Banks, shall so notify the
Borrower and the Banks. Notwithstanding the foregoing, to the extent such
inability to determine the International Eurocurrency Rate is specific to a
particular Optional Currency, nothing contained herein shall
37
require the Borrower to repay any Eurocurrency Rate Loan denominated in any
other Optional Currency.
5.6. Illegality. Notwithstanding any other provisions herein, if any present
or future law, regulation, treaty or directive or in the interpretation or
application thereof shall make it unlawful for any Bank to make or maintain
Eurocurrency Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurocurrency Rate Loans or convert Revolving
Credit Loans of another Type to Eurocurrency Rate Loans or to make Revolving
Credit Loans in any Optional Currency shall forthwith be suspended and (b) such
Bank's Revolving Credit Loans then outstanding as Eurocurrency Rate Loans, if
any, shall (i) if comprising a Revolving Credit Loan denominated in Dollars, be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurocurrency Rate Loans or within such earlier period
as may be required by law and (ii) if comprising a Revolving Credit Loan
denominated in an Optional Currency, be immediately repaid. The Borrower hereby
agrees promptly to pay the Agent for the account of such Bank, upon demand by
such Bank, any additional amounts necessary to compensate such Bank for any
costs incurred by such Bank in making any conversion in accordance with this
Section 5.6 including any interest or fees payable by such Bank to lenders of
funds obtained by it in order to make or maintain its Eurocurrency Rate Loans
hereunder.
5.7. Additional Costs, etc. If any change in, or change in the application
or interpretation of, any present or future applicable law, which expression, as
used herein, includes statutes, rules and regulations thereunder and
interpretations thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter (or, as to any Person which becomes a Bank
hereunder after the Closing Date, such date on which such Person becomes a Bank
hereunder) made upon or otherwise issued to any Bank or the Agent by any central
bank or other fiscal, monetary or other authority (whether or not having the
force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, any Letters of Credit, such
Bank's Commitment or the Revolving Credit Loans (other than taxes based upon
or measured by the income or profits of such Bank or any branch or lending
office thereof or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Revolving Credit Loans or any other amounts payable to
any Bank or the Agent under this Credit Agreement or any of the other Loan
Documents, or
38
(c) impose or increase or render applicable (other than to the extent
specifically provided for or specifically excluded elsewhere in this Credit
Agreement) any special deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the force of
law) against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any Bank,
or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such Bank's
Commitment, or any class of loans, letters of credit or commitments of which
any of the Revolving Credit Loans or such Bank's Commitment forms a part,
and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Revolving Credit Loans or
such Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Bank or the Agent hereunder
on account of such Bank's Commitment, any Letter of Credit or any of
the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any interest or Reimbursement Obligation or other sum payable
hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or
the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as
often as the occasion therefor may arise, and without duplication for any
amounts paid pursuant to Section 5.3 hereof, pay to such Bank or the Agent
such additional amounts as will be sufficient to compensate such Bank or the
Agent for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum.
5.8. Capital Adequacy. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans
39
to a level below that which such Bank or the Agent could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's or
the Agent's then existing policies with respect to capital adequacy and assuming
full utilization of such entity's capital) by any amount deemed by such Bank or
(as the case may be) the Agent to be material, then such Bank or the Agent may
notify the Borrower of such fact. To the extent that the amount of such
reduction in the return on capital is not reflected in the Base Rate, the
Borrower and such Bank shall thereafter attempt to negotiate in good faith,
within thirty (30) days of the day on which the Borrower receives such notice,
an adjustment payable hereunder that will adequately compensate such Bank in
light of these circumstances. If the Borrower and such Bank are unable to agree
to such adjustment within thirty (30) days of the date on which the Borrower
receives such notice, then commencing on the date of such notice (but not
earlier than the effective date of any such increased capital requirement), the
fees payable hereunder shall increase by an amount that will, in such Bank's
reasonable determination, provide adequate compensation. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
5.9. Certificate. A certificate setting forth any additional amounts payable
pursuant to Sections 5.7 or 5.8 and a brief explanation of such amounts which
are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
5.10. Indemnity. The Borrower agrees to indemnify each Bank and to hold each
Bank harmless from and against any loss, cost or expense (excluding loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any Eurocurrency Rate Loans as and when due and payable, including any such loss
or expense arising from interest or fees payable by such Bank to lenders of
funds obtained by it in order to maintain its Eurocurrency Rate Loans, (b)
default by the Borrower in making a borrowing or conversion after the Borrower
has given (or is deemed to have given) a Loan Request or a Conversion Request
relating thereto in accordance with Section 2.6 or Section 2.7 or (c) the making
of any payment of a Eurocurrency Rate Loan or the making of any conversion of
any such Revolving Credit Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Revolving Credit Loans.
5.11. Interest After Default.
5.11.1. Overdue Amounts. Overdue principal and (to the extent permitted
by applicable law) interest on the Revolving Credit Loans and all other
overdue amounts payable hereunder or under any of the other Loan Documents
shall bear interest compounded monthly and payable on demand at a rate per
annum equal to two percent (2%) above the highest rate of interest otherwise
applicable to such Revolving Credit Loans pursuant to Section 2.5 until such
amount shall be paid in full (after as well as before judgment).
40
5.11.2. Amounts Not Overdue. During the continuance of a Default or an
Event of Default the principal of the Revolving Credit Loans not overdue
shall, until such Default or Event of Default has been cured or remedied or
such Default or Event of Default has been waived by the Majority Banks
pursuant to Section 26, bear interest at a rate per annum equal to two
percent (2%) above the highest rate of interest otherwise applicable to such
Revolving Credit Loans pursuant to Section 2.5.
6. COLLATERAL SECURITY AND GUARANTIES.
6.1. Security of Borrower. The Obligations shall be secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in substantially all of the assets of the
Borrower, whether now owned or hereafter acquired, pursuant to the terms of the
Security Documents to which the Borrower is a party (other than any assets as to
which the Agent, in its sole and absolute discretion, has determined that such
security interests are not, in view of the value of such assets or the
difficulty or costs of obtaining such security interest, appropriate),
including, without limitation, a pledge by the Borrower of 100% of the capital
stock of each Domestic Subsidiary and, so long as no Default or Event of Default
has occurred and is continuing, 65% of the capital stock of each Foreign
Subsidiary owned by the Borrower.
6.2. Guaranties and Security of Subsidiaries. To the extent permitted by the
terms of the Indenture, the Obligations shall also be guaranteed pursuant to the
terms of the Guaranty. To the extent permitted by the Indenture, the obligations
of the Guarantors under the Guaranty shall be in turn secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in substantially all of the assets of each such
Guarantor, whether now owned or hereafter acquired, pursuant to the terms of the
Security Documents to which such Subsidiary is a party (other than any assets as
to which the Agent, in its sole and absolute discretion, has determined that
such security interests are not, in view of the value of such assets or the
difficulty or costs of obtaining such security interest, appropriate),
including, without limitation, a pledge by such Guarantor of 100% of the capital
stock of each Domestic Subsidiary of such Guarantor and, so long as no Default
or Event of Default has occurred and is continuing, 65% of the capital stock of
each Foreign Subsidiary of such Guarantor.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as follows:
7.1. Corporate Authority.
7.1.1. Incorporation; Good Standing. Each of the Borrower and its
Subsidiaries (a) is a corporation (or similar business entity) duly
organized, validly existing and, if applicable in the jurisdiction of
incorporation or organization, in good standing under the laws of its state
or country of
41
incorporation or formation, (b) has all requisite corporate or
similar power to own its property and conduct its business as now conducted
and as presently contemplated, and (c) is in good standing as a foreign
corporation (or similar business entity) and is duly authorized to do
business in each jurisdiction where such qualification is necessary except
where a failure to be so qualified would not have a materially adverse
effect on the business, assets or financial condition of the Borrower or
such Subsidiary.
7.1.2. Authorization. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which the Borrower or any
of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate (or similar)
authority of such Person, (b) have been duly authorized by all necessary
corporate (or similar organizational) proceedings, (c) do not conflict with
or result in any breach or contravention of any provision of law, statute,
rule or regulation to which the Borrower or any of its Subsidiaries is
subject or any judgment, order, writ, injunction, license or permit
applicable to the Borrower or any of its Subsidiaries and (d) do not
conflict with any provision of the corporate charter or bylaws of, or the
Subordinated Debt Documents or any agreement or other instrument binding
upon, the Borrower or any of its Subsidiaries.
7.1.3. Enforceability. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance with
the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement
of creditors' rights and except to the extent that availability of the
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
7.2. Governmental Approvals. The execution, delivery and performance by the
Borrower and any of its Subsidiaries of this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is or is to become a
party and the transactions contemplated hereby and thereby (including, but not
limited to the making by the Borrower of any borrowing contemplated by this
Credit Agreement or the obtaining by the Borrower of any Letters of Credit) do
not require the approval, consent, order, authorization or license by, or giving
of notice to, or taking of any action with respect to, any governmental agency
or authority of any jurisdiction, or other fiscal, monetary or other authority,
under any provisions of any laws or governmental rules, regulations, orders or
decrees of any jurisdiction or the central bank of any jurisdiction or other
fiscal, monetary or other authority, under any provision of any laws or
governmental rules, regulations, orders or
42
decrees of any jurisdiction applicable to or binding on the Borrower or any of
its Subsidiaries, other than those already obtained.
7.3. Title to Properties; Leases. Except as indicated on Schedule 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
7.4. Financial Statements and Projections.
7.4.1. Fiscal Year. The Borrower and each of its Subsidiaries has a
fiscal year which is the twelve months ending on September 30 of each
calendar year.
7.4.2. Financial Statements. There has been furnished to each of the
Banks a consolidated balance sheet of the Borrower and its Subsidiaries as
at the Balance Sheet Date, and a consolidated statement of income of the
Borrower and its Subsidiaries for the fiscal year then ended, certified by
Xxxxxx Xxxxxxxx LLP. Such balance sheet and statement of income have been
prepared in accordance with generally accepted accounting principles and
fairly present the financial condition of the Borrower as at the close of
business on the date thereof and the results of operations for the fiscal
year then ended. There are no contingent liabilities of the Borrower or any
of its Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance sheet and
the notes related thereto.
7.4.3. Projections. The projections of the annual operating budgets of
the Borrower and its Subsidiaries on a consolidated basis, balance sheets
and cash flow statements for the 1998 to 2002 fiscal years, copies of which
have been delivered to each Bank, disclose all assumptions made with respect
to general economic, financial and market conditions used in formulating
such projections. To the knowledge of the Borrower or any of its
Subsidiaries, no facts exist that (individually or in the aggregate) would
result in any material change in any of such projections. The projections
are based upon reasonable estimates and assumptions, have been prepared on
the basis of the assumptions stated therein and reflect the reasonable
estimates of the Borrower and its Subsidiaries of the results of operations
and other information projected therein.
7.4.4. Solvency. The Borrower and its Subsidiaries, on a consolidated
and consolidating basis, both before and after giving effect to the
transactions contemplated by this Credit Agreement and the other Loan
Documents (a) are solvent; (b) have assets having a fair value in excess of
43
their liabilities; (c) have assets having a fair value in excess of the
amount required to pay their liabilities on existing debts as such debts
become absolute and matured, and (d) have, and expect to continue to have,
access to adequate capital for the conduct of their business and the ability
to pay their debts from time to time incurred in connection with the
operation of their business as such debts mature.
7.5. No Material Changes, etc. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended, other
than changes in the ordinary course of business that have not had any materially
adverse effect either individually or in the aggregate on the business or
financial condition of the Borrower or any of its Subsidiaries. Since the
Balance Sheet Date, the Borrower has not made any Distributions.
7.6. Franchises, Patents, Copyrights, etc. Each of the Borrower and its
Subsidiaries owns, licenses or otherwise has rights to all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in respect
of the foregoing, adequate in all material respects for the conduct of its
business substantially as now conducted without known conflict with any rights
of others, except as disclosed on Schedule 7.7.
7.7. Litigation. Except as set forth in Schedule 7.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or, to the
best of the Borrower's knowledge, threatened against the Borrower or any of its
Subsidiaries before any court, tribunal or administrative agency or board that,
if adversely determined, might, either in any case or in the aggregate,
materially adversely affect the properties, assets, financial condition or
business of the Borrower and its Subsidiaries or materially impair the right of
the Borrower and its Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of the Borrower and its
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
7.8. No Materially Adverse Contracts, etc. Neither the Borrower nor any of
its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries.
Neither the Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have any materially adverse effect on the business of the Borrower or any of
its Subsidiaries.
44
7.9. Compliance with Other Instruments, Laws, etc. Neither the Borrower nor
any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of the Borrower or any of its Subsidiaries.
7.10. Tax Status. The Borrower and its Subsidiaries (a) have made or filed
all federal, state and foreign income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them is subject, (b)
have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the
Borrower know of no basis for any such claim.
7.11. No Event of Default. No Default or Event of Default has occurred and
is continuing.
7.12. Holding Company and Investment Company Acts. Neither the Borrower nor
any of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
7.13. Absence of Financing Statements, etc. Except with respect to Permitted
Liens, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry or other public office, that purports to cover, affect or give
notice of any present or possible future lien on, or security interest in, any
assets or property of the Borrower or any of its Subsidiaries or any rights
relating thereto.
7.14. Perfection of Security Interest. Upon the filing of the financing
statements and other documents required by the Security Documents, all filings,
assignments, pledges and deposits of documents or instruments shall have been
made and all other actions shall have been taken that are necessary or
advisable, under applicable law, to establish and perfect the Agent's security
interest in the Collateral. The Collateral and the Agent's rights with respect
to the Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrower or Guarantor party to one of the Security Agreements is
the owner of the Collateral
45
free from any lien, security interest, encumbrance and any other claim or
demand, except for Permitted Liens.
7.15. Certain Transactions. Except for arm's length transactions pursuant to
which the Borrower or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Borrower or such
Subsidiary could obtain from third parties, none of the officers, directors, or
employees of the Borrower or any of its Subsidiaries is presently a party to any
material transaction with the Borrower or any of its Subsidiaries (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
7.16. Employee Benefit Plans.
7.16.1. In General. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all material
respects with the provisions of ERISA and/or all Applicable Pension
Legislation and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions and
the bonding of fiduciaries and other persons handling plan funds as required
by Section 412 of ERISA. The Borrower has heretofore delivered to the Agent
the most recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
Section 103(d) of ERISA, with respect to each Guaranteed Pension Plan.
7.16.2. Terminability of Welfare Plans. [Other than severance paid
plans], no Employee Benefit Plan, which is an employee welfare benefit plan
within the meaning of Section 3(1) or Section 3(2)(B) of ERISA, provides
benefit coverage subsequent to termination of employment, except as required
by Title I, Part 6 of ERISA or the applicable state insurance laws. The
Borrower may terminate each such Plan at any time (or at any time subsequent
to the expiration of any applicable bargaining agreement) in the discretion
of the Borrower without liability to any Person other than for claims
arising prior to termination.
7.16.3. Guaranteed Pension Plans. Each contribution required to be made
to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made.
No waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or has posted
46
security in connection with an amendment to a Guaranteed Pension Plan
pursuant to Section 307 of ERISA or Section 401(a)(29) of the Code. No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by the Borrower or any ERISA Affiliate
with respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event (other than an ERISA Reportable Event as to which the
requirement of 30 days notice has been waived), or any other event or
condition which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date
of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of
any Guaranteed Pension Plan with assets in excess of benefit liabilities.
7.16.4. Multiemployer Plans. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as a
result of a sale of assets described in Section 4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
Section 4241 or Section 4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan intends
to terminate or has been terminated under Section 4041A of ERISA.
7.17. Use of Proceeds.
7.17.1. General. The proceeds of the Revolving Credit Loans shall be
used to refinance and replace the "Senior Secured Debt" (as such term is
defined in the Subordinated Indenture) of the Borrower and for other general
corporate purposes. The Borrower will obtain Letters of Credit solely for
working capital and general corporate purposes.
7.17.2. Regulations U and X. No portion of any Revolving Credit Loan is
to be used, and no portion of any Letter of Credit is to be obtained, for
the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
7.17.3. Ineligible Securities. No portion of the proceeds of any
Revolving Credit Loans is to be used, and no portion of any Letter of Credit
is to be obtained, for the purpose of (a) knowingly purchasing, or providing
credit support for the purchase of, Ineligible Securities from a Section 20
Subsidiary during any period in which such Section 20 Subsidiary makes a
47
market in such Ineligible Securities, (b) knowingly purchasing, or providing
credit support for the purchase of, during the underwriting or placement
period, any Ineligible Securities being underwritten or privately placed by
a Section 20 Subsidiary, or (c) making, or providing credit support for the
making of, payments of principal or interest on Ineligible Securities
underwritten or privately placed by a Section 20 Subsidiary and issued by or
for the benefit of the Borrower or any Subsidiary or other Affiliate of the
Borrower.
7.18. Environmental Compliance. The Borrower has taken all necessary steps
to investigate the past and present condition and usage of the Real Estate and
the operations conducted thereon and, based upon such diligent investigation,
has determined that, except as set forth on Schedule 7.18 hereto:
(a) none of the Borrower, its Subsidiaries or any operator of the Real
Estate or any operations thereon is in violation, or alleged violation, of
any judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986
("XXXX"), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment or
any other applicable law, regulation, ordinance, order or decree in any
other counry, province or jurisdiction applicable to the Borrower or any of
its Subsidiaries (hereinafter "Environmental Laws"), which violation would
have a material adverse effect on the environment or the business, assets or
financial condition of the Borrower or any of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site listed on
the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that any
hazardous waste, as defined by 42 U.S.C. Section 6903(5), any hazardous
substances as defined by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33) and any toxic
substances, oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which any one
of them has generated, transported or disposed of has been found at any site
at which a federal, state or local agency or other third party has conducted
or has ordered that any Borrower or any of its Subsidiaries conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or
48
administrative proceeding (in each case, contingent or otherwise) arising
out of any third party's incurrence of costs, expenses, losses or damages of
any kind whatsoever in connection with the release of Hazardous Substances;
(c) (i) no portion of the Real Estate has been used for the handling,
processing, storage or disposal of Hazardous Substances except in accordance
with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of the Real Estate; (ii) in the course of any activities conducted
by the Borrower, its Subsidiaries or operators of its properties, no
Hazardous Substances have been generated or are being used on the Real
Estate except in accordance with applicable Environmental Laws; (iii) there
have been no releases (i.e. any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases of Hazardous
Substances on, upon, into or from the properties of the Borrower or its
Subsidiaries, which releases would have a material adverse effect on the
value of any of the Real Estate or adjacent properties or the environment;
(iv) to the best of the Borrower's knowledge, there have been no releases
on, upon, from or into any real property in the vicinity of any of the Real
Estate which, through soil or groundwater contamination, may have come to be
located on, and which would have a material adverse effect on the value of,
the Real Estate; and (v) in addition, any Hazardous Substances that have
been generated on any of the Real Estate have been transported offsite only
by carriers having an identification number issued by the EPA (or by a
similar agency in other jurisdictions, if applicable), treated or disposed
of only by treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters and
facilities have been and are, to the best of the Borrower's knowledge,
operating in compliance with such permits and applicable Environmental Laws;
and
(d) None of the Borrower and its Subsidiaries or any of the Real Estate
is subject to any applicable environmental law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency or
the recording or delivery to other Persons of an environmental disclosure
document or statement by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the effectiveness of any other
transactions contemplated hereby.
7.19. Subsidiaries, etc. Schedule 7.19(a) sets forth the Subsidiaries of the
Borrower and each Subsidiary as of the Closing Date. Except as set forth on
Schedule 7.19(b) hereto, neither the Borrower nor any Subsidiary of the Borrower
is engaged in any joint venture or partnership with any other Person.
49
7.20. Bank Accounts. Schedule 7.20 sets forth the account numbers and
location of all bank accounts of the Borrower or any of its Domestic
Subsidiaries as of the Closing Date.
7.21. Disclosure. There is no fact known to the Borrower or any of its
Subsidiaries which materially adversely affects, or which is reasonably likely
in the future to materially adversely affect, the business, assets, financial
condition or prospects of the Borrower or any of its Subsidiaries, exclusive of
effects resulting from changes in general economic conditions, legal standards
or regulatory conditions.
7.22. Status of Loans as Senior Debt. All Obligations of each of the
Borrower and its Subsidiaries to the Banks and the Agent in respect of the
Revolving Credit Loans and the Reimbursement Obligations constitute "Senior
Indebtedness" (or the analogous terms used therein) under the terms of each of
the Subordinated Debt Documents or of any other instrument evidencing or
pursuant to which there is issued Indebtedness which purports to be Subordinated
Debt of any Borrower or any Subsidiary.
7.23. Subordinated Debt Documents. Each of the representations and
warranties made by the Company and its Subsidiaries in any of the Subordinated
Debt Documents was true and correct in all material respects when made and
continue to remain true and correct in all material respects on the Closing
Date, except to the extent that any of such representations and warranties
relate, by the express terms thereof, solely to a date falling prior to the
Closing Date, and except to the extent that any of such representations and
warranties may have been affected by the consummation of the transactions
contemplated and permitted or required by the Subordinated Debt Documents or the
Loan Documents.
7.24. Designation of Senior Debt. The Company (a) has not designated any
Person as the trustee representing holders of Senior Indebtedness of the
Borrower or any of its Subsidiaries, other than the Agent, and (b) the
Obligations hereunder constitute all of the "Senior Indebtedness" under each of
the Subordinated Indenture and the Subsequent Subordinated Indenture and there
is no other "Senior Indebtedness" thereunder.
7.25. No Withholding. Neither this Credit Agreement nor any of the other
Loan Documents is subject to any registration or stamp tax or any other similar
or like taxes payable in any jurisdiction.
7.26. No Filings Required. No filing, recording or enrolling of this Credit
Agreement or any other Loan Document is required to ensure the legality,
validity, enforceability or admissibility in evidence of this Credit Agreement
or any other Loan Document.
7.27. Chief Executive Office. The Company's chief executive office is at
00000 Xxxxxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000, at which location its books
and
50
records are kept. Each of the Guarantors' chief executive office or registered
office, as applicable, is as set forth in the Security Agreement to which it is
a party.
7.28. Delivery of Certain Documents. The Company has delivered to the Agent
true and complete copies of all of the Subordinated Debt Documents as well as
the FIMCO Acquisition Documents (including any amendments thereto). Each of the
representations and warranties made by the Borrower and any of its Subsidiaries
in any of the Subordinated Debt Documents and FIMCO Acquisition Documents was
true and correct in all material respects when made and continues to be true and
correct in all material respects on the Closing Date, except to the extent that
any of such representations and warranties relate, by the express terms thereof,
solely to a date falling prior to the Closing Date, and except to the extent
that any of such representations and warranties may have been affected by the
consummation of the transactions contemplated and permitted or required by the
Loan Documents.
7.29. Insurance. The Borrower and each of its Subsidiaries maintains with
financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices.
7.30. Year 2000 Problem. The Borrower and each of its Subsidiaries has
reviewed the areas within their businesses and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the "Year 2000 Problem" (i.e. the risk that computer
applications used by the Borrower or any of its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999). Based upon such review, the
Borrower reasonably believes that the "Year 2000 Problem" will not have any
material adverse effect on the assets, business or financial condition of the
Borrower and its Subsidiaries.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
8.1. Punctual Payment. The Borrower will duly and punctually pay or cause to
be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Agent's fee and all other amounts provided for in this Credit Agreement and the
other Loan Documents to which the Borrower or any of its Subsidiaries is a
party, all in accordance with the terms of this Credit Agreement and such other
Loan Documents.
51
8.2. Maintenance of Office. The Borrower will maintain its chief executive
office in Poway, California, or at such other place in the United States of
America as the Borrower shall designate upon prior written notice to the Agent,
where notices, presentations and demands to or upon the Borrower in respect of
the Loan Documents to which the Borrower is a party may be given or made.
8.3. Records and Accounts. The Borrower will (a) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with generally
accepted accounting principles, (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, and (c) at all times engage Xxxxxx Xxxxxxxx
LLP or other independent certified public accountants satisfactory to the Agent
as the independent certified public accountants of the Borrower and its
Subsidiaries and will not permit more than thirty (30) days to elapse between
the cessation of such firm's (or any successor firm's) engagement as the
independent certified public accountants of the Borrower and its Subsidiaries
and the appointment in such capacity of a successor firm as shall be
satisfactory to the Agent.
8.4. Financial Statements, Certificates and Information. The Borrower will
deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than 105 days
after the end of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries and the consolidating balance
sheet of the Borrower and its Subsidiaries, each as at the end of such year,
and the related consolidated statement of income and consolidated statement
of cash flow and consolidating statement of income and consolidating
statement of cash flow for such year, each setting forth in comparative form
the figures for the previous fiscal year and all such consolidated and
consolidating statements to be in reasonable detail, prepared in accordance
with generally accepted accounting principles, and as to the consolidated
statements, certified without qualification by Xxxxxx Xxxxxxxx LLP or by
other independent certified public accountants satisfactory to the Agent,
together with a written statement from such accountants to the effect that
they have read a copy of this Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no knowledge
of any Default or Event of Default, or, if such accountants shall have
obtained knowledge of any then existing Default or Event of Default they
shall disclose in such statement any such Default or Event of Default;
provided that such accountants shall not be liable to the Banks for failure
to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than sixty (60)
days after the end of each of the fiscal quarters of the Borrower, copies of
the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries
52
and the unaudited consolidating balance sheet of the Borrower and its
Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash flow and
consolidating statement of income and consolidating statement of cash flow
for the portion of the Borrower's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with generally accepted
accounting principles, together with a certification by the principal
financial or accounting officer of the Borrower that the information
contained in such financial statements fairly presents the financial
position of the Borrower and its Subsidiaries on the date thereof (subject
to year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower in substantially
the form of Exhibit C hereto (the "Compliance Certificate") and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in Section 10 and (if applicable) reconciliations to
reflect changes in generally accepted accounting principles since the
Balance Sheet Date, together with evidence that the Borrower has met and
continues to meet the minimum coverage test for incurring additional Senior
Indebtedness (as such term is defined in each of the Subordinated Indenture
and the Subsequent Subordinated Indenture) set forth in (a) Section 4.3(a)
(i) of the Subordinated Indenture and (b) the Subsequent Subordinated
Indenture and a certification that no default or event of default has
occurred and is continuing under each of the Subordinated Indenture and the
Subsequent Subordinated Indenture;
(d) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower;
(e) from time to time upon request of the Agent, projections of the
Borrower and its Subsidiaries updating those projections delivered to the
Banks and referred to in Section 7.4.2 or, if applicable, updating any later
such projections delivered in response to a request pursuant to this
Section 8.4(e); and
(j) from time to time such other financial data and information
(including accountants, management letters) as the Agent or any Bank may
reasonably request.
8.5. Notices.
8.5.1. Defaults. The Borrower will promptly notify the Agent and each
of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to
which the Borrower
53
or any of its Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise, the Borrower shall forthwith give written
notice thereof to the Agent and each of the Banks, describing the notice or
action and the nature of the claimed default.
8.5.2. Environmental Events. The Borrower will promptly give notice to
the Agent and each of the Banks (a) of any violation of any Environmental
Law that the Borrower or any of its Subsidiaries reports in writing or is
reportable by such Person in writing (or for which any written report
supplemental to any oral report is made) to any federal, state or local
environmental agency and (b) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any
agency of potential environmental liability, of any federal, state or local
environmental agency or board, that has the potential to materially affect
the assets, liabilities, financial conditions or operations of the Borrower
or any of its Subsidiaries, or the Agent's security interests pursuant to
the Security Documents.
8.5.3. Notification of Claim against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Agent and each of the
Banks in writing of any setoff, claims (including, with respect to the Real
Estate, environmental claims), withholdings or other defenses to which any
of the Collateral, or the Agent's rights with respect to the Collateral, are
subject.
8.5.4. Notice of Litigation and Judgments. The Borrower will, and will
cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Borrower or any of its Subsidiaries or to
which the Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower or any of its Subsidiaries
that could reasonably be expected to have a materially adverse effect on the
Borrower or any of its Subsidiaries and stating the nature and status of
such litigation or proceedings. The Borrower will, and will cause each of
its Subsidiaries to, give notice to the Agent and each of the Banks, in
writing, in form and detail satisfactory to the Agent, within ten (10) days
of any judgment not covered by insurance, final or otherwise, against the
Borrower or any of its Subsidiaries in an amount in excess of [$500,000].
8.6. Corporate Existence; Maintenance of Properties. The Borrower will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied
54
with all necessary equipment, (b) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (c) will, and will cause each of its Subsidiaries to, continue to engage
primarily in the businesses now conducted by them and in related businesses;
provided that nothing in this Section 8.6 shall prevent the Borrower from
discontinuing the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the judgment of the
Borrower, desirable in the conduct of its or their business and that do not in
the aggregate materially adversely affect the business of the Borrower and its
Subsidiaries on a consolidated basis.
8.7. Insurance. The Borrower will, and will cause each of its Subsidiaries
to, maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and contingencies
as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent and
in accordance with the terms of the Security Agreements.
8.8. Taxes. The Borrower will, and will cause each of its Subsidiaries to,
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
8.9. Inspection of Properties and Books, etc.
8.9.1. General. The Borrower shall permit the Banks, through the Agent
or any of the Banks' other designated representatives, to visit and inspect
any of the properties of the Borrower or any of its Subsidiaries, to examine
the books of account of the Borrower and its Subsidiaries (and to make
copies thereof and extracts therefrom), and to discuss the affairs, finances
and accounts of the Borrower and its Subsidiaries with, and to be advised as
to the same by, its and their officers, all at such reasonable times and
intervals as the Agent or any Bank may reasonably request.
55
8.9.2. Appraisals. If an Event of Default shall have occurred and be
continuing, upon the request of the Agent, the Borrower will obtain and
deliver to the Agent appraisal reports in form and substance and from
appraisers satisfactory to the Agent, stating (a) the then current fair
market, orderly liquidation and forced liquidation values of all or any
portion of the equipment or real estate owned by the Borrower or any of its
Subsidiaries and (b) the then current business value of each of the Borrower
and its Subsidiaries. All such appraisals shall be conducted and made at the
expense of the Borrower.
8.9.3. Communications with Accountants. The Borrower authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate directly
with the Borrower's independent certified public accountants and authorizes
such accountants to disclose to the Agent and the Banks any and all
financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries; provided that unless consented to by the Borrower, such
communications shall only be made in the presence of an authorized officer
of the Borrower. At the request of the Agent, the Borrower shall deliver a
letter addressed to such accountants instructing them to comply with the
provisions of this Section 8.9.3.
8.10. Compliance with Laws, Contracts, Licenses, and Permits. The Borrower
will, and will cause each of its Subsidiaries to, comply with (a) the applicable
laws and regulations wherever its business is conducted, including all
Environmental Laws, (b) the provisions of its charter documents and by-laws, (c)
all agreements and instruments by which it or any of its properties may be bound
and (d) all applicable decrees, orders, and judgments. If any authorization,
consent, approval, permit or license from any officer, agency or instrumentality
of any government shall become necessary or required in order that the Borrower
or any of its Subsidiaries may fulfill any of its obligations hereunder or any
of the other Loan Documents to which the Borrower or such Subsidiary is a party,
the Borrower will, or (as the case may be) will cause such Subsidiary to,
immediately take or cause to be taken all reasonable steps within the power of
the Borrower or such Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Agent and the Banks with evidence thereof.
8.11. Employee Benefit Plans. The Borrower will (a) promptly upon filing the
same with the Department of Labor or Internal Revenue Service, furnish to the
Agent a copy of the most recent actuarial statement required to be submitted
under Section 103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan, (b) promptly upon
receipt or dispatch, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under Sections 302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under Sections 4041A, 4202, 4219, 4242, or
56
4245 of ERISA, and (c) furnish to the Agent (at such time as such reports are
prepared in order to comply with Applicable Pension Legislation) copies of all
actuaries' reports in relation to the employee Benefit Plans operated by it from
time to time.
8.12. Use of Proceeds. The Borrower will use the proceeds of the Revolving
Credit Loans solely (a) to refinance existing Indebtedness of the Borrower; and
(b) for working capital and general corporate purposes (including to finance all
or any portion of a Permitted Acquisition). The Borrower will obtain Letters of
Credit solely for working capital and general corporate purposes.
8.13. Fair Labor Standards Act. The Borrower shall, and shall require each
Subsidiary to, at all times operate its business in compliance with all material
applicable provisions of the Fair Labor Standards Act of 1938, as amended. None
of the inventory of the Borrower or any of its Subsidiaries are or will be
produced by employees of (a) the Borrower or any of its Subsidiaries, or (b) to
the best knowledge of the Borrower, by employees of suppliers, who are, in each
case, employed in violation of any applicable minimum wage or maximum hour
provisions of the Fair Labor Standards Act (29 U.S.C. Sections 206 and 207) or
any applicable regulations promulgated thereunder, in each case, as in effect
from time to time.
8.14. Guarantors. To the extent permitted by the terms of the Indenture, the
Borrower will cause each Domestic Subsidiary created, acquired or existing on or
after the Closing Date or any other Subsidiary which is otherwise required to
become a guarantor under the Subordinated Indenture or the Subsequent
Subordinated Indenture, to become a Guarantor immediately and shall cause such
Subsidiary to execute and deliver to the Agent for the benefit of the Agent and
the Banks (a) a Guaranty (or an Instrument of Adherence to the Guaranty executed
on the Closing Date), and (b) further Security Documents or other instruments
and documents as the Agent may reasonably require in order to grant to the Agent
a first priority perfected security interest in such Subsidiary's assets,
together with legal opinions in form and substance reasonably satisfactory to
the Agent to be delivered to the Agent and the Banks opining as to the
authorization, validity and enforceability of such Guaranty or Instrument of
Adherence and Security Documents and (as to the applicable Security Documents)
the perfection of such security interests.
8.15. Subordinated Guarantees. The Company will promptly advise the Agent of
any guarantee entered into in connection with the Subordinated Indenture or the
Subsequent Subordinated Indenture, identifying the guarantor thereunder.
8.16. Status of Loans as Senior Debt. The Company shall, on the Closing Date
and at such other times as may reasonably be requested by the Agent, deliver to
the Agent an officer's certificate satisfactory in form and substance to the
Agent and, if requested by the Agent or Majority Banks, a legal opinion
satisfactory in form and substance to the Agent, evidencing that the
Indebtedness of the Borrower
57
and its Subsidiaries to the Agent and the Banks in respect of the Revolving
Credit Loans and Reimbursement Obligations constitutes "Senior Indebtedness" (or
the analogous term used therein) under the terms of each of the Subordinated
Debt Documents or of any other instrument evidencing or pursuant to which there
is issued indebtedness which purports to be Subordinated Debt of the Borrower or
any of its Subsidiaries and that (a) up to $80,000,000 of the Obligations under
this Credit Agreement are permitted pursuant to Section 4.3(a)(ii)(B) of the
Subordinated Indenture and the applicable provisions of the Subsequent
Subordinated Indenture and (b) all other Obligations under this Credit Agreement
would constitute Senior Indebtedness under the Subordinated Debt Documents.
8.17. Additional Subsidiaries. If, after the Closing Date, the Borrower or
any of its Subsidiaries creates or acquires, either directly or indirectly, any
Subsidiary, it will immediately notify the Agent and the Banks if such creation
or acquisition, as the case may be, and provide the Agent and the Banks with an
updated Schedule 7.19(a) hereof and take all other actions required by Section
8.14 and Section 9.5.1 hereof.
8.18. Interest Rate Protection. The Borrower will, not later than ninety
(90) days after the date on which more than fifty percent (50%) of the
Borrower's Total Funded Indebtedness is bearing interest at a floating rate,
purchase an interest rate cap or swap or effect other interest rate protection
arrangements for a minimum period of three years applicable to that portion of
the outstanding Indebtedness bearing interest at a floating rate which causes
more than fifty percent (50%) of the Borrower's Total Funded Indebtedness to
bear interest at a floating rate, on terms and conditions satisfactory to the
Agent and the Banks.
8.19. Further Assurances. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligations to issue, extend or renew any Letters of
Credit:
9.1. Restrictions on Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any of the
Loan Documents;
58
(b) endorsements for collection, deposit or negotiation and warranties
of products or services, in each case incurred in the ordinary course of
business;
(c) Subordinated Debt under the Subordinated Notes and the Subsequent
Subordinated Notes;
(d) Indebtedness incurred in connection with the acquisition after the
date hereof of any real or personal property by the Borrower or such
Subsidiary or under any Capitalized Lease, or Indebtedness incurred by any
Subsidiary for working capital purposes, provided that the aggregate
principal amount of such Indebtedness of the Borrower and its Subsidiaries
shall not exceed the aggregate amount of $15,000,000 at any one time;
(e) Indebtedness existing on the date hereof and listed and described
on Schedule 9.1 hereto;
(f) Indebtedness of a Guarantor to the Borrower or another Guarantor
and Indebtedness of the Borrower to any Guarantor;
(g) Indebtedness of the Borrower in respect of interest rate protection
arrangements required to be maintained by ss.8.18 or in respect of currency
swap arrangements or other interest rate protection arrangements so long as
such arrangements are in the ordinary course of business and are not for
speculative purposes;
(h) unsecured Indebtedness of any Foreign Subsidiary to the Borrower
provided (i) no Default or Event of Default has occurred and is continuing
or would exist as a result thereof; and (ii) such Indebtedness is evidenced
by an intercompany note in form and substance acceptable to the Agent, and
such note is pledged by the Borrower to the Agent to secure the Borrower's
Obligations hereunder; and
(i) Indebtedness of a Foreign Subsidiary not otherwise provided for in
this Section 9.1, provided that the aggregate principal amount of all such
Indebtedness for all Foreign Subsidiaries shall not exceed at any one time
an amount equal to $5,000,000
provided, however, notwithstanding the foregoing provisions of this
Section 9.1, all such Indebtedness must in any event qualify at all times as
"Indebtedness" (as such term is defined in the Subordinated Indenture and
the Subsequent Subordinated Indenture) permitted to be incurred pursuant to
(a) ss.4.3 of the Subordinated Indenture and (b) the Subsequent Subordinated
Indenture.
9.2. Restrictions on Liens. The Borrower will not, and will not permit any
of its Subsidiaries to, (a) create or incur or suffer to be created or incurred
or to exist
59
any lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest of any kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits therefrom; (b)
transfer any of such property or assets or the income or profits therefrom for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to payment of its general creditors; (c)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement; (d) suffer to exist for a period of more than thirty (30)
days after the same shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; (e)
sell, assign, pledge or otherwise transfer any "receivables" as defined in
clause (g) of the definition of the term "Indebtedness," with or without
recourse; or (f) enter into or permit to exist any arrangement or agreement,
enforceable under applicable law, which directly or indirectly prohibits the
Borrower or any of its Subsidiaries from creating or incurring any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest
other than in favor of the Agent for the benefit of the Banks and the Agent
under the Loan Documents and other than customary anti-assignment provisions in
leases and licensing agreements entered into by the Borrower or such Subsidiary
in the ordinary course of its business, provided that the Borrower or any of its
Subsidiaries may create or incur or suffer to be created or incurred or to
exist:
(a) liens in favor of the Borrower on all or part of the assets of
Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries of
the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government charges in
respect of obligations not overdue or liens on properties to secure claims
for labor, material or supplies in respect of obligations not overdue;
(c) deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations;
(d) liens on properties in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which the
Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties, in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;
60
(f) encumbrances on Real Estate consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and defects
and irregularities in the title thereto, landlord's or lessor's liens under
leases to which the Borrower or a Subsidiary of the Borrower is a party, and
other minor liens or encumbrances none of which in the opinion of the
Borrower interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a materially adverse
effect on the business of the Borrower individually or of the Borrower and
its Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on Schedule 9.2
hereto;
(h) purchase money security interests in or purchase money mortgages on
real or personal property acquired after the date hereof to secure purchase
money Indebtedness of the type and amount permitted by Section 9.1(d),
incurred in connection with the acquisition of such property, which security
interests or mortgages cover only the real or personal property so acquired;
(i) liens granted by a Foreign Subsidiary to secure Indebtedness of
such Foreign Subsidiary of the type and amount permitted by Section 9.1(i);
and
(j) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents.
9.3. Restrictions on Investments. The Borrower will not, and will not permit
any of its Subsidiaries to, make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks or banks organized
under the laws of any country which is a member of the OECD, having
total assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Xxxxx'x Investors Service, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;
61
(d) Investments existing on the date hereof and listed on Schedule 9.3
hereto;
(e) Investments with respect to Indebtedness permitted by ss.9.1(f) so
long as such entities remain Subsidiaries of the Borrower and a Guarantor
hereunder and other Investments by the Borrower in Foreign Subsidiaries (and
which Investments would not consitute Indebtedness of such Foreign
Subsidiary (collectively the "Equity Investments")) provided the aggregate
amount of all such Equity Investments does not exceed $5,000,000 in the
aggregate;
(f) Investments consisting of the Guaranty;
(g) Investments with respect to Indebtedness permitted by Section
9.1(h) so long as such entities remain Subsidiaries of the Borrower and so
long as such Investments are in the form of an intercompany loan, with the
note evidencing such loan being pledged to the Agent, and Investments with
respect to an equity contribution made by the Borrower to Subsidiaries in an
aggregate amount not to exceed $15,000,000;
(h) Investments consisting of promissory notes, deferred payment
obligations or similar arrangements, received as proceeds of asset
dispositions permitted by Section 9.5.2;
(i) Investments consisting of Permitted Acquisitions;
(j) Investments in respect of Open Market Purchases permitted to be
made pursuant to Section 9.4;
(k) Investments consisting of repurchase agreements collateralized by
securities described in paragraphs (a), (b) or (c) above; and
(l) Investment in joint ventures or Persons in which the Borrower or
any Subsidiary holds a minority equity interest, provided the aggregate
amount of all such Investments does not exceed $5,000,000 and no single
Investment or series of related Investments in the same joint venture or
Person exceeds $2,500,000;
provided, however, that (a) with the exception of demand deposits referred to in
Section 9.3(b), such Investments will be considered Investments permitted by
this Section 9.3 only if all actions have been taken to the satisfaction of the
Agent to provide to the Agent, for the benefit of the Banks and the Agent, a
first priority perfected security interest in all of such Investments free of
all encumbrances other than Permitted Liens; and (b) all Investments made
pursuant to this Section 9.3 must be permitted to be made pursuant to the
Subordinated Indenture and the Subsequent Subordinated Indenture.
62
9.4. Distributions. The Borrower and its Subsidiaries will not make any
Restricted Payments; provided, however, any Subsidiary shall be permitted to
make a Distribution to any Guarantor or the Borrower.
9.5. Merger, Consolidation and Disposition of Assets.
9.5.1. Mergers and Acquisitions. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than acquisitions in the ordinary course of business,
consistent with past practices) except, so long as no Default or Event of
Default has occurred and is continuing or would exist after giving effect
thereto:
(a) the merger or consolidation of one or more of the Subsidiaries of
the Borrower with and into the Borrower or a Guarantor hereunder and
provided the Borrower or the Guarantor, as the case may be, has taken or
caused to be taken all action necessary to grant to the Agent a first
priority perfected security interest in the Borrower's or such other
Guarantor's assets after such merger or consolidation to the same extent as
in the assets of parties to the merger prior thereto; and
(b) (i) the acquisition of the assets of, and assumption of certain
liabilities of First Image Management Company (the "FIMCO Acquisition"),
provided (1) no Default or Event of Default has occurred and is continuing
or would exist as a result of such acquisition, (2) the Borrower has
delivered to the Agent copies of all documents, instruments and agreements
to be entered into in connection therewith (the "FIMCO Acquisition
Documents"), and all such documents, instruments and agreements are in form
and substance satisfactory to the Agent; (3) the Agent is reasonably
satisfied with the results of any reasonable due diligence investigations
conducted by the Agent or the Borrower in connection with the FIMCO
Acquisition and consistent with the requirements of the FIMCO Acquisition
Documents, (4) the Agent is reasonably satisfied with financing sources (and
all terms and conditions contained in any documentation evidencing the
foregoing) used to fund such FIMCO Acquisition, (5) the aggregate purchase
price (including the assumption of any Indebtedness, leases and contingent
obligations) does not exceed $155,000,000; and (6) the Borrower has
demonstrated to the Agent compliance with Section 9.5.1(b)(ii)(1)-(4),
(6)-(7), (9) and (10), and (ii) other asset or stock acquisitions of Persons
in the same or a similar line of business as the Borrower and its
Subsidiaries (each, a "Permitted Acquisition") where (1) the Borrower has
provided the Agent with written notice of such Permitted Acquisition, which
notice shall include a reasonably detailed description of such Permitted
Acquisition and copies of all acquisition documents in connection therewith;
(2) the business to be acquired would not subject the Agent or the Banks to
any additional regulatory or third party approvals in connection with the
exercise of its
63
rights and remedies under this Credit Agreement or any other Loan Document;
(3) no contingent liabilities or liabilities will be incurred or assumed in
connection with such Permitted Acquisition which could reasonably be
expected to have a material adverse effect on the business, assets or
financial condition of the Borrower and its Subsidiaries, and any
Indebtedness incurred or assumed in connection with such Permitted
Acquisition (A) shall have been permitted to be incurred or assumed pursuant
to Section 9.1 hereof; (B) shall be secured only by Permitted Liens; and (C)
shall be on terms and conditions satisfactory to the Agent; (4) the Borrower
has provided the Agent with such other information as was reasonably
requested by the Agent; (5) after the consummation of the Permitted
Acquisition, to the extent such acquisition was a stock acquisition, either
(A) the Person so acquired is merged with and into the Borrower, with the
Borrower being the survivor of such merger or (B) to the extent such Person
is not merged with and into the Borrower, the aggregate amount of the
purchase price attributable to all such Persons acquired and not merged into
the Borrower during the term of this Credit Agreement plus the aggregate
amount of all Investments to be made in all such Persons by the Borrower or
any Subsidiary shall not exceed $20,000,000 in the aggregate; (6) the
Borrower shall take, or shall cause to be taken, all necessary action to
grant to the Agent a first priority perfected lien in all assets and stock
acquired in connection with such Permitted Acquisition, provided, however,
the Borrower or any Guarantor, as the case may be, shall only be required to
pledge 65% of the capital stock of any Foreign Subsidiary or any other
Person not incorporated or otherwise organized in the United States of
America (a "Foreign Entity"), and such Foreign Entity shall not be required
to xxxxx x xxxx on its assets to secure the Obligations of the Borrower or
any Guarantor; (7) the Borrower has demonstrated to the satisfaction of the
Agent, based on a pro forma Compliance Certificate, compliance with ss.10
hereof immediately prior to and immediately after giving effect to such
Permitted Acquisition and has demonstrated to the satisfaction of the Agent
that, immediately after giving effect to the Permitted Acquisition, the
outstanding amount of the sum of all Revolving Credit Loans, Maximum Drawing
Amount of all Letters of Credit and all Unpaid Reimbursement Obligations is
less than the Total Commitment minus $5,000,000; (8) the aggregate purchase
price for any single Permitted Acquisition (or series of related
acquisitions) shall not exceed (A) $25,000,000 to the extent the Leverage
Ratio, calculated on a pro forma basis after giving effect to such Permitted
Acquisition) is equal to or greater than 3.00:1.00 and (B) $50,000,000 to
the extent the Leverage Ratio, calculated on a pro forma basis after giving
effect to such Permitted Acquisition) is less than 3.00:1.00, and the
aggregate purchase price for all Permitted Acquisitions shall not exceed
$100,000,000 during the term of this Credit Agreement; (9) the board of
directors and the shareholders (if required by applicable law), or the
equivalent, of each of the Borrower and the Person to be acquired has
approved such merger, consolidation or acquisition and such Permitted
Acquisition is otherwise considered
64
"friendly"; and (10) the Borrower has delivered to the Agent a certificate
of the chief financial officer of the Borrower to the effect that (A) the
Borrower and its Subsidiaries, on a consolidated and consolidating basis,
will be solvent upon the consummation of the Permitted Acquisition; (B) the
pro forma Compliance Certificate fairly presents the financial condition of
the Borrower and its Subsidiaries as of the date thereof and after giving
effect to such Permitted Acquisition; and (C) no Default or Event of Default
then exists or would result after giving effect to the Permitted Acquisition
In the event any new Domestic Subsidiary is formed or acquired as a
result of or in connection with any acquisition, to the extent permitted
under the Indenture, such new Domestic Subsidiary shall, immediately upon
its creation or acquisition, execute and deliver to the Agent for the
benefit of the Agent and the Banks, an Instrument of Adherence in
substantially the form of Exhibit I hereto (an "Instrument of Adherence")
and the Loan Documents shall be amended and/or supplemented as necessary to
make the terms and conditions of the Loan Documents applicable to such
Domestic Subsidiary. Such Domestic Subsidiary shall become a Guarantor
hereunder and shall become party to the Guaranty and the Security Agreement
and shall execute and deliver to the Agent any and all other agreements,
documents, instruments and financing statements necessary to grant to the
Agent a first priority perfected lien in such Domestic Subsidiary's assets
to the extent required by the Loan Documents. The Borrower and its
Subsidiaries shall, immediately upon the creation or acquisition of such
Domestic Subsidiary, pledge all of such Domestic Subsidiary's capital stock
to the Agent for the benefit of the Agent and the Banks. In addition, the
Borrower and its Subsidiaries shall, immediately upon the creation or
acquisition of such Foreign Subsidiary, pledge 65% of such Foreign
Subsidiary's capital stock to the Agent for the benefit of the Agent and the
Banks.
9.5.2. Disposition of Assets. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to or agree to or effect
any Asset Sale or other disposition of assets, other than (a) the sale of
inventory, the sale of lease agreements, the licensing of intellectual
property and the disposition of obsolete assets, in each case in the
ordinary course of business consistent with past practices; (b) the sale or
other disposition of the DAS Business and the DPDS Business (with only such
assets as exist in each such business on the Closing Date) in an arms-length
transaction transactions for fair and reasonable value, provided that, with
respect to this clause (b), (i) no Default or Event of Default shall have
occurred and be continuing at the time of such sale and no Default or Event
of Default will exist after giving effect to such Asset Sale; (ii) at least
seventy five percent (75%) of the purchase price for such assets is received
in cash and the Net Cash Sale Proceeds from such sales are applied as
provided in Section 3.2 hereof, (iii) any promissory note or other
instrument received by the Borrower or any of its Subsidiaries in connection
with such sale is an Investment permitted by Section 9.3 hereof, and the
65
Borrower or such Subsidiary, as the case may be, has delivered such
promissory note or other instrument to the Agent to be held in pledge for
the benefit of itself and the Banks in accordance with the terms of the Loan
Documents; (iv) the Borrower shall have complied with all applicable
provisions contained in Section 4.7 of the Subordinated Indenture and in the
the Subsequent Subordinated Indenture pertaining to Asset Sales; and (v) the
Borrower shall have delivered to the Agent on the date of such sale a
certificate signed by an authorized officer of the Borrower and evidence
satisfactory to the Agent showing compliance with the provisions of clauses
(i) through (iv) of this Section 9.5.2 and (c) the sale of assets in
arms-length transactions for fair and reasonable value, provided that, with
respect to this clause (c), (i) no Default or Event of Default shall have
occurred and be continuing at the time of such sale and no Default or Event
of Default will exist after giving effect to such Asset Sale; (ii) at least
seventy five percent (75%) of the purchase price for such assets is received
in cash and the Net Cash Sale Proceeds from such sales are applied as
provided in Section 3.2 hereof, (iii) any promissory note or other
instrument received by the Borrower or any of its Subsidiaries in connection
with such sale is an Investment permitted by Section 9.3 hereof, and the
Borrower or such Subsidiary, as the case may be, has delivered such
promissory note or other instrument to the Agent to be held in pledge for
the benefit of itself and the Banks in accordance with the terms of the Loan
Documents; (iv) the aggregate value of all assets sold in any Asset Sale
(other than the sale of the DPDS Business and the DAS Business) is not more
than $25,000,000 in any fiscal year; (v) the Borrower shall have complied
with all applicable provisions contained in Section 4.7 of the Subordinated
Indenture and in the applicable provisions of the Subsequent Subordinated
Indenture pertaining to Asset Sales; and (vi) the Borrower shall have
delivered to the Agent on the date of such sale a certificate signed by an
authorized officer of the Borrower and evidence satisfactory to the Agent
showing compliance with the provisions of clauses (i) through (v) of this
Section 9.5.2.
9.6. Sale and Leaseback. The Borrower will not, and will not permit any of
its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby
the Borrower or any Subsidiary of the Borrower shall sell or transfer any
property owned by it in order then or thereafter to lease such property or lease
other property that the Borrower or any Subsidiary of the Borrower intends to
use for substantially the same purpose as the property being sold or
transferred.
9.7. Compliance with Environmental Laws. The Borrower will not, and will not
permit any of its Subsidiaries to, except to the extent that the same does not
and could not reasonably be expected to have a material adverse effect on the
business, assets or financial condition of the Borrower and its Subsidiaries,
(a) use any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances, (b) cause or permit to
be located on any of the Real Estate any underground tank or other underground
storage receptacle for Hazardous Substances, (c) generate any Hazardous
Substances on any of the Real Estate, (d) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous
66
Substances on, upon or into the Real Estate or (e) otherwise conduct any
activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law.
9.8. Subordinated Debt. The Borrower will not, and will not permit any of
its Subsidiaries to, amend, supplement or otherwise modify the terms of any of
the Subordinated Debt Documents or prepay, redeem or repurchase (or offer to
prepay, redeem or repurchase) any of the Subordinated Debt, except as expressly
permitted by Section 3.2 hereof; provided, however, so long as no Default or
Event of Default has occurred and is continuing and none would exist after
giving effect thereto, the Borrower shall be permitted to make Open Market
Purchases, to the extent permitted by each of the Subordinated Indenture and the
Subsequent Subordinated Indenture.
9.9. Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate
will
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower or any of its Subsidiaries pursuant to Section 302(f) or Section
4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to Section 307 of ERISA or Section 401(a)(29)
of the Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of
any such Plan with assets in excess of benefit liabilities.
9.10. Business Activities. The Borrower will not, and will not permit any of
its Subsidiaries to, engage directly or indirectly (whether through Subsidiaries
or
67
otherwise) in any type of business other than the businesses conducted by them
on the Closing Date and in related or similar businesses.
9.11. Fiscal Year. The Borrower will not, and will not permit any of its
Subsidiaries to, change the date of the end of its fiscal year from that set
forth in Section 7.4.1.
9.12. Transactions with Affiliates. Except as set forth on Schedule 9.12
hereto, the Borrower will not, and will not permit any of its Subsidiaries to,
engage in any transaction with any Affiliate (other than for services as
employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or personal property to or from, or otherwise requiring payments
to or from any such Affiliate or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any such Affiliate has
a substantial interest or is an officer, director, trustee or partner, on terms
more favorable to such Person than would have been obtainable on an arm's-length
basis in the ordinary course of business.
9.13. Modification of Documents and Charter. Neither the Borrower nor any of
its Subsidiaries will consent to or agree to any amendment, supplement or other
modification, or amend or permit to be amended its certificate of incorporation
or bylaws, or similar organizational documents unless such change or amendment
is immaterial and ministerial in nature and would not have any material adverse
effect on the Agent's or the Banks' rights under the Loan Documents or the
Borrower's or any of its Subsidiaries' obligations under the Loan Documents.
9.14. Upstream Limitations. Neither the Borrower nor any of its Subsidiaries
will enter into, or permit any of its Subsidiaries to enter into, any agreement,
contract or arrangement (other than the Credit Agreement and the other Loan
Documents and other than restrictions in agreements evidencing Indebtedness
permitted by Section 9.1(c) or (d) hereof) restricting the ability of any
Subsidiary to pay or make dividends or distributions in cash or kind, to make
loans, advances or other payments of whatsoever nature or to make transfers or
distributions of all or any part of its assets to the Borrower or any Guarantor.
9.15. Inconsistent Agreements. Neither the Borrower nor any of its
Subsidiaries will, nor will they permit their Subsidiaries to, enter into any
agreement containing any provision which would be violated or breached by the
performance by the Borrower or such Subsidiary of its obligations hereunder or
under any of the Loan Documents.
9.16. Senior Debt. The Borrower and its Subsidiaries will not (a) in any
manner designate (or permit to exist) any Person as the trustee representing
holders of Senior Indebtedness of the Borrower or any of its Subsidiaries for
purposes of either the Subordinated Indenture or the Subsequent Subordinated
Indenture, other than the Agent under this Credit Agreement, (b) permit any
other Indebtedness
68
(other than the Obligations hereunder) which would constitute "Senior
Indebtedness" under either the Subordinated Indenture or the Subsequent
Subordinated Indenture.
9.17. Limitations on Foreign Exchange Arrangements. The Borrower will not
and will not permit any of its Subsidiaries to enter into any interest rate
hedging or risk protection arrangements, foreign exchange risk protection
arrangements, or currency risk protection arrangements which are not in the
ordinary course of business or are for speculative purposes.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
10.1. Leverage Ratio. The Borrower will not as of the end of any fiscal
quarter ending during any period described in the table set forth below permit
the Leverage Ratio to exceed the ratio set forth opposite such period in such
table:
------------------------------------------------------------------------------
Period Ratio
------ -----
------------------------------------------------------------------------------
Closing Date - December 30, 2000 4:00:1.00
------------------------------------------------------------------------------
December 31, 2000 - December 30, 2001 3.75:1.00
------------------------------------------------------------------------------
any time thereafter 3.50:1.00
------------------------------------------------------------------------------
10.2. Interest Coverage Ratio. The Borrower will not, as of the end of any
fiscal quarter or at any time permit the ratio of EBITDA for the Reference
Period most recently ended to Consolidated Total Interest Expense for such
Reference Period to be less than 2.00:1.00.
10.3. Minimum EBITDA. The Borrower will not as of the end of any fiscal
quarter permit EBITDA for the Reference Period ending on such date to be less
than the sum of (a) $65,000,000 plus (b) eighty percent (80%) of the EBITDA
(calculated on a pro forma basis) of any Person acquired pursuant to Section
9.5.1 hereof (including the EBITDA attributable to any continued operations)
but in no event shall the minimum EBITDA for any Reference Period be greater
than the amount of the Total Commitment as in effect on such date.
10.4. Capital Expenditures. The Borrower will not make, or permit any
Subsidiary of the Borrower to make, Capital Expenditures in any fiscal year that
exceed, in the aggregate, $25,000,000 for such fiscal year; provided, however,
if actual Capital Expenditures are less than $25,000,000 for any fiscal year,
such
69
unutilized amount up to $6,250,000 may be utilized in the next succeeding fiscal
year and not in any subsequent fiscal year.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans and
of the Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent:
11.1. Loan Documents etc.
11.1.1. Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of
the Banks. Each Bank shall have received a fully executed copy of each such
document.
11.1.2. Subordinated Debt Documents. Each of the Subordinated Debt
Documents other than the Subsequent Subordinated Indenture and documents
executed in connection therewith shall have been duly executed and delivered
by the respective parties thereto, shall be in full force and effect and
shall be in form and substance satisfactory to each of the Banks. The Agent
shall have received a fully executed copy of each such document.
11.2. Certified Copies of Charter Documents. Each of the Banks shall have
received from the Borrower and each of its Subsidiaries a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation documents as in effect
on such date of certification, and (b) its by-laws as in effect on such date.
11.3. Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
11.4. Incumbency Certificate. Each of the Banks shall have received from the
Borrower and each of its Subsidiaries party to any Loan Documents an incumbency
certificate, dated as of the Closing Date, signed by a duly authorized officer
of the Borrower or such Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of each of the Borrower of such Subsidiary, each of the Loan
Documents to which the Borrower or such Subsidiary is or is to become a party;
(b) in the case of the Borrower, to make Loan Requests and Conversion Requests
and to apply for Letters of Credit; and (c) to give notices and to take other
action on its behalf under the Loan Documents.
70
11.5. Validity of Liens. The Security Documents shall be effective to create
in favor of the Agent a legal, valid and enforceable first (except for Permitted
Liens entitled to priority under applicable law) security interest in and lien
upon the Collateral. All filings, recordings, deliveries of instruments and
other actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected. The Agent shall
have received evidence thereof in form and substance satisfactory to the Agent.
11.6. Perfection Certificates and UCC Search Results. The Agent shall have
received from each of the Borrower and the Guarantors a completed and fully
executed Perfection Certificate and, as to the Borrower and all Subsidiaries,
the results of UCC searches and all applicable lien searches with respect to the
Collateral, indicating no liens other than Permitted Liens and otherwise in form
and substance satisfactory to the Agent.
11.7. Landlord Consents. The Borrower and its Subsidiaries shall have
delivered to the Agent all landlord consents as the Agent may reasonably
request.
11.8. Certificates of Insurance. The Agent shall have received a certificate
of insurance from an independent insurance broker dated as of the Closing Date,
identifying insurers, types of insurance, insurance limits, and policy terms,
and otherwise describing the insurance obtained in accordance with the
provisions of the Security Agreements.
11.9. Solvency Certificate. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and its Subsidiaries following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Banks.
11.10. Opinion of Counsel. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Cadwalader, Xxxxxxxxxx & Xxxx, counsel to the Borrower and its
Subsidiaries.
11.11. Payment of Fees. The Borrower shall have paid to the Banks or the
Agent, as appropriate, the closing fee and Agent's Fee as contemplated by the
Fee Letter.
11.12. Payoff Letter. The Agent shall have received a payoff letter from The
First National Bank of Chicago, as administrative agent, indicating the amount
of the loan obligations of the Borrower the lenders under the $80,000,000 Credit
and Guarantee Agreement dated as of February 28, 1997 to be discharged on the
Closing Date and an acknowledgment by The First National Bank of Chicago, as
administrative agent that upon receipt of such funds it will forthwith execute
and deliver to the Agent for filing all termination statements and take such
other actions as may be necessary to discharge all mortgages, deeds of trust and
security interests
71
granted by the Borrower or any of its Subsidiaries in favor of The First
National Bank of Chicago, as administrative agent.
11.13. Disbursement Instructions. The Agent shall have received disbursement
instructions from the Borrower, indicating that a portion of the proceeds of the
Revolving Credit Loans, in an amount equal to the aggregate loan obligations of
the Borrower to The First National Bank of Chicago, as Administrative Agent, are
paid to The First National Bank of Chicago, as Adminstrative Agent.
11.14. Consents and Approvals. The Agent shall have received evidence that
all consents and approvals necessary to complete the transactions contemplated
hereby have been obtained.
11.15. Designation of Agent as Trustee. The Agent shall have received
evidence that the Borrower has taken all necessary action under the Subordinated
Indenture to designate the Agent as trustee of the Senior Indebtedness for
purposes of the subordination provisions of the Subordinated Indenture.
11.16. Receipt of Audited Financial Information. The Agent shall have
received copies of the Borrower's audited financial statements for the fiscal
year ended September 30, 1997, which audited statements shall be in form and
substance satisfactory to the Agent and the Banks.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan and of the
Agent to issue, extend or renew any Letter of Credit, in each case whether on or
after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
12.1. Representations True; No Event of Default. Each of the representations
and warranties of any of the Borrower and its Subsidiaries contained in this
Credit Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Credit Agreement shall be true
as of the date as of which they were made and shall also be true at and as of
the time of the making of such Revolving Credit Loan or the issuance, extension
or renewal of such Letter of Credit, with the same effect as if made at and as
of that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
12.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of
72
any Bank would make it illegal for such Bank to make such Revolving Credit
Loan or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for the
Agent to issue, extend or renew such Letter of Credit.
12.3. Governmental Regulation. Each Bank shall have received such statements
in substance and form reasonably satisfactory to such Bank as such Bank shall
require for the purpose of compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
12.4. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
12.5. Exchange Limitations. There exists no reason whatsoever, including
without limitation, by reason of the application of any so-called "currency
exchange" laws or regulations (as in effect at the time of any proposed
borrowing hereunder) which could reasonably be expected to interfere with the
Borrower satisfying any of its Obligations hereunder in full at such time as
such Obligations become due and payable pursuant to the terms hereof.
12.6. Incurrence Test. To the extent the Total Commitment is in excess of
$80,000,000, the Borrower has demonstrated to the satisfaction of the Agent and
the Banks on a pro forma basis that after giving effect to any requested
Revolving Credit Loan or issuance of any Letter of Credit, the Borrower has
satisfied each of (a) the minimum coverage test set forth in Section 4.3(a)(ii)
of the Subordinated Indenture and (b) any other debt incurrence test set forth
in the Subsequent Subordinated Indenture.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Revolving
Credit Loans or any Reimbursement Obligation when the same shall become due
and payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Revolving Credit
Loans, the commitment fee, any Letter of Credit Fee, the Agent's fee, or
other
73
sums due hereunder or under any of the other Loan Documents within three (3)
Business Days after the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(c) the Borrower shall fail to comply with any of its covenants
contained in Section 8.1, 8.4, 8.5.1, 8.6, 8.9.1, 8.12, 8.16, 8.18, 9 or 10;
(d) the Borrower or any of its Subsidiaries shall fail to perform any
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this Section 13.1) for
thirty (30) days after written notice of such failure has been given to the
Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement, any of the other Loan Documents, any
of the Subordinated Debt Documents or in any other document or instrument
delivered pursuant to or in connection with this Credit Agreement or the
Subordinated Debt Documents shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Leases in
a principal amount in excess of $2,500,000, or fail to observe or perform
any material term, covenant or agreement contained in any agreement by which
it is bound, evidencing or securing borrowed money or credit received or in
respect of any Capitalized Leases in a principal amount in excess of
$2,500,000, for such period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Borrower or any of its Subsidiaries or of any
substantial part of the assets of the Borrower or any of its Subsidiaries or
shall commence any case or other proceeding relating to the Borrower or any
of its Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law
of any jurisdiction, now or hereafter in effect or any Insolvency Event
shall occur, or shall take any action to authorize or in furtherance of any
of the foregoing, or if any such petition or
74
application shall be filed or any such case or other proceeding shall be
commenced against the Borrower or any of its Subsidiaries and the Borrower
or any of its Subsidiaries shall indicate its approval thereof, consent
thereto or acquiescence therein or such petition or application shall not
have been dismissed within forty-five (45) days following the filing
thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of its
Subsidiaries bankrupt or insolvent, or approving a petition in any such case
or other proceeding, or a decree or order for relief is entered in respect
of the Borrower or any Subsidiary of the Borrower in an involuntary case
under federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries that, with other
outstanding final judgments, undischarged, against the Borrower or any of
its Subsidiaries exceeds in the aggregate $2,500,000;
(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or the
Subordinated Debt shall be (or shall be required at such to be) prepaid,
redeemed or repurchased in whole or in part; or the Borrower or any of its
Subsidiaries shall be or become required under the Subordinated Indenture or
the Subsequent Subordinated Indenture to prepay, redeem or repurchase (or
shall be or become required thereunder to offer to prepay, redeem or
repurchase) all or any part of the Subordinated Debt;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents, in
each case otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke
or rescind any of the Loan Documents shall be commenced by or on behalf of
the Borrower or any of its Subsidiaries party thereto or any of their
respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $2,500,000, or the Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA by
a Multiemployer Plan requiring aggregate annual payments exceeding
$2,500,000, or any of the following occurs with respect to a Guaranteed
Pension Plan: (i) an ERISA Reportable Event, or a failure to make a required
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installment or other payment (within the meaning of Section 302(f)(1) of
ERISA), provided that the Agent determines in its reasonable discretion that
such event (A) could be expected to result in liability of the Borrower or
any of its Subsidiaries to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $2,500,000 and (B) could constitute grounds for
the termination of such Guaranteed Pension Plan by the PBGC, for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan or for the imposition of a lien in
favor of such Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court of a trustee to administer such Guaranteed Pension
Plan; or (iii) the institution by the PBGC of proceedings to terminate such
Guaranteed Pension Plan;
(m) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than thirty (30)
days;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy,
or other casualty, which in any such case causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Borrower or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on the
business or financial condition of the Borrower or such Subsidiary;
(o) there shall occur the loss, suspension or revocation of, or failure
to renew, any license or permit now held or hereafter acquired by the
Borrower or any of its Subsidiaries if such loss, suspension, revocation or
failure to renew would have a material adverse effect on the business or
financial condition of the Borrower or such Subsidiary;
(p) the Borrower or any of its Subsidiaries shall be indicted for a
state or federal crime, or any civil or criminal action shall otherwise have
been brought against the Borrower or any of its Subsidiaries, a punishment
for which in any such case could include the forfeiture of any assets of the
Borrower or such Subsidiary having a fair market value in excess of
$5,000,000;
(q) a Change of Control (as such term is defined in the Subordinated
Indenture) occurs or an "Event of Default" (as such terms are defined in the
Subordinated Indenture) occurs;
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(r) a Change of Control (as such term is defined in the Subsequent
Subordinated Indenture) occurs or an "Event of Default" (as such terms are
defined in the Subsequent Subordinated Indenture) occurs;
(s) the Borrower shall at any time, legally or beneficially directly or
indirectly own less than 100% of the capital stock of each of its
Subsidiaries (other than directors' qualifying shares); or
(t) any person or group of persons (within the meaning of Section 13 or
14 of the Securities Exchange Act of 1934, as amended) other than Magten
Asset Management Corp. shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of twenty percent (20%) or more of the outstanding shares of
common stock of the Borrower; or, during any period of twelve consecutive
calendar months, individuals who were directors of the Borrower on the first
day of such period shall cease to constitute a majority of the board of
directors of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in the
event of any Event of Default specified in Sections 13.1(g), 13.1(h) or 13.1(j),
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Agent or any Bank.
13.2. Termination of Commitments. If any one or more of the Events of
Default specified in Section 13.1(g), Section 13.1(h) or Section 13.1(j) shall
occur, any unused portion of the credit hereunder shall forthwith terminate and
each of the Banks shall be relieved of all further obligations to make Revolving
Credit Loans to the Borrower and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. If any other Event of
Default shall have occurred and be continuing, or if on any Drawdown Date or
other date for issuing, extending or renewing any Letter of Credit the
conditions precedent to the making of the Revolving Credit Loans to be made on
such Drawdown Date or (as the case may be) to issuing, extending or renewing
such Letter of Credit on such other date are not satisfied, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make
Revolving Credit Loans and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. No termination of the
credit hereunder shall relieve the Borrower or any of its Subsidiaries of any of
the Obligations.
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13.3. Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to Section
13.1, each Bank, if owed any amount with respect to the Revolving Credit
Loans or the Reimbursement Obligations, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Credit
Agreement and the other Loan Documents or any instrument pursuant to which
the Obligations to such Bank are evidenced, including as permitted by
applicable law the obtaining of the ex parte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such
Bank. No remedy herein conferred upon any Bank or the Agent or the holder of
any Revolving Credit Note or purchaser of any Letter of Credit Participation
is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
any other provision of law.
13.4. Exchange Rate. If, for the purpose of obtaining judgment in any court
or obtaining an order enforcing a judgment, it becomes necessary for any Bank to
convert any amount due to such Bank under this Credit Agreement in Dollars or in
any other currency (hereinafter in this Section 13.4 called the "first
currency") into any other currency (hereinafter in this Section 13.4 called the
"second currency"), then the conversion shall be made at such Bank's spot rate
of exchange for buying the first currency with the second currency prevailing at
such Bank's close of business on the Business Day next preceding the day on
which the judgment is given or (as the case may be) the order is made. Any
payment made to any Bank pursuant to this Credit Agreement in the second
currency shall constitute a discharge of the obligations of the Borrower to pay
to such Bank any amount originally due to such Bank in the first currency under
this Credit Agreement only to the extent of the amount of the first currency
which such Bank is able, on the date of the actual receipt by it of such payment
in any second currency, to purchase, in accordance with such Bank's normal
banking procedures, with the amount of such second currency so received. If the
amount of the first currency falls short of the amount originally due to such
Bank in the first currency under this Credit Agreement, the Borrower hereby
agrees that it will indemnify such Bank against and save such Bank harmless from
any shortfall so arising. This indemnity shall constitute an obligation of the
Borrower separate and independent from the other obligations contained in this
Credit Agreement, shall give rise to a separate and independent cause of action
and shall continue in full force and effect notwithstanding any judgment or
order for a liquidated sum or sums in respect of amounts due to such Bank under
this Credit Agreement or under any such judgment or order. Any such shortfall
shall be deemed to constitute a loss suffered by such Bank and the Borrower
shall not be entitled to require any proof or evidence of any actual loss. The
covenant contained in this ss.13.4 shall survive the payment in full of all of
the other obligations of the Borrower under this Credit Agreement.
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13.5. Distribution of Collateral Proceeds. In the event that following the
occurrence or during the continuance of any Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement
of the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the
rights, remedies, powers and privileges of the Agent under this Credit
Agreement or any of the other Loan Documents or in respect of the Collateral
or in support of any provision of adequate indemnity to the Agent against
any taxes or liens which by law shall have, or may have, priority over the
rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as the
Majority Banks may determine; provided, however, that (i) distributions
shall be made (A) pari passu among Obligations with respect to the Agent's
fee payable pursuant to Section 5.2 and all other Obligations and (B) with
respect to each type of Obligation owing to the Banks, such as interest,
principal, fees and expenses, among the Banks pro rata, and (ii) the Agent
may in its discretion make proper allowance to take into account any
Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant
to Section 9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Banks to the Borrower and any securities or other property of the Borrower in
the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Revolving Credit Notes held by such
79
Bank or constituting Reimbursement Obligations owed to such Bank, such amount
shall be applied ratably to such other Indebtedness and to the Indebtedness
evidenced by all such Revolving Credit Notes held by such Bank or constituting
Reimbursement Obligations owed to such Bank, and (b) if such Bank shall receive
from the Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Revolving Credit Notes held by, or constituting Reimbursement Obligations owed
to, such Bank by proceedings against the Borrower at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Revolving Credit Note or Revolving Credit Notes held by, or Reimbursement
Obligations owed to, such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Revolving Credit
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, pro tanto assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Revolving Credit Notes held by it or Reimbursement obligations
owed it, its proportionate payment as contemplated by this Credit Agreement;
provided that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
15. THE AGENT.
15.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, provided that
no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that of
an independent contractor. The use of the term "Agent" is for convenience
only and is used to describe, as a form of convention, the independent
contractual relationship between the Agent and each of the Banks. Nothing
contained in this Credit Agreement nor the other Loan Documents shall be
construed to create an agency, trust or other fiduciary relationship between
the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder and
under the other Loan Documents, the Agent is nevertheless a "representative"
of the Banks, as that term is defined in Article 1 of the Uniform Commercial
Code, for purposes of actions for the benefit of the
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Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation of
the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
15.2. Employees and Agents. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
15.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. No Representations.
15.4.1. General. The Agent shall not be responsible for the execution
or validity or enforceability of this Credit Agreement, the Revolving Credit
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Revolving Credit Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of
any such amounts owing with respect to the Revolving Credit Notes, or for
any recitals or statements, warranties or representations made herein or in
any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of the Borrower or any of its
Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein
or in any instrument at any time constituting, or intended to constitute,
collateral security for the Revolving Credit Notes or to inspect any of the
properties, books or records of the Borrower or any of its Subsidiaries. The
Agent shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by the Borrower or any holder of any of the
Revolving Credit Notes shall have been duly authorized or is true, accurate
and complete. The Agent has not made nor does it now make any
representations or warranties,
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express or implied, nor does it assume any liability to the Banks, with
respect to the credit worthiness or financial conditions of the Borrower or
any of its Subsidiaries. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Credit Agreement.
15.4.2. Closing Documentation, etc. For purposes of determining
compliance with the conditions set forth in Section 11, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Agent or BancBoston Securities Inc.,
as arranger to such Bank for consent, approval, acceptance or satisfaction,
or required thereunder to be to be consent to or approved by or acceptable
or satisfactory to such Bank, unless an officer of the Agent or BancBoston
Securities Inc. active upon the Borrower's account shall have received
notice from such Bank not less than two (2) days prior to the Closing Date
specifying such Bank's objection thereto and such objection shall not have
been withdrawn by notice to the Agent or BancBoston Securities Inc. to such
effect on or prior to the Closing Date.
15.5. Payments.
15.5.1. Payments to Agent. A payment by the Borrower to the Agent
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
15.5.2. Distribution by Agent. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder, under
the Revolving Credit Notes or under any of the other Loan Documents might
involve it in liability, it may refrain from making distribution until its
right to make distribution shall have been adjudicated by a court of
competent jurisdiction. If a court of competent jurisdiction shall adjudge
that any amount received and distributed by the Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either repay
to the Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
15.5.3. Delinquent Banks. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (a) to make available to the Agent its pro rata share of any
Revolving Credit Loan or to purchase any Letter of Credit Participation or
(b) to comply with the provisions of Section 14 with respect to making
dispositions
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and arrangements with the other Banks, where such Bank's share of any
payment received, whether by setoff or otherwise, is in excess of its pro
rata share of such payments due and payable to all of the Banks, in each
case as, when and to the full extent required by the provisions of this
Credit Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall
be deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and all
payments due to it from the Borrower, whether on account of outstanding
Revolving Credit Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Revolving
Credit Loans and Unpaid Reimbursement Obligations. The Delinquent Bank
hereby authorizes the Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective pro rata shares of all outstanding
Revolving Credit Loans and Unpaid Reimbursement Obligations. A Delinquent
Bank shall be deemed to have satisfied in full a delinquency when and if, as
a result of application of the assigned payments to all outstanding
Revolving Credit Loans and Unpaid Reimbursement Obligations of the
nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations have
returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
15.6. Holders of Revolving Credit Notes. The Agent may deem and treat the
payee of any Revolving Credit Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
15.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has
not been reimbursed by the Borrower as required by Section 16), and
liabilities of every nature and character arising out of or related to this
Credit Agreement, the Revolving Credit Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or thereby, or
the Agent's actions taken hereunder or thereunder, except to the extent that
any of the same shall be directly caused by the Agent's willful misconduct or
gross negligence.
15.8. Agent as Bank. In its individual capacity, BKB shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Revolving Credit Loans made by it, and as the holder of any
of the Revolving Credit Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Agent.
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15.9. Resignation. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks, with the consent of the Borrower (so long as no
Default or Event of Default shall have occurred and be continuing), which
consent is not be unreasonably withheld, shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's Rating
Service. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
15.10. Notification of Defaults and Events of Default. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this Section 15.10 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.
15.11. Duties in the Case of Enforcement. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
16. EXPENSES AND INDEMNIFICATION.
16.1. Expenses. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
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the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's, any Bank's or any such
Bank's lending office or branch's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrower hereby agreeing
to indemnify the Agent and each Bank with respect thereto), (c) the reasonable
fees, expenses and disbursements of the Agent's Special Counsel or any local
counsel to the Agent incurred in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, any amendments, modifications,
approvals, consents or waivers hereto or hereunder, or the cancellation of any
Loan Document upon payment in full in cash of all of the Obligations or pursuant
to any terms of such Loan Document for providing for such cancellation, (d) the
fees, expenses and disbursements of the Agent or any of its affiliates incurred
by the Agent or such affiliate in connection with the preparation, syndication
or interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and appraisal charges; (e) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees of any Bank or the Agent, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Bank or the Agent in connection
with (i) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrower or any of its Subsidiaries or the administration
thereof after the occurrence of a Default or Event of Default and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the Agent's relationship with the Borrower or any
of its Subsidiaries pursuant to the Loan Documents and (f) all reasonable fees,
expenses and disbursements of any Bank or the Agent incurred in connection with
UCC searches, UCC filings or mortgage recordings.
16.2. Indemnification. The Borrower agrees to indemnify and hold harmless
the Agent, its affiliates and the Banks from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (a) any actual
or proposed use by the Borrower or any of its Subsidiaries of the proceeds of
any of the Revolving Credit Loans or Letters of Credit; (b) any actual or
alleged infringement of any patent, copyright, trademark, service xxxx or
similar right of the Borrower or any of its Subsidiaries comprised in the
Collateral; (c) the Borrower or any of its Subsidiaries entering into or
performing this Credit Agreement or any of the other Loan Documents; or (d) with
respect to the Borrower and its Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the presence, disposal, escape,
seepage, leakage, spillage, discharge, emission, release or threatened release
of any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances
85
(including, but not limited to, claims with respect to wrongful death,
personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor,
the Banks and the Agent and its affiliates shall be entitled to select their
own counsel and, in addition to the foregoing indemnity, the Borrower agrees
to pay promptly the reasonable fees and expenses of such counsel. If, and to
the extent that the obligations of the Borrower under this Section 16.2 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
16.3. Survival. The covenants contained in this ss.16 shall survive payment
or satisfaction in full of all other Obligations.
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
17.1. Sharing of Information with Section 20 Subsidiary. The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the Agent or such
Bank by the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Credit Agreement. Such authorization shall survive the
payment and satisfaction in full of all of Obligations.
17.2. Confidentiality. 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 their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this Section 17, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Agent or any Section 20
Subsidiary is a party, or in
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connection with the enforcement of rights or remedies hereunder or under any
other Loan Document, (g) to a Subsidiary or affiliate of such Bank as provided
in Section 17.1 or (h) to any assignee or participant (or prospective assignee
or participant) so long as such assignee or participant agrees to be bound by
the provisions of Section 19.6.
17.3. Prior Notification. Unless specifically prohibited by applicable law
or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
17.4. Other. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary
by the Borrower or any of its Subsidiaries. The obligations of each Bank
under this Section 17 shall supersede and replace the obligations of such
Bank under any confidentiality letter in respect of this financing signed and
delivered by such Bank to the Borrower prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any
interest in any of the Revolving Credit Loans or Reimbursement Obligations
from any Bank.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Revolving Credit Loans and the issuance, extension or renewal of any Letters of
Credit, as herein contemplated, and shall continue in full force and effect so
long as any Letter of Credit or any amount due under this Credit Agreement or
the Revolving Credit Notes or any of the other Loan Documents remains
outstanding or any Bank has any obligation to make any Revolving Credit Loans or
the Agent has any obligation to issue, extend or renew any Letter of Credit, and
for such further time as may be otherwise expressly specified in this Credit
Agreement. All statements contained in any certificate or other paper delivered
to any Bank or the Agent at any time by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION; ACCESSION.
19.1. Conditions to Assignment and Accession.
19.1.1. Assignment by Banks. Except as provided herein, each Bank may
assign to one or more Eligible Assignees all or a portion of its interests,
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rights and obligations under this Credit Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it, the Revolving Credit
Notes held by it and its participating interest in the risk relating to any
Letters of Credit); provided that (a) each of the Agent and, unless a
Default or Event of Default shall have occurred and be continuing, the
Borrower shall have given its prior written consent to such assignment,
which consent, in the case of the Agent and the Borrower, will not be
unreasonably withheld, (b) each such assignment shall be of a constant, and
not a varying, percentage of all the assigning Bank's rights and obligations
under this Credit Agreement, (c) each assignment shall be in an amount that
is a whole multiple of $5,000,000 and (d) the parties to such assignment
shall execute and deliver to the Agent, for recording in the Register (as
hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit D hereto (an "Assignment and Acceptance"), together with any
Revolving Credit Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, (i) the
assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Bank
hereunder, and (ii) the assigning Bank shall, to the extent provided in such
assignment and upon payment to the Agent of the registration fee referred to
in Sections 19.3, be released from its obligations under this Credit
Agreement.
19.1.2. Accession. Except as otherwise provided herein, Eligible
Assignees (each such Eligible Assignee, an "Acceding Bank") may, at the
request of the Borrower and with the consent of the Agent and the Majority
Banks, become party to this Credit Agreement by entering into an Instrument
of Accession in substantially the form of Exhibit E hereto (an "Instrument
of Accession") with the Borrower, the Majority Banks and the Agent and
assuming thereunder a Commitment, in an amount to be agreed upon by the
Borrower, such Acceding Bank, the Majority Banks and the Agent, to make
Revolving Credit Loans and participate in the risk relating to the Letters
of Credit pursuant to the terms hereof, and the Total Commitment shall
thereupon be increased by an amount of such Acceding Bank's Commitment;
provided, however, that (a) the Agent and the Majority Banks shall have
given its prior written consent to such accession; (b) the Borrower shall
have offered to each Bank, through the Agent, the initial right to increase
such Bank's Commitment by its pro rata share prior to granting such right to
another Bank or an Eligible Assignee all on the terms set forth below; (c)
in no event shall the Total Commitment be increased under any one or more of
such Instruments of Accession so as to exceed, in the aggregate,
$120,000,000; (d) no Default or Event of Default has occurred and is
continuing hereunder or would exist as a result of such an accession and
increase in the Total Commitment, and no default or event of default exists
under any other
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material agreement, instrument or document to which the Borrower or any
Subsidiary is a party, or would exist as a result of such an accession; and
(e) the Borrower shall have demonstrated to the satisfaction of the Agent
and the Majority Banks that the Total Commitment, as increased pursuant to
such accession, will be permitted under Section 4.3 of the Subordinated
Indenture and under the applicable provisions of the Subsequent Subordinated
Indenture and will constitute "Senior Indebtedness" as such term is defined
in each of the Subordinated Indenture and the Subsequent Subordinated
Indenture, and the Borrower shall have delivered to the Agent and the Banks,
if requested, a legal opinion satisfactory in form and substance to the
Agent, to the effect that the Indebtedness of the Borrower and its
Subsidiaries to the Agent and the Banks in respect of the Revolving Credit
Loan sand Reimbursement Obligations constitutes "Senior Indebtedness" under
the terms of each of the Subordinated Debt Documents (subject to such
assumptions and qualifications as may be satisfactory to the Agent). At such
time as the Borrower elects to increase the Total Commitment pursuant to
this Section 19.1.2, the Borrower shall provide the Agent with a written
notice of the amount by which it requests such an increase and the Agent
shall forthwith provide such notice to each Bank. Each Bank shall provide
the Agent with written notice, within three (3) Business Days of having
received such offer, of its decision (and with no response being deemed a
refusal by such Bank of such offer) as to whether to increase its
Commitment, and by the amount such Bank is offering to increase its
Commitment. The requested increase amount shall be allocated ratably among
the Banks electing to increase their Commitments, with any unallocated
portion, if any, then no longer being subject to any rights and first
refusal and being capable of being assumed by an Eligible Assignee. On the
effective date specified in any Instrument of Accession, Schedule 1 hereto
shall be deemed to be amended to reflect (a) the name, address, Commitment
and Commitment Percentage of such Acceding Bank, (b) the total Commitment as
increased by such Acceding Bank's Commitment, and (c) the changes to the
other Banks' respective Commitment Percentages and any changes to the other
Banks' respective Commitments (in the event such Bank is also the Acceding
Bank) resulting from such assumption and such increased Total Commitment.
19.2. Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Acceptance or Instrument of
Accession, as the case may be, the parties to the assignment thereunder confirm
to and agree with each other and the other parties hereto as follows:
(a) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of
any adverse claim, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
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genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or mortgage,
(b) the assigning Bank makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower
and its Subsidiaries or any other Person primarily or secondarily liable in
respect of any of the Obligations, or the performance or observance by the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations of any of their obligations
under this Credit Agreement or any of the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto;
(c) such assignee or Acceding Bank, as the case may be, confirms that
it has received a copy of this Credit Agreement, together with copies of the
most recent financial statements referred to in Section 7.4 and Section 8.4
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 or Instrument of Accession, as the case may be;
(d) such assignee or Acceding Bank, as the case may be, will,
independently and without reliance upon the assigning Bank, 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 decisions in taking
or not taking action under this Credit Agreement;
(e) such assignee or Acceding Bank, as the case may be, represents and
warrants that it is an Eligible Assignee;
(f) such assignee or Acceding Bank, as the case may be, appoints and
authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Credit 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;
(g) such assignee or Acceding Bank, as the case may be, agrees that it
will perform in accordance with their terms all of the obligations that by
the terms of this Credit Agreement are required to be performed by it as a
Bank;
(h) such assignee or Acceding Bank, as the case may be, represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance or Instrument of Accession, as the case may be; and
(i) such assignee acknowledges that it has made arrangements with the
assigning Bank satisfactory to such assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.
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19.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance and Instrument of Accession delivered to it and a register or similar
list (the "Register") for the recordation of the names and addresses of the
Banks and the Commitment Percentage of, and principal amount of the Revolving
Credit Loans owing to and Letter of Credit Participations purchased by, the
Banks from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $3,500.00.
19.4. New Revolving Credit Notes. Upon its receipt of an Assignment and
Acceptance or Instrument of Accession, as the case may be, executed by the
parties to such assignment, together with each Revolving Credit Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Revolving Credit Note, a new Revolving
Credit Note to the order of such Eligible Assignee or Acceding Bank, as the case
may be, in an amount equal to the amount assumed by such Eligible Assignee or
Acceding Bank, as the case may be, pursuant to such Assignment and Acceptance or
Instrument of Accession and, if the assigning Bank has retained some portion of
its obligations hereunder, a new Revolving Credit Note to the order of the
assigning Bank in an amount equal to the amount retained by it hereunder. Such
new Revolving Credit Notes shall provide that they are replacements for the
surrendered Revolving Credit Notes, shall be in an aggregate principal amount
equal to the aggregate principal amount of the surrendered Revolving Credit
Notes, shall be dated the effective date of such in Assignment and Acceptance
and shall otherwise be substantially the form of the assigned Revolving Credit
Notes. The surrendered Revolving Credit Notes shall be cancelled and returned to
the Borrower.
19.5. Participations. Each Bank may sell participations to one or more banks
or other entities in all or a portion of such Bank's rights and obligations
under this Credit Agreement and the other Loan Documents; provided that (a) each
such participation shall be in an amount of not less than $1,000,000, (b) any
such sale or participation shall not affect the rights and duties of the selling
Bank hereunder to the Borrower and (c) the only rights granted to the
participant pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal of or the
interest rate on any Revolving Credit Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment
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fees or Letter of Credit Fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest.
19.6. Disclosure. The Borrower agrees that in addition to disclosures made
in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge other than as a result of a
breach of any confidentiality obligation of any Person, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
19.7. Assignee or Participant Affiliated with the Borrower. If any
assignee Bank or Acceding Bank is an Affiliate of the Borrower, then any such
assignee Bank or Acceding Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or other
modifications to any of the Loan Documents or for purposes of making requests
to the Agent pursuant to Section 13.1 or Section 13.2, and the determination
of the Majority Banks shall for all purposes of this Credit Agreement and the
other Loan Documents be made without regard to such assignee Bank's or
Acceding Bank's interest in any of the Revolving Credit Loans or
Reimbursement Obligations. If any Bank sells a participating interest in any
of the Revolving Credit Loans or Reimbursement Obligations to a participant,
and such participant is the Borrower or an Affiliate of the Borrower, then
such transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or
modifications to any of the Loan Documents or for purposes of making requests
to the Agent pursuant to Section 13.1 or Section 13.2 to the extent that such
participation is beneficially owned by the Borrower or any Affiliate of the
Borrower, and the determination of the Majority Banks shall for all purposes
of this Credit Agreement and the other Loan Documents be made without regard
to the interest of such transferor Bank in the Revolving Credit Loans or
Reimbursement Obligations to the extent of such participation.
19.8. Miscellaneous Assignment Provisions. Any assigning Bank shall retain
its rights to be indemnified pursuant to ss.16 with respect to any claims or
actions arising prior to the date of such assignment. If any assignee Bank or
Acceding Bank is not incorporated under the laws of the United States of America
or any state thereof, it shall, prior to the date on which any interest or fees
are payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification in form and substance
reasonably satisfactory to the Borrower as to its full exemption from deduction
or
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withholding of any United States federal income taxes. If the Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this Section 19 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Revolving Credit Notes) to any of the twelve Federal Reserve Banks organized
under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
19.9. Assignment by Borrower. The Borrower shall not assign or transfer any
of its rights or obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all notices
and other communications made or required to be given pursuant to this Credit
Agreement or the Revolving Credit Notes or any Letter of Credit Applications
shall be in writing and shall be delivered in hand, mailed by United States
registered or certified first class mail, postage prepaid, sent by overnight
courier, or sent by telegraph, telecopy, facsimile or telex and confirmed by
delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at 00000 Xxxxxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx
00000, Attention: Chief Financial Officer, or at such other address for
notice as the Borrower shall last have furnished in writing to the Person
giving the notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, XXX, Attention: Xxx X. Massimo, Director, or such other address for
notice as the Agent shall last have furnished in writing to the Person
giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(b) if sent by registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.
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21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN Section 20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Section 26.
25. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to any
action or claim arising out of any dispute in connection with this Credit
Agreement, the Revolving Credit Notes or any of the other Loan Documents, any
rights or obligations hereunder or thereunder or the performance of which rights
and
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obligations. Except as prohibited by law, the Borrower hereby waives any
right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement,
the other Loan Documents or any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower or
any of its Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event
of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written
consent of the Borrower and the written consent of the Majority Banks.
Notwithstanding the foregoing, a decrease in the rate of interest on the
Revolving Credit Notes (other than interest accruing pursuant to Section
5.11.2 following the effective date of any waiver by the Majority Banks of
the Default or Event of Default relating thereto), the amount of the
Commitments of the Banks (other than changes which are contemplated and
permitted by Section 19.1.2 hereof), and the amount of commitment fee or
Letter of Credit Fees hereunder may not be changed without the written
consent of the Borrower and the written consent of each Bank affected
thereby; the Revolving Credit Loan Maturity Date may not be postponed without
the written consent of each Bank affected thereby; this Section 26 and the
definition of Majority Banks may not be amended, without the written consent
of all of the Banks; and the amount of the Agent's Fee or any Letter of
Credit Fees payable for the Agent's account and Section 15 may not be amended
without the written consent of the Agent. No waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent thereon.
No course of dealing or delay or omission on the part of the Agent or any
Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall
entitle the Borrower to other or further notice or demand in similar or other
circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect
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such clause or provision in any other jurisdiction, or any other clause or
provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement
as a sealed instrument as of the date first set forth above.
ANACOMP, INC.
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Assistant Treasurer
BANKBOSTON, N.A., individually and as Agent
By: /s/ Xxx X. Massimo
-----------------------------------------
Name: Xxx X. Massimo
Title: Director
