EXHIBIT 10.2
________________________________________________________________________________
DETAILS HOLDINGS, INC.
DETAILS, INC.
__________________________________
CREDIT AGREEMENT
________________
dated as of
October 28, 1997
and
as Amended and Restated as of December 5, 1997
__________________________________
THE CHASE MANHATTAN BANK,
as Documentation, Syndication and Administrative Agent
____________________________
CHASE SECURITIES INC.,
as Arranger
[LOGO OF CHASE APPEARS HERE]
________________________________________________________________________________
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS..................................................... 1
1.1 Defined Terms..................................................... 1
1.2 Other Definitional Provisions.....................................21
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.................................22
2.1 Term Loan Commitments.............................................22
2.2 Procedure for Term Loan Borrowing.................................22
2.3 Repayment of Term Loans...........................................23
2.4 Revolving Credit Commitments......................................24
2.5 Procedure for Revolving Credit Borrowing..........................24
2.6 Swing Line Commitment.............................................25
2.7 Procedure for Swing Line Borrowing;
Refunding of Swing Line Loans....................................25
2.8 Commitment Fees, etc..............................................27
2.9 Termination or Reduction of Commitments...........................27
2.10 Optional Prepayments..............................................27
2.11 Mandatory Prepayments and Commitment
Reductions.......................................................28
2.12 Conversion and Continuation Options...............................29
2.13 Minimum Amounts and Maximum Number of.............................30
Eurodollar Tranches...................... ......................30
2.14 Interest Rates and Payment Dates..................................30
2.15 Computation of Interest and Fees..................................31
2.16 Inability to Determine Interest Rate..............................31
2.17 Pro Rata Treatment and Payments...................................33
2.18 Requirements of Law...............................................34
2.19 Taxes.............................................................35
2.20 Indemnity
2.21 Change of Lending Office..........................................36
2.22 Replacement of Lenders under Certain
Circumstances....................................................36
SECTION 3. LETTERS OF CREDIT...............................................36
3.1 L/C Commitment....................................................36
3.2 Procedure for Issuance of Letter of Credit........................37
3.3 Commissions, Fees and Other Charges...............................37
3.4 L/C Participations................................................37
3.5 Reimbursement Obligation of the Borrower..........................38
3.6 Obligations Absolute..............................................39
3.7 Letter of Credit Payments.........................................39
3.8 Applications......................................................39
SECTION 4. REPRESENTATIONS AND WARRANTIES..................................39
4.1 Financial Condition...............................................39
4.2 No Change.........................................................40
4.3 Corporate Existence; Compliance with Law..........................40
4.4 Corporate Power; Authorization; Enforceable
Obligations......................................................41
4.5 No Legal Bar......................................................41
4.6 No Material Litigation............................................41
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4.7 No Default......................................................41
4.8 Ownership of Property; Liens....................................41
4.9 Intellectual Property...........................................42
4.10 Taxes...........................................................42
4.11 Federal Regulations.............................................42
4.12 Labor Matters...................................................42
4.13 ERISA...........................................................42
4.14 Investment Company Act; Other Regulations.......................43
4.15 Subsidiaries....................................................43
4.16 Use of Proceeds.................................................43
4.17 Environmental Matters...........................................43
4.18 Accuracy of Information, etc....................................44
4.19 Security Documents..............................................45
4.20 Solvency........................................................45
4.21 Senior Indebtedness.............................................45
SECTION 5. CONDITIONS PRECEDENT...........................................45
5.1 Conditions to Initial Extension of Credit........................45
5.2 Conditions to Each Extension of Credit...........................48
SECTION 6. AFFIRMATIVE COVENANTS..........................................48
6.1 Financial Statements.............................................48
6.2 Certificates; Other Information..................................49
6.3 Payment of Obligations...........................................50
6.4 Conduct of Business and Maintenance of
Existence, etc..................................................51
6.5 Maintenance of Property; Insurance...............................51
6.6 Inspection of Property; Books and Records;
Discussions.....................................................51
6.7 Notices..........................................................51
6.8 Environmental Laws...............................................52
6.9 Interest Rate Protection.........................................52
6.10 Additional Collateral, etc.......................................52
SECTION 7. NEGATIVE COVENANTS.............................................53
7.1 Financial Condition Covenants....................................54
7.2 Limitation on Indebtedness.......................................55
7.3 Limitation on Liens..............................................56
7.4 Limitation on Fundamental Changes................................57
7.5 Limitation on Sale of Assets.....................................57
7.6 Limitation on Dividends..........................................58
7.7 Limitation on Capital Expenditures...............................58
7.8 Limitation on Investments, Loans and Advances....................59
7.9 Limitation on Optional Payments and Modifications of Debt
Instruments, etc................................................60
7.10 Limitation on Transactions with Affiliates.......................60
7.11 Limitation on Sales and Leasebacks...............................61
7.12 Limitation on Changes in Fiscal Periods..........................61
7.13 Limitation on Negative Pledge Clauses............................61
7.14 Limitation on Restrictions on Subsidiary Distributions...........62
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7.15 Limitation on Lines of Business................................. 62
7.16 Limitation on Amendments to Transaction Documents............... 62
7.17 Limitation on Activities of the Company......................... 62
SECTION 8. EVENTS OF DEFAULT.............................................. 62
SECTION 9. THE ADMINISTRATIVE AGENT....................................... 66
9.1 Appointment...................................................... 66
9.2 Delegation of Duties............................................. 66
9.3 Exculpatory Provisions........................................... 66
9.4 Reliance by Administrative Agent................................. 66
9.5 Notice of Default................................................ 67
9.6 Non-Reliance on Agents and Other Lenders......................... 67
9.7 Indemnification.................................................. 67
9.8 Administrative Agent in Its Individual Capacity................... 68
9.9 Successor Administrative Agent................................... 68
9.10 Authorization to Release Liens................................... 69
SECTION 10. MISCELLANEOUS................................................. 69
10.1 Amendments and Waivers.......................................... 69
10.2 Notices......................................................... 69
10.3 No Waiver; Cumulative Remedies.................................. 70
10.4 Survival of Representations and Warranties...................... 70
10.5 Payment of Expenses and Taxes................................... 71
10.6 Successors and Assigns; Participations and Assignments.......... 71
10.7 Adjustments; Set-off............................................ 74
10.8 Counterparts.................................................... 75
10.9 Severability.................................................... 75
10.10 Integration..................................................... 75
10.11 GOVERNING LAW................................................... 75
10.12 Submission To Jurisdiction; Waivers............................. 75
10.13 Acknowledgements................................................ 76
10.14 WAIVERS OF JURY TRIAL........................................... 76
10.15 Confidentiality................................................. 76
SCHEDULES
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Schedule 1.1 Commitments
Schedule 4.4 Consents, Authorizations, Filings and Notices
Schedule 4.10 Taxes
Schedule 4.15 Subsidiaries
Schedule 4.19(a) UCC Filing Jurisdictions
Schedule 7.2(e) Existing Indebtedness
Schedule 7.3(e) Existing Liens
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EXHIBITS
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Exhibit A Form of Guarantee and Collateral Agreement
Exhibit B Form of Compliance Certificate
Exhibit C Form of Closing Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Legal Opinion of Ropes & Xxxx
Exhibit F-1 Form of Term Note
Exhibit F-2 Form of Revolving Credit Note
Exhibit F-3 Form of Alternative Term Note
Exhibit F-4 Form of Alternative Revolving Credit Note
Exhibit F-5 Form of Swing Line Note
Exhibit G Form of Prepayment Option Notice
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CREDIT AGREEMENT, dated as of October 28, 1997 (and as amended and
restated as of December 5, 1997), among DETAILS HOLDINGS, INC., (formerly known
as Details, Inc.), a California corporation (the "Company"), DETAILS, INC., a
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California corporation (the "Borrower"), the several banks and other financial
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institutions or entities from time to time parties to this Agreement (the
"Lenders"), and THE CHASE MANHATTAN BANK, as documentation, syndication and
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administrative agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the terms listed in
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this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
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to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the rate of interest per
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annum publicly announced from time to time by the Administrative Agent as its
prime rate in effect at its principal office in New York City (the Prime Rate
not being intended to be the lowest rate of interest charged by the
Administrative Agent in connection with extensions of credit to debtors); and
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
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the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. Any change in the ABR due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.
"ABR Loans": Loans the rate of interest applicable to which is based
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upon the ABR.
"Accepting Lenders": as defined in Section 2.17(d).
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"Acquisition Term Loan": as defined in Section 2.1.
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"Acquisition Term Loan Commitment": as to any Lender, the obligation
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of such Lender, if any, to make an Acquisition Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under the
heading "Acquisition Term Loan Commitment" opposite such Lender's name on
Schedule 1.1.
"Acquisition Term Loan Lender": each Lender which has an Acquisition
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Term Loan Commitment or which has made an Acquisition Term Loan.
"Acquisition Term Loan Percentage": as to any Acquisition Term Loan
--------------------------------
Lender at any time, the percentage which such Lender's Acquisition Term Loan
Commitment then constitutes of the aggregate Acquisition Term Loan Commitments
(or, at any time after the
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Closing Date, the percentage which the aggregate principal amount of such
Lender's Acquisition Term Loans then outstanding constitutes of the aggregate
principal amount of the Acquisition Term Loans then outstanding).
"Adjustment Date": as defined in the Pricing Grid.
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"Administrative Agent": The Chase Manhattan Bank, together with its
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affiliates, as the arranger of the Commitments and as the documentation,
syndication and administrative agent for the Lenders under this Agreement and
the other Loan Documents, together with any of its successors.
"Affiliate": as to any Person, any other Person which, directly or
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indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise. In addition, for the purpose of this Agreement, an Affiliate of Xxxx
Capital shall include any Bain Investor or any investment fund under common
control with the Bain Investors. Notwithstanding the foregoing, none of the
Lenders or any of their respective affiliates shall be deemed to be Affiliates
of the Company or its Subsidiaries.
"Agreement": this Credit Agreement, as amended, supplemented or
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otherwise modified from time to time.
"Alternative Note": as defined in Section 10.6(f)(ii).
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"Alternative Noteholder": as defined in Section 10.6(f)(ii).
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"Applicable Margin": for each Type of Loan, the rate per annum set
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forth under the relevant column heading below:
Eurodollar
ABR Loans Loans
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Revolving Credit Loans and
Swing Line Loans 1.50% 2.50%
Tranche A Term Loans and
Acquisition Term Loans 1.50% 2.50%
Tranche B Term Loans 1.75% 2.75%
; provided, that on and after the first Adjustment Date occurring after the
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completion of four full fiscal quarters of the Borrower after the Closing Date,
the Applicable Margin with respect to Revolving Credit Loans, the Swing Line
Loans, the Acquisition Term Loans and Tranche A Term Loans will be determined
pursuant to the Pricing Grid.
"Application": an application, in such form as the Issuing Lender may
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specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"Approved Fund": with respect to any Lender that is a fund that
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invests in commercial loans, any other fund that invests in commercial loans and
is managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
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"Asset Sale": any Disposition of Property or series of related
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Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (e) of Section 7.5) which yields gross proceeds to the
Company or any of its Subsidiaries (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt
securities and valued at fair market value in the case of other non-cash
proceeds) in excess of $500,000.
"Assignee": as defined in Section 10.6(c).
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"Assignor": as defined in Section 10.6(c).
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"Available Revolving Credit Commitment": as to any Revolving Credit
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Lender at any time, an amount equal to the excess, if any, of (a) such Lender's
Revolving Credit Commitment over (b) such Lender's Revolving Extensions of
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Credit.
"Bain Affiliates": any Bain Investor or Affiliate of Xxxx Capital,
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provided that, for purposes of the definition of "Change of Control", the term
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Bain Affiliate shall not include (x) any portfolio company of either Xxxx
Capital or any Affiliate of Xxxx Capital or (y) any officer or director of the
Company or any of its Subsidiaries that is not also a partner, principal or
stockholder of Xxxx Capital.
"Xxxx Capital": Xxxx Capital, Inc., a Delaware corporation.
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"Bain Investor": Xxxx Capital Fund V, L.P., Xxxx Capital Fund V-B,
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L.P., BCIP Associates, BCIP Trust Associates, L.P and RGIP, LLC.
"Base CapEx Amount": as defined in Section 7.7.
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"Board": the Board of Governors of the Federal Reserve System of the
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United States (or any successor).
"Borrower": as defined in the preamble.
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"Borrowing Date": any Business Day specified by the Borrower as a
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date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"Business": as defined in Section 4.17.
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"Business Day": (i) for all purposes other than as covered by cause
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(ii) below, a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in Dollar deposits in the interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
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the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
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"Capital Lease Obligations": as to any Person, the obligations of
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such Person under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which are required to be
classified and accounted for as capital leases on a balance sheet of such Person
under GAAP and, for the purposes of this Agreement, the amount of such
obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or
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other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
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unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws of the
United States of America or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-2 by Standard & Poor's Ratings Services or P-2 by Xxxxx'x Investors
Service, Inc., or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings
of commercial paper issuers generally, and maturing within one year from the
date of acquisition; (d) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, rated at least A-2 by
Standard & Poor's Ratings Services or P-2 by Xxxxx'x Investors Service, Inc.;
and (e) investments in money market funds substantially all the assets of which
are comprised of securities of the types described in clauses (a) through (d)
above.
"Change of Control": any of the following events:
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(a) prior to the date of an initial registered public offering by the Company
of its common stock, (i) Xxxx Capital and Bain Affiliates shall cease to
own (on a fully diluted basis) at least 20% of the economic and voting
interests in the Capital Stock of the Company or (ii) the Permitted Holders
shall cease to "control" (as such term is defined in Rule 405 promulgated
under the Securities Act of 1933, as amended) the Company; or
(b) from and after the date of an initial registered public offering by the
Company of its common stock, (i) any Person or "group" (within the meaning
of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in
effect on the Closing Date) shall own a greater percentage of the voting
and/or economic interest in the Capital Stock of the Company than that
owned by Xxxx Capital and/or the Bain Affiliates or (ii) the Board of
Directors of the Company shall cease to consist of a majority of Continuing
Directors.
"Closing Date": the date on which the conditions precedent set forth
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in Section 5.1 shall have been satisfied, which date shall be no later than
December 31, 1997.
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"Code": the Internal Revenue Code of 1986, as amended from time to
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time.
"Collateral": all Property of the Loan Parties, now owned or
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hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"Commitment": as to any Lender, the sum of the Tranche A Term Loan
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Commitment, the Tranche B Term Loan Commitment, the Acquisition Term Loan
Commitment and the Revolving Credit Commitment of such Lender.
"Commitment Fee Rate": 1/2 of 1% per annum; provided, that on and
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after the first Adjustment Date occurring after the completion of four full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not incorporated,
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which is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group which includes the Borrower and which is
treated as a single employer under Section 414 of the Code.
"Company": as defined in the preamble.
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"Company Indenture": the Indenture entered into by the Company in
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connection with the issuance of the Company Zeros, together with all instruments
and other agreements entered into by the Company or any of its Subsidiaries in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9.
"Company Interim Credit Facility": the Company Interim Credit
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Facility, dated as of October 28, 1997, among the Company, The Chase Manhattan
Bank, as administrative agent, and the other lenders from time to time party
thereto, together with all documents executed in connection therewith
(including, without limitation, any Exchange Notes issued pursuant thereto).
"Company Zeros": the senior unsecured discount notes of the Company
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issued pursuant to the Company Indenture.
"Compliance Certificate": a certificate duly executed by a
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Responsible Officer substantially in the form of Exhibit B.
"Confidential Information Memorandum": the Confidential Information
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Memorandum dated October 1997 prepared by the Company with respect to the
issuance of the Company Interim Credit Facility.
"Consolidated Current Assets": at a particular date, all amounts
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(other than cash and Cash Equivalents) which would, in conformity with GAAP, be
set forth opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"Consolidated Current Liabilities": at a particular date, all amounts
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which would, in conformity with GAAP, be set forth opposite the caption "total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at
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such date, but excluding (a) the current portion of any Funded Debt of the
Borrower and its Subsidiaries and (b) without duplication of clause (a) above,
all Indebtedness consisting of Revolving Credit Loans to the extent otherwise
included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
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such period plus, (a) without duplication and to the extent reflected as a
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charge in the statement of such Consolidated Net Income for such period, the sum
of (i) total income tax expense, (ii) total interest expense, amortization or
writeoff of debt discount and debt issuance costs and commissions, discounts and
other fees and charges associated with Indebtedness (including the Loans), (iii)
depreciation and amortization expense, (iv) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, (v) any
extraordinary or non-recurring expenses or losses (including, whether or not
otherwise includable as a separate item in the statement of such Consolidated
Net Income for such period, losses on sales of assets outside of the ordinary
course of business), (vi) charges for the write-off of any step-up in basis in
inventory required in a transaction which is accounted for under the purchase
method of accounting, (vii) any other non-cash charges and (viii) all management
fees paid to Xxxx Capital and the Xxxx Affiliates permitted by Section 7.10,
minus, (b) to the extent included in the statement of such Consolidated Net
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Income for such period, the sum of (i) interest income, (ii) any extraordinary
or non-recurring income or gains (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of business)
and (iii) any other non-cash income (other than non-cash income resulting from
the Company's accrual method of accounting in accordance with past practice).
Notwithstanding the foregoing, there shall be added to Consolidated EBITDA on a
pro forma basis for purposes of computing the financial covenants for any period
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set forth in Section 7.1 (i) the amount of compensation and other payments paid
to Xxxxx X. Xxxxxxx (not to exceed $2,400,000) which were deducted in computing
Consolidated Net Income for such period and (ii) the expenses deducted in
computing Consolidated Net Income for such period which were associated with the
vesting and exercise by existing management of the Company of options on the
Capital Stock of the Company on or prior to the Closing Date and the bonuses
paid to such existing management pursuant to Section 1.11 of the Transaction
Agreement.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
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of (a) the total of (i) Consolidated EBITDA for such period less (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in cash
during such period on account of Capital Expenditures (excluding the principal
amount of Indebtedness incurred in connection with such expenditures and any
Capital Expenditures financed with Reinvestment Deferred Amounts) less (iii) any
provision for cash income taxes made by the Borrower and its Subsidiaries on a
consolidated basis in respect of such period to (b) Consolidated Fixed Charges
for such period.
"Consolidated Fixed Charges": for any period, the sum (without
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duplication) of (a) Consolidated Interest Expense for such period and (b)
scheduled payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries (including the Term
Loans).
"Consolidated Interest Coverage Ratio": for any period, the ratio of
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(a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period; provided that, for purposes of determining such ratio at a time
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when less than four full fiscal quarters of the Company have begun after and
fully elapsed since the Closing Date, (x) Consolidated EBITDA for the relevant
period shall be deemed to be the sum of (i) the
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aggregate Consolidated EBITDA of the Company for those fiscal quarters which
have begun after and fully elapsed since the Closing Date and (ii) the aggregate
Consolidated EBITDA (determined on a pro forma basis, as if the Transaction had
occurred on the first day of such period) of the Company for the requisite
number of consecutive fiscal quarters commencing prior to the Closing Date and
(y) Consolidated Interest Expense shall be determined by annualizing the
Consolidated Interest Expense of the Company for those fiscal quarters which
have begun after and fully elapsed since the Closing Date.
"Consolidated Interest Expense": for any period, all cash interest
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expense (including that attributable to Capital Lease Obligations) of the
Company and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Company and its Subsidiaries (including, without limitation,
all commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers' acceptance financing and net costs under Interest
Rate Protection Agreements to the extent such net costs are allocable to such
period in accordance with GAAP).
"Consolidated Leverage Ratio": as at the last day of any period, the
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ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA for
such period; provided that, for purposes of determining such ratio at a time
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when less than four full fiscal quarters of the Company have begun after and
fully elapsed since the Closing Date, Consolidated EBITDA for the relevant
period shall be deemed to be the sum of (x) the aggregate Consolidated EBITDA of
the Company for those fiscal quarters which have begun after and fully elapsed
since the Closing Date and (y) the aggregate Consolidated EBITDA (determined on
a pro forma basis, as if the Transaction had occurred on the first day of such
period) of the Company for the requisite number of consecutive fiscal quarters
commencing prior to the Closing Date.
"Consolidated Net Income": for any period, the consolidated net
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income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that there shall be
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excluded therefrom (a) the income (or deficit) of any Person accrued prior to
the date it becomes a Subsidiary of the Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary of the Borrower) in which the
Borrower or any of its Subsidiaries has an ownership interest, except to the
extent that any such income is actually received by the Borrower or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of the Borrower to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary.
"Consolidated Total Debt": at any date, the aggregate principal
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amount of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital": the excess of Consolidated Current
----------------------------
Assets over Consolidated Current Liabilities.
"Continuing Directors": the directors of the Company on the Closing
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Date and each other director if such director's nomination for the election to
the Board of Directors of the Company is recommended by a majority of the then
Continuing Directors.
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"Contractual Obligation": as to any Person, any provision of any
----------------------
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
"Default": any of the events specified in Section 8, whether or not
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any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Designated Equity Amounts": at any date, the amount equal to the
-------------------------
aggregate amount of Net Cash Proceeds received by the Company and its
Subsidiaries from the issuance of Capital Stock which (a) have been designated
in writing by the Company to the Administrative Agent as "Permitted Expenditure
Amounts" and (b) are utilized by the Company and its Subsidiaries within 45 days
after such receipt for an Expenditure Use Amount.
"DI Acquisition": DI Acquisition Corp., a California corporation.
--------------
"Disposition": with respect to any Property, any sale, lease, sale
-----------
and leaseback, assignment, conveyance, transfer or other disposition thereof;
and the terms "Dispose" and "Disposed of" shall have correlative meanings.
------- -----------
"Dollars" and "$": dollars in lawful currency of the United States of
------- -
America.
"Domestic Subsidiary": any Subsidiary of the Borrower organized under
-------------------
the laws of any jurisdiction within the United States of America.
"ECF Percentage": 75%; provided, that, with respect to each fiscal
-------------- --------
year of the Borrower ending on or after December 31, 1998, the ECF Percentage
shall be reduced to 50% if the Consolidated Interest Coverage Ratio for the
period of four consecutive fiscal quarters ending on the last day of such fiscal
year is at least 2.5 to 1.0 and the Consolidated Leverage Ratio as of the last
day of such fiscal year is not greater than 4.0 to 1.0.
"Environmental Laws": any and all foreign, Federal, state, local or
------------------
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
--------------------
Period pertaining to a Eurodollar Loan, the rate per annum determined by the
Administrative Agent
9
to be the offered rate for deposits in Dollars with a term comparable to such
Interest Period that appears on the applicable Telerate Page at approximately
10:00 A.M., New York City time, two Business Days prior to the beginning of such
Interest Period; provided, however, that if at any time for any reason such
-------- -------
offered rate does not appear on the applicable Telerate Page, "Eurodollar Base
Rate" shall mean, with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum equal to the rate at which
the Administrative Agent is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being 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 its Eurodollar
Loans to be outstanding during such Interest Period.
"Eurodollar Loans": Loans the rate of interest applicable to which is
----------------
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
------------------
the then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"Event of Default": any of the events specified in Section 8,
----------------
provided that any requirement for the giving of notice, the lapse of time, or
--------
both, has been satisfied.
"Excess Cash Flow": for any fiscal year of the Borrower, the excess,
----------------
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) an amount equal to the amount of all non-cash charges
deducted in arriving at such Consolidated Net Income, (iii) decreases in
Consolidated Working Capital for such fiscal year, (iv) an amount equal to the
aggregate net non-cash loss on the Disposition of Property by the Borrower and
its Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income, (v) the amount, if any, by which Consolidated Working
Capital was increased by changes in the current deferred income tax account and
(vi) the amount by which Consolidated Working Capital was increased as a result
of the payment in such fiscal year of items referred to in clause (b)(vii) below
over (b) the sum, without duplication, of (i) an amount equal to the amount of
----
all non-cash credits included in arriving at such Consolidated Net Income, (ii)
the aggregate amount actually paid by the Borrower and its Subsidiaries in cash
during such fiscal year on account of Capital Expenditures (excluding the
principal amount of Indebtedness incurred in connection with such expenditures
and any such expenditures financed with the proceeds of any portion of the
Reinvestment Deferred Amount that exceeded any gain recognized as a result of
the event that gave rise to such Deferred Investment Amount), (iii) the
aggregate amount of all prepayments of Revolving Credit Loans and Swing Line
Loans during such fiscal year to the extent accompanying permanent optional
reductions of the Revolving Credit Commitments and all optional
10
prepayments of the Term Loans during such fiscal year, (iv) the aggregate amount
of all principal payments of Funded Debt (including, without limitation, the
Term Loans) of the Borrower and its Subsidiaries made during such fiscal year
(other than in respect of any revolving credit facility to the extent there is
not an equivalent permanent reduction in commitments thereunder), (v) increases
in Consolidated Working Capital for such fiscal year, (vi) an amount equal to
the aggregate net non-cash gain on the Disposition of Property by the Borrower
and its Subsidiaries during such fiscal year (other than sales of inventory in
the ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, (vii) the amount of non cash charges that decreased
Consolidated Working Capital during such fiscal year which resulted from items
that the Borrower reasonably determines in good faith are expected to be paid in
cash in the immediately following fiscal year, (viii) any cash disbursement made
against non-current liabilities to the extent not deducted in determining
Consolidated Net Income, (ix) the amount, if any, by which Consolidated Working
Capital was decreased by changes in the current deferred income tax account, (x)
the amount of distributions permitted by Section 7.6 which were made in such
fiscal year, (xi) the amount of investments, advances, loans or extensions of
credit made pursuant to clauses (d), (e), (i) and (j) of Section 7.8, to the
extent not funded by the incurrence of Indebtedness or contributions to capital
and (xii) any payments made to the former shareholders of the Company pursuant
to Section 1.11 of the Transaction Agreement.
"Excess Cash Flow Application Date": as defined in Section 2.11(c).
---------------------------------
"Excluded Foreign Subsidiaries": any Foreign Subsidiary the pledge of
-----------------------------
all of whose Capital Stock as Collateral would, in the good faith judgment of
the Borrower, result in adverse tax consequences to the Borrower.
"Expenditure Use Amounts": at any date, the amount equal to the sum
-----------------------
of (a) all amounts utilized by the Borrower and its Subsidiaries to finance
Capital Expenditures, other than Capital Expenditures which are (i) not in
excess of the Base CapEx Amount for the relevant fiscal year and any permitted
rollovers to such fiscal year of unused amounts from the prior fiscal year or
(ii) financed with Deferred Reinvestment Amounts, (b) all amounts utilized by
the Borrower and its Subsidiaries to finance investments permitted pursuant to
Section 7.8(i), except to the extent that the consideration (determined in
accordance with such Section 7.8(i)) for all such investments made since the
Closing Date does not exceed $30,000,000 in the aggregate and (c) all amounts
utilized by the Borrower and its Subsidiaries to finance investments permitted
pursuant to Section 7.8(j), except to the extent that the aggregate amount of
all such investments (valued at cost, but net of returns of capital from such
investments) made since the Closing Date does not exceed $5,000,000.
"Facility": each of (a) the Tranche A Term Loan Commitments and the
--------
Tranche A Term Loans made thereunder (the "Tranche A Term Loan Facility"), (b)
----------------------------
the Tranche B Term Loan Commitments and the Tranche B Term Loans made thereunder
(the "Tranche B Term Loan Facility"), (c) the Acquisition Term Loan Commitments
----------------------------
and the Acquisition Term Loans made thereunder (the "Acquisition Term Loan
---------------------
Facility") and (d) the Revolving Credit Commitments and the extensions of credit
--------
made thereunder (the "Revolving Credit Facility").
-------------------------
"Foreign Subsidiary": any Subsidiary of the Borrower that is not a
------------------
Domestic Subsidiary.
11
"Funded Debt": as to any Person, all Indebtedness of such Person that
-----------
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including, without
limitation, all current maturities and current sinking fund payments in respect
of such Indebtedness whether or not required to be paid within one year from the
date of its creation and, in the case of the Borrower, Indebtedness in respect
of the Loans.
"GAAP": generally accepted accounting principles in the United States
----
of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board and the rules and regulations of the
Securities and Exchange Commission, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances of the Borrower as of the
date of determination, except that for purposes of Section 7.1, GAAP shall be
determined on the basis of such principles in effect on the date hereof and
consistent with those used in the preparation of the most recent audited
financial statements delivered pursuant to Section 4.1(b). In the event that
any "Accounting Change" (as defined below) shall occur and such change results
in a change in the method of calculation of financial covenants, standards or
terms in this Agreement, then the Borrower and the Administrative Agent agree to
enter into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the Borrower's financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Borrower, the Administrative Agent and the Required Lenders, all financial
covenants, standards and terms in this Agreement shall continue to be calculated
or construed as if such Accounting Changes had not occurred. "Accounting
Changes" refers to changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the Securities and Exchange Commission (or successors thereto or
agencies with similar functions).
"Governmental Authority": any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (including, without limitation, the National Association of
Insurance Commissioners).
"Guarantee and Collateral Agreement": the Guarantee and Collateral
----------------------------------
Agreement to be executed and delivered by the Company, the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may be
amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
-------------------- -------------------
any obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) to induce the creation
of which the guaranteeing person has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
-------------------
of any other third Person (the "primary obligor") in any manner, whether
---------------
directly or indirectly, including, without limitation, any obligation of
12
the guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any Property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of any
such primary obligation or (2) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
-------- -------
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantors": the collective reference to the Subsidiary Guarantors
----------
and the Company.
"Incur": as defined in Section 7.2.
-----
"Indebtedness": of any Person at any date, without duplication, (a)
------------
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person's business which are
current liabilities), (c) all obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to Property acquired by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default are limited
to repossession or sale of such Property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party under bankers' acceptance, letter of credit or similar facilities,
(g) all obligations of such Person, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any Capital Stock (other than
common stock) of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property (including,
without limitation, accounts and contract rights) owned by such Person, whether
or not such Person has assumed or become liable for the payment of such
obligation; and (j) for the purposes of Section 8(e) only, the net exposure of
such Person in respect of Interest Rate Protection Agreements.
"Insolvency": with respect to any Multiemployer Plan, the condition
----------
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
---------
13
"Intellectual Property": the collective reference to all rights,
---------------------
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to xxx at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any ABR Loan, the last day of each
---------------------
March, June, September and December to occur while such Loan is outstanding and
the final maturity date of such Loan, (b) as to any Eurodollar Loan having an
Interest Period of three months or less, the last day of such Interest Period,
(c) as to any Eurodollar Loan having an Interest Period longer than three
months, each day which is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period and
(d) as to any Loan (other than any Revolving Credit Loan that is an ABR Loan and
any Swing Line Loan), the date of any repayment or prepayment made in respect
thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
---------------
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of the
--------
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension 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;
(ii) any Interest Period that would otherwise extend beyond the
Scheduled Revolving Credit Termination Date or beyond the date final
payment is due on the Tranche A Term Loans, the Tranche B Term Loans or the
Acquisition Term Loans, as the case may be, shall end on the Scheduled
Revolving Credit Termination Date or such due date, as applicable;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
"Interest Rate Protection Agreement": any interest rate protection
----------------------------------
agreement, interest rate futures contract, interest rate option, interest rate
cap or other interest rate hedge
14
arrangement, to or under which the Borrower or any of its Subsidiaries is a
party or a beneficiary on the date hereof or becomes a party or a beneficiary
after the date hereof.
"Issuing Lender": The Chase Manhattan Bank or any of its Affiliates,
--------------
in its capacity as issuer of any Letter of Credit.
"L/C Commitment": $5,000,000.
--------------
"L/C Fee Payment Date": the last day of each March, June, September
--------------------
and December and the last day of the Revolving Credit Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
---------------
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants": the collective reference to all the Revolving
----------------
Credit Lenders other than the Issuing Lender.
"Letters of Credit": as defined in Section 3.1(a).
-----------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement.
----
"Loan Documents": this Agreement, the Security Documents and the
--------------
Notes.
"Loan Parties": the Company, the Borrower and each Subsidiary of the
------------
Borrower which is a party to a Loan Document.
"Majority Acquisition Term Loan Facility Lenders": the Majority
-----------------------------------------------
Facility Lenders in respect of the Acquisition Term Loan Facility.
"Majority Facility Lenders": with respect to any Facility, the
-------------------------
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of (x) the Revolving Credit
Facility, prior to any termination of the Revolving Credit Commitments, the
holders of more than 50% of the Total Revolving Credit Commitments and (y) the
Acquisition Term Loan Facility, prior to the termination of the Acquisition Term
Loan Commitments, the holders of more than 50% of the sum of the available
Acquisition Term Loans Commitments and the Acquisition Term Loans then
outstanding).
"Majority Revolving Credit Facility Lenders": the Majority Facility
------------------------------------------
Lenders in respect of the Revolving Credit Facility.
"Mandatory Prepayment Date": as defined in Section 2.17(d).
-------------------------
15
"Material Adverse Effect": a material adverse effect on (a) the
-----------------------
Transaction, (b) the business, operations, property or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole or (c) the
validity or enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies of the Administrative Agent or the Lenders hereunder
or thereunder.
"Material Environmental Amount": an amount payable by the Borrower
-----------------------------
and/or its Subsidiaries in excess of $1,500,000 for remedial costs, compliance
costs, compensatory damages, punitive damages, fines, penalties or any
combination thereof.
"Materials of Environmental Concern": any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Material Subsidiary": any Subsidiary of the Company which has assets
-------------------
(valued at their fair market value) or annual revenues which are in excess of
$2,500,000.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined
------------------
in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
-----------------
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of reasonable attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset which is the
subject of such Asset Sale or Recovery Event (other than any Lien pursuant to a
Security Document) and other customary and reasonable fees and expenses actually
incurred in connection therewith and net of taxes paid or reasonably estimated
to be payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements) and (b) in connection
with any issuance or sale of equity securities or debt securities or instruments
or the incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of reasonable attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and other customary
fees and expenses actually incurred in connection therewith.
"Non-Excluded Taxes": as defined in Section 2.19(a).
------------------
"Non-U.S. Lender": as defined in Section 2.19(b).
---------------
"Notes": the collective reference to any promissory note evidencing
-----
Loans.
"Obligations": the unpaid principal of and interest on (including,
-----------
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Loans and all
16
other obligations and liabilities of the Borrower to the Administrative Agent or
to any Lender (or, in the case of Interest Rate Protection Agreements, any
affiliate of any Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan Document,
the Letters of Credit, any Interest Rate Protection Agreement entered into with
any Lender or any affiliate of any Lender or any other document made, delivered
or given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel
to the Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
"Participant": as defined in Section 10.6(b).
-----------
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
----
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Expenditure Amounts": at any date, the amount equal to (a)
-----------------------------
the sum of (i) all Designated Equity Amounts as of such date and (ii) any
portion of the Excess Cash Flow of the Company for fiscal years completed since
the Closing Date which was not required to be applied pursuant to the provisions
of Section 2.11(c) minus (b) the aggregate amount of Expenditure Use Amounts as
of such date.
"Permitted Holders": any of (a) Xxxx Capital and the Xxxx Affiliates,
-----------------
(b) each other holder of common stock of the Company on the Closing Date and (c)
senior management employees of the Borrower and (to the extent that it is not
then the Borrower) the Company.
"Person": an individual, partnership, corporation, limited liability
------
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prepayment Option Notice": as defined in Section 2.17(b).
------------------------
"Pricing Grid": the pricing grid attached hereto as Annex A.
------------
"Pro Forma Balance Sheets": as defined in Section 4.1(a).
------------------------
"Projections": as defined in Section 6.2(c).
-----------
"Property": any right or interest in or to property of any kind
--------
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Real Properties": as defined in Section 4.17.
---------------
17
"Recovery Event": any settlement of or payment in respect of any
--------------
property or casualty insurance claim or any condemnation proceeding relating to
any asset of the Company or any of its Subsidiaries.
"Refunded Swing Line Loans": as defined in Section 2.7.
-------------------------
"Refunding Date": as defined in Section 2.7.
--------------
"Register": as defined in Section 10.6(d).
--------
"Regulation U": Regulation U of the Board as in effect from time to
------------
time.
"Reimbursement Obligation": the obligation of the Borrower to
------------------------
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Reinvestment Deferred Amount": with respect to any Reinvestment
----------------------------
Event, the aggregate Net Cash Proceeds received by the Company or any of its
Subsidiaries in connection therewith which are not applied to prepay the Term
Loans or reduce the Revolving Credit Commitments pursuant to Section 2.11(b) as
a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
------------------
which the Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
-------------------
Officer stating that no Event of Default has occurred and is continuing and that
the Borrower (directly or indirectly through a Subsidiary) intends and expects
to use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire assets useful in its business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
------------------------------
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended or then committed to be expended prior to the relevant Reinvestment
Prepayment Date to acquire assets useful in the Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
----------------------------
Event, the earlier of (a) the date occurring six months (or, in the case of any
reinvestment to be made by the Borrower or any of its Subsidiaries from the
proceeds of any property or casualty insurance claim, twelve months) after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
----------------
ERISA, other than those events as to which the thirty day notice period is
waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Reg.(S)(S) 2615.
18
"Required Lenders": the holders of more than 50% of (a) until the
----------------
Closing Date, the Commitments and (b) thereafter, the sum of (i) the aggregate
unpaid principal amount of the Term Loans, (ii) the aggregate available
Acquisition Term Loan Commitments and (iii) the Total Revolving Credit
Commitments or, if the Revolving Credit Commitments have been terminated, the
Total Revolving Extensions of Credit.
"Required Prepayment Lenders": the Majority Facility Lenders in
---------------------------
respect of each Facility.
"Requirement of Law": as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"Responsible Officer": the chief executive officer, president or
-------------------
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"Revolving Credit Commitment": as to any Lender, the obligation of
---------------------------
such Lender, if any, to make Revolving Credit Loans and participate in Swing
Line Loans and Letters of Credit, in an aggregate principal and/or face amount
not to exceed the amount set forth under the heading "Revolving Credit
Commitment" opposite such Lender's name on Schedule 1.1, as the same may be
changed from time to time pursuant to the terms hereof.
"Revolving Credit Commitment Period": the period from and including
----------------------------------
the Closing Date to the Scheduled Revolving Credit Termination Date or such
earlier date on which the Revolving Credit Commitments shall terminate as
provided herein.
"Revolving Credit Lender": each Lender which has a Revolving Credit
-----------------------
Commitment or which has made Revolving Credit Loans.
"Revolving Credit Loans": as defined in Section 2.4.
----------------------
"Revolving Credit Percentage": as to any Revolving Credit Lender at
---------------------------
any time, the percentage which such Lender's Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time after the
Revolving Credit Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Revolving Credit Loans
then outstanding constitutes of the aggregate principal amount of the Revolving
Credit Loans then outstanding).
"Revolving Extensions of Credit": as to any Revolving Credit Lender
------------------------------
at any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Credit Loans made by such Lender then outstanding, (b) such
Lender's Revolving Credit Percentage of the aggregate principal amount of Swing
Line Loans then outstanding and (c) such Lender's Revolving Credit Percentage of
the L/C Obligations then outstanding.
"Scheduled Revolving Credit Termination Date": October 27, 2003.
-------------------------------------------
"Securities Act": the Securities Act of 1933, as amended from time to
--------------
time, and the rules and regulations.
19
"Security Documents": the collective reference to the Guarantee and
------------------
Collateral Agreement and all other security documents hereafter delivered to the
Administrative Agent granting a Lien on any Property of any Person to secure the
obligations and liabilities of any Loan Party under any Loan Document.
"Senior Subordinated Note Indenture": the Indenture entered into by
----------------------------------
the Borrower and certain of its Subsidiaries in connection with the issuance of
the Senior Subordinated Notes, together with all instruments and other
agreements entered into by the Borrower or such Subsidiaries in connection
therewith, as the same may be amended, supplemented or otherwise modified from
time to time in accordance with Section 7.9.
"Senior Subordinated Notes": the subordinated notes of the Borrower
-------------------------
to be issued pursuant to the Senior Subordinated Note Indenture.
"Single Employer Plan": any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of
-------
any date of determination, (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Change of Control": a "Change of Control" as defined in
---------------------------
either the Senior Subordinated Note Indenture or the Company Indenture.
"Subsidiary": as to any Person, a corporation, partnership, limited
----------
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified,
all references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall
refer to a Subsidiary or Subsidiaries of the Borrower.
"Subsidiary Guarantor": each Subsidiary of the Borrower other than
--------------------
any Excluded Foreign Subsidiary.
20
"Swing Line Commitment": the obligation of the Swing Line Lender to
---------------------
make Swing Line Loans pursuant to Section 2.6 in an aggregate principal amount
at any one time outstanding not to exceed $5,000,000.
"Swing Line Lender": The Chase Manhattan Bank, in its capacity as the
-----------------
lender of Swing Line Loans.
"Swing Line Loans": as defined in Section 2.6.
----------------
"Swing Line Participation Amount": as defined in Section 2.7.
-------------------------------
"Tax Benefit": as defined in Section 2.19(c).
-----------
"Telerate Page" means the display designated as Page 3750 on the
-------------
Telerate System Incorporated Service (or such other page as may replace such
page on such service for the purpose of displaying the rates at which Dollar
deposits are offered by leading banks in the London interbank deposit market).
"Term Loan Lenders": the collective reference to the Tranche A Term
-----------------
Loan Lenders, the Tranche B Term Loan Lenders and the Acquisition Term Loan
Lenders.
"Term Loans": the collective reference to the Tranche A Term Loans,
----------
the Tranche B Term Loans and the Acquisition Term Loans.
"Total Revolving Credit Commitments": at any time, the aggregate
----------------------------------
amount of the Revolving Credit Commitments at such time.
"Total Revolving Extensions of Credit": at any time, the aggregate
------------------------------------
amount of the Revolving Extensions of Credit of the Revolving Credit Lenders at
such time.
"Tranche A Term Loan": as defined in Section 2.1.
-------------------
"Tranche A Term Loan Commitment": as to any Lender, the obligation of
------------------------------
such Lender, if any, to make a Tranche A Term Loan to the Borrower hereunder in
a principal amount not to exceed the amount set forth under the heading "Tranche
A Term Loan Commitment" opposite such Lender's name on Schedule 1.1.
"Tranche A Term Loan Lender": each Lender which has a Tranche A Term
--------------------------
Loan Commitment or which has made a Tranche A Term Loan.
"Tranche A Term Loan Percentage": as to Tranche A Term Loan Lender at
------------------------------
any time, the percentage which such Lender's Tranche A Term Loan Commitment then
constitutes of the aggregate Tranche A Term Loan Commitments (or, at any time
after the Closing Date, the percentage which the aggregate principal amount of
such Lender's Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Repayment Amount": as defined in Section 2.17(d).
--------------------------
"Tranche B Term Loan": as defined in Section 2.1.
-------------------
21
"Tranche B Term Loan Commitment": as to Tranche B Term Loan Lender,
------------------------------
the obligation of such Lender, if any, to make a Tranche B Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading "Tranche B Term Loan Commitment" opposite such Lender's name
on Schedule 1.1.
"Tranche B Term Loan Lender": each Lender which has a Tranche B Term
--------------------------
Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Lender at any time, the
------------------------------
percentage which such Lender's Tranche B Term Loan Commitment then constitutes
of the aggregate Tranche B Term Loan Commitments (or, at any time after the
Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"Transaction": as defined in Section 5.1(b).
-----------
"Transaction Agreement": the Amended and Restated Recapitalization
---------------------
Agreement, dated as of October 4, 1997, by and among DI Acquisition, the Company
and certain shareholders of the Company, as amended, supplemented or otherwise
modified in accordance with the terms hereof and thereof.
"Transaction Documents": the collective reference to the Transaction
---------------------
Agreement and all other agreements, documents and instruments executed or filed
by or on behalf of DI Acquisition, the Company or any of its Subsidiaries or any
of their Affiliates with any Governmental Authority in connection with the
Transaction.
"Transferee": as defined in Section 10.15.
----------
"Type": as to any Loan, its nature as an ABR Loan or a Eurodollar
----
Loan.
"Uniform Customs": the Uniform Customs and Practice for Documentary
---------------
Credits (1993 Revision), International Chamber of Commerce Publication No. 500,
as the same may be amended from time to time.
"U.S. Taxes": as defined in Section 10.6(f)(ii).
----------
"Wholly Owned Subsidiary": as to any Person, any other Person all of
-----------------------
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
---------------------------------
a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
-----------------------------
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to
22
the Company and its Subsidiaries not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Term Loan Commitments. Subject to the terms and conditions
---------------------
hereof, (a) each Tranche A Term Loan Lender severally agrees to make a term loan
to the Borrower on the Closing Date (the "Tranche A Term Loans") in an amount
--------------------
not to exceed the amount of the Tranche A Term Loan Commitment of such Lender,
(b) each Tranche B Term Loan Lender severally agrees to make a term loan (the
"Tranche B Term Loans") to the Borrower on the Closing Date in an amount not to
---------------------
exceed the amount of the Tranche B Term Loan Commitment of such Lender and (c)
each Acquisition Term Loan Lender severally agrees to make up to three term
loans to the Borrower during the period prior to October 27, 1998 (the
"Acquisition Term Loans") in an aggregate amount not to exceed the amount of the
-----------------------
Acquisition Term Loan Commitment of such Lender. The Term Loans may from time
to time be Eurodollar Loans or ABR Loans, as determined by the Borrower and
notified to the Administrative Agent in accordance with Sections 2.2 and 2.12.
2.2 Procedure for Term Loan Borrowing. In the case of the Tranche A
---------------------------------
Term Loans and the Tranche B Term Loans, the Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 2:00 P.M., New York City time, one Business Day
prior to the requested Borrowing Date) requesting that the Tranche A Term Loan
Lenders and the Tranche B Term Loan Lenders make such Term Loans on the
requested Borrowing Date (which must be a Business Day) and specifying the
amount to be borrowed. All Tranche A Term Loans and Tranche B Term Loans
initially shall be made as ABR Loans and shall be in an amount equal to
$1,000,000 or a whole multiple of $500,000 in excess thereof. In the case of
Acquisition Term Loans, the Borrower may borrow under the Acquisition Term Loan
Commitments during the period prior to October 27, 1998 on any Business Day,
provided that the Borrower shall give the Administrative Agent irrevocable
--------
notice (which notice must be received by the Administrative Agent prior to (a)
3:00 P.M., New York City time, three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, or (b) 11:00 A.M., New York
City time, on the requested Borrowing Date, in the case of ABR Loans),
specifying (i) the amount and Type of Acquisition Term Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Each borrowing under the Acquisition Term
Loan Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$1,000,000 or a whole multiple of $500,000 in excess thereof (or, if the then
unused Acquisition Term Loan Commitments of all Acquisition Term Loan Lenders
aggregate less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans,
23
$5,000,000 or a whole multiple of $1,000,000 in excess thereof. Any Term Loans
which are made on the Closing Date may not be converted into or continued as a
Eurodollar Loan having an Interest Period in excess of one month prior to the
earlier of (a) the date which is 60 days after the Closing Date and (b) the date
upon which the Administrative Agent determines (in good faith) that the
syndication of the Commitments is complete. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Term Loan Lender thereof. Not
later than 12:00 Noon, New York City time, on the requested Borrowing Date each
Term Loan Lender shall make available to the Administrative Agent at its office
specified in Section 10.2 an amount in immediately available funds equal to the
Term Loan or Term Loans to be made by such Lender. The Administrative Agent
shall credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders in immediately available funds.
2.3 Repayment of Term Loans. (a) The Tranche A Term Loans of each
-----------------------
Tranche A Term Loan Lender shall mature in quarterly installments (other than
with respect to the last installment, which shall be due on October 27, 2003),
commencing on September 30, 1998, in an amount equal to such Lender's Tranche A
Term Loan Percentage of the amount equal to (i) the sum of the initial aggregate
principal amount of each Tranche A Term Loan of such Lender times (ii) the
percentage set forth below opposite the period during which such installment is
due:
Installment Percentage
----------- ----------
September 30, 1998 through June 30, 1999 0.75%
July 1, 1999 through June 30, 2000 1.25%
July 1, 2000 through December 31, 2001 5.50%
January 1, 2002 through June 30, 2002 7.00%
July 1, 2002 through October 27, 2003 7.50%
Any Tranche A Term Loans outstanding on October 27, 2003 shall be due and
payable on such date.
(b) The Tranche B Term Loan of each Tranche B Lender shall mature in
quarterly installments (other than with respect to the last installment, which
shall be due on October 27, 2004), commencing on September 30, 1998, each of
which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage of the amount equal to (i) the aggregate principal amount of the
Tranche B Term Loan of such Lender made on the Closing Date times (ii) the
percentage set forth below opposite the period during which such installment is
due:
Installment Percentage
----------- ----------
September 30, 1998 through December 31, 2003 0.2%
January 1, 2004 through October 27, 2004 23.9%
Any Tranche B Term Loans outstanding on October 27, 2004 shall be due and
payable on such date.
(c) The Acquisition Term Loans of each Acquisition Term Loan Lender
shall mature in quarterly installments (other than with respect to the last
installment, which shall
24
be due on October 27, 2003), commencing on September 30, 1998, in an amount
equal to such Lender's Acquisition Term Loan Percentage of the amount equal to
(i) the sum of the initial aggregate principal amount of each Acquisition Term
Loan of such Lender times (ii) the percentage set forth below opposite the
period during which such installment is due:
Installment Percentage
----------- ----------
September 30, 1998 through June 30, 2000 2.50%
July 1, 2000 through December 31, 2001 5.00%
January 1, 2002 through October 27, 2003 6.25%
; provided that any Acquisition Term Loan which is made by a Lender after April
--------
30, 1998 shall begin to amortize on December 31, 1998 and shall be payable from
and after such date in quarterly installments in the amount equal to the
percentage set forth above opposite the date upon which such installment is due
times the initial aggregate principal amount of such Acquisition Term Loan. Any
Acquisition Term Loans outstanding on October 27, 2003 shall be due and payable
on such date.
2.4 Revolving Credit Commitments. (a) Subject to the terms and
----------------------------
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Borrower from time to
----------------------
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding which, when added to such Lender's Revolving
Credit Percentage of the sum of (i) the aggregate principal amount of the Swing
Line Loans then outstanding and (ii) the aggregate amount of the L/C Obligations
then outstanding, does not exceed the amount of such Lender's Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.5 and 2.12, provided that no
--------
Revolving Credit Loan shall be made as a Eurodollar Loan after the day that is
one month prior to the Scheduled Revolving Credit Termination Date.
(b) The Borrower shall repay all outstanding Revolving Credit Loans
on the Scheduled Revolving Credit Termination Date (or such earlier date as all
amounts owing hereunder shall become due and payable).
2.5 Procedure for Revolving Credit Borrowing. The Borrower may
----------------------------------------
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Borrower shall give the
--------
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to (a) 3:00 P.M., New York City time, three Business
Days prior to the requested Borrowing Date, in the case of Eurodollar Loans, or
(b) 11:00 A.M., New York City time, on the requested Borrowing Date, in the case
of ABR Loans), specifying (i) the amount and Type of Revolving Credit Loans to
be borrowed, (ii) the requested Borrowing Date and (iii) in the case of
Eurodollar Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Period therefor. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of ABR Loans, $1,000,000 or a whole multiple of $500,000 in excess thereof
(or, if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of
25
Eurodollar Loans, $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; provided that the Swing Line Lender may, on behalf of the Borrower,
--------
request borrowings of ABR Loans under the Revolving Credit Commitments in
amounts other than those specified above to the extent necessary to repay
Refunded Swing Line Loans. Upon receipt of any such notice from the Borrower,
the Administrative Agent shall promptly notify each Revolving Credit Lender
thereof. Each Revolving Credit Lender will make the amount of its pro rata
--- ----
share of each borrowing available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent specified in Section 10.2
prior to 12:00 Noon, New York City time, on the Borrowing Date requested by the
Borrower in funds immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the Administrative
Agent crediting the account of the Borrower on the books of such office with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Credit Lenders and in like funds as received by the Administrative
Agent.
2.6 Swing Line Commitment. (a) Subject to the terms and conditions
---------------------
hereof, the Swing Line Lender agrees to make a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments from time to
time during the Revolving Credit Commitment Period by making swing line loans
("Swing Line Loans") to the Borrower; provided that (i) the aggregate principal
------------------ --------
amount of Swing Line Loans outstanding at any time shall not exceed the Swing
Line Commitment then in effect (notwithstanding that the Swing Line Loans
outstanding at any time, when aggregated with the Swing Line Lender's other
outstanding Revolving Credit Loans hereunder, may exceed the Swing Line
Commitment then in effect) and (ii) the Borrower shall not request, and the
Swing Line Lender shall not make, any Swing Line Loan if, after giving effect to
the making of such Swing Line Loan, the aggregate amount of the Available
Revolving Credit Commitments would be less than zero. During the Revolving
Credit Commitment Period, the Borrower may use the Swing Line Commitment by
borrowing, repaying and reborrowing, all in accordance with the terms and
conditions hereof. Swing Line Loans shall be made as ABR Loans only and shall
not be entitled to be converted into Eurodollar Loans.
(b) The Borrower shall repay all outstanding Swing Line Loans on the
Scheduled Revolving Credit Termination Date or such earlier date on which the
Revolving Credit Commitments shall terminate as provided herein.
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line
-----------------------------------------------------------
Loans. (a) Whenever the Borrower desires that the Swing Line Lender make Swing
Line Loans it shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 2:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date (which shall be a Business Day during the Revolving Credit
Commitment Period). Each borrowing under the Swing Line Commitment shall be in
an amount equal to $500,000 or a whole multiple of $100,000 in excess thereof.
Not later than 4:00 P.M., New York City time, on the Borrowing Date specified in
a notice in respect of Swing Line Loans, the Swing Line Lender shall make
available to the Administrative Agent at its office specified in Section 10.2 an
amount in immediately available funds equal to the amount of the Swing Line Loan
to be made by the Swing Line Lender. The Administrative Agent shall make the
proceeds of such Swing Line Loan available to the Borrower on such Borrowing
Date by depositing such proceeds in the account of the Borrower with the
Administrative Agent on such Borrowing Date in immediately available funds.
26
(b) The Swing Line Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on notice given
by the Swing Line Lender no later than 2:00 P.M., New York City time, on the
requested Borrowing Date, request each Revolving Credit Lender to make, and each
Revolving Credit Lender hereby agrees to make, a Revolving Credit Loan, in an
amount equal to such Revolving Credit Lender's Revolving Credit Percentage of
the aggregate amount of the Swing Line Loans (the "Refunded Swing Line Loans")
-------------------------
outstanding on the date of such notice, to repay the Swing Line Lender. Each
Revolving Credit Lender shall make the amount of such Revolving Credit Loan
available to the Administrative Agent at its office set forth in Section 10.2 in
immediately available funds, not later than 4:00 P.M., New York City time, on
the date of such notice. The proceeds of such Revolving Credit Loans shall be
immediately applied by the Swing Line Lender to repay the Refunded Swing Line
Loans. The Borrower irrevocably authorizes the Swing Line Lender to charge the
Borrower's accounts with the Administrative Agent (up to the amount available in
each such account) in order to immediately pay the amount of such Refunded Swing
Line Loans to the extent amounts received from the Revolving Credit Lenders are
not sufficient to repay in full such Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have otherwise
been made pursuant to Section 2.7(b), one of the events described in Section
8(f) shall have occurred and be continuing with respect to the Borrower or if
for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "Refunding Date"), purchase for cash an undivided participating interest in
--------------
an amount equal to (i) its Revolving Credit Percentage times (ii) the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans (the "Swing Line Participation Amount").
-------------------------------
(d) Whenever, at any time after the Swing Line Lender has received
from any Revolving Credit Lender such Lender's Swing Line Participation Amount,
the Swing Line Lender receives any payment on account of the Swing Line Loans,
the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the Loans
referred to in Section 2.7(b) and to purchase participating interests pursuant
to Section 2.7(c) shall be absolute and unconditional and shall not be affected
by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower,
27
any other Loan Party or any other Revolving Credit Lender; or (v) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
2.8 Commitment Fees, etc. (a) The Borrower agrees to pay to the
---------------------
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment
(without giving effect to any Swing Line Loans which are then outstanding) of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Scheduled Revolving Credit Termination Date or such earlier date on which the
Revolving Credit Commitments shall terminate as provided herein, commencing on
the first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent for the
account of each Acquisition Term Loan Lender a commitment fee for the period
from and including the Closing Date to October 27, 1998, computed at the
Commitment Fee Rate on the amount by which the average daily Acquisition Term
Loan Commitment of such Lender during the period for which payment is due
exceeds the average daily principal amount (without giving effect to any
prepayments or repayments thereof) during such period of all Acquisition Term
Loans made by such Lender. Such commitment fee shall be payable quarterly in
arrears on the last day of each March, June, September and December and on
October 27, 1998, commencing on the first of such dates to occur after the date
hereof.
(c) The Borrower agrees to pay to the Administrative Agent the fees
in the amounts and on the dates previously agreed to in writing by the Borrower
and the Administrative Agent.
2.9 Termination or Reduction of Commitments. (a) The Borrower shall
---------------------------------------
have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
--------
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans and Swing Line Loans made on the effective date thereof,
the Total Revolving Extensions of Credit would exceed the Total Revolving Credit
Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a
whole multiple thereof, and shall reduce permanently the Revolving Credit
Commitments then in effect.
(b) The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent, to terminate the Acquisition
Term Loan Commitment or, from time to time, to reduce the amount of the
Acquisition Term Loan Commitment. Any such reduction shall be in an amount
equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently
the Acquisition Term Loan Commitments then in effect.
2.10 Optional Prepayments. The Borrower may at any time and from
--------------------
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; provided, that if a Eurodollar Loan is
--------
28
prepaid on any day earlier than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.20.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each relevant Lender thereof. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein, together
with (except in the case of Revolving Credit Loans which are ABR Loans and any
Swing Line Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Term Loans and Revolving Credit Loans shall be in an aggregate
principal amount of $1,000,000 or a whole multiple thereof. Partial Prepayments
of Swing Line Loans shall be in an aggregate principal amount of $100,000 or a
whole multiple thereof. Amounts to be applied in connection with optional
prepayments of the Term Loans shall be applied pro rata among the Tranche A Term
--- ----
Loans, the Tranche B Term Loans and the Acquisition Term Loans based upon the
outstanding principal amount thereof.
2.11 Mandatory Prepayments and Commitment Reductions. (a) Unless
-----------------------------------------------
the Required Prepayment Lenders shall otherwise agree, if any Capital Stock or
Indebtedness shall be issued or Incurred by the Company or any of its
Subsidiaries, an amount equal to 100% of the Net Cash Proceeds thereof shall be
applied on the date of such issuance or Incurrence toward the prepayment of the
Term Loans and the reduction of the Revolving Credit Commitments as set forth in
Section 2.11(d); provided that no such prepayment and reduction shall be
--------
required pursuant to this Section 2.11(a) with respect to (i) Designated Equity
Amounts, (ii) any such Net Cash Proceeds from the issuance of Capital Stock
which is applied within five Business Days after the receipt thereof by the
Company and its Subsidiaries to repay Indebtedness Incurred in reliance upon the
provisions of Section 7.2(i) or (j) hereof, (iii) other than to the extent set
forth therein, Indebtedness Incurred in accordance with Section 7.2 and (iv) up
to $10,000,000 in aggregate Net Cash Proceeds from the issuance of Capital Stock
by the Borrower after the Closing Date.
(b) Unless the Required Prepayment Lenders shall otherwise agree, if
on any date the Company or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof, such Net Cash Proceeds shall be
applied on such date toward the prepayment of the Term Loans and the reduction
of the Revolving Credit Commitments as set forth in Section 2.11(d); provided,
--------
that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of
Asset Sales that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $2,000,000 in any fiscal year of the
Borrower and (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans and the reduction of
the Revolving Credit Commitments as set forth in Section 2.11(d).
(c) Unless the Required Prepayment Lenders shall otherwise agree, if,
for any fiscal year of the Borrower commencing with the fiscal year ending
December 31, 1998, there shall be Excess Cash Flow, the Borrower shall, on the
relevant Excess Cash Flow Application Date, apply the ECF Percentage of such
Excess Cash Flow toward the prepayment of the Term Loans and the reduction of
the Revolving Credit Commitments as set forth in Section 2.11(d). Each such
prepayment and commitment reduction shall be made on a date (an "Excess Cash
-----------
Flow Application Date") no later than five days after the earlier of (i) the
---------------------
date on which the financial statements of the Borrower referred to in Section
6.1(a), for the fiscal year with respect to which such prepayment is made, are
required to be delivered to the Lenders and (ii) the date such financial
statements are actually delivered.
29
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 2.11 shall be applied, first, to
-----
the prepayment of the Term Loans (pro rata among the Tranche A Term Loans, the
--- ----
Tranche B Term Loans and the Acquisition Loans, based upon the outstanding
principal amount thereof), second, to the reduction of any available Acquisition
------
Term Loan Commitments and, third, to reduce permanently the Revolving Credit
-----
Commitments. Any such reduction of the Revolving Credit Commitments shall be
accompanied by prepayment of the Revolving Credit Loans and/or Swing Line Loans
to the extent, if any, that the Total Revolving Extensions of Credit exceed the
amount of the Total Revolving Credit Commitments as so reduced, provided that if
--------
the aggregate principal amount of Revolving Credit Loans and Swing Line Loans
then outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrower shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Administrative Agent
for the benefit of the Lenders on terms and conditions satisfactory to the
Administrative Agent. Subject to the immediately preceding sentence, the
application of any prepayment pursuant to Section 2.11 shall be made first to
ABR Loans and second to Eurodollar Loans. Each prepayment of the Loans under
Section 2.11 (except in the case of Revolving Credit Loans that are ABR Loans
and Swing Line Loans) shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid.
(e) All unpaid amounts owing hereunder shall be due and payable on
October 27, 2004.
2.12 Conversion and Continuation Options. (a) The Borrower may elect
-----------------------------------
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Days' prior irrevocable notice of
such election, provided that any such conversion of Eurodollar Loans may only be
--------
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), provided that no ABR Loan under a particular Facility may be
--------
converted into a Eurodollar Loan (i) when any Event of Default has occurred and
is continuing and the Administrative Agent or the Majority Facility Lenders in
respect of such Facility have determined in its or their sole discretion not to
permit such conversions or (ii) after the date that is one month prior to the
final scheduled termination or maturity date of such Facility. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
--------
that no Eurodollar Loan under a particular Facility may be continued as such (i)
when any Event of Default has occurred and is continuing and the Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion not to permit such continuations or
(ii) after the date that is one month prior to the final scheduled termination
or maturity date of such Facility, and provided, further, that if the Borrower
-------- -------
shall fail to give any required notice as described above in this paragraph or
if such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to ABR Loans on the last day of such
30
then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.13 Minimum Amounts and Maximum Number of Eurodollar Tranches.
---------------------------------------------------------
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans
hereunder and all selections of Interest Periods hereunder shall be in such
amounts and be made pursuant to such elections so that, (a) after giving effect
thereto, the aggregate principal amount of the Eurodollar Loans comprising each
Eurodollar Tranche shall be equal to $5,000,000 or a whole multiple of
$1,000,000 in excess thereof and (b) no more than ten Eurodollar Tranches shall
be outstanding at any one time.
2.14 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
--------------------------------
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 2.14
plus 2% or (y) in the case of Reimbursement Obligations, the rate applicable to
----
ABR Loans under the Revolving Credit Facility plus 2%, and (ii) if all or a
----
portion of any interest payable on any Loan or Reimbursement Obligation or any
commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the rate applicable to
ABR Loans under the relevant Facility plus 2% (or, in the case of any such other
----
amounts that do not relate to a particular Facility, the ABR plus 3.75%), in
----
each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (as well after as before
judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
--------
2.14 shall be payable from time to time on demand.
2.15 Computation of Interest and Fees. (a) Interest, fees and
--------------------------------
commissions payable pursuant hereto shall be calculated on the basis of a 360-
day year for the actual days elapsed, except that, with respect to ABR Loans the
rate of interest on which is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the ABR or the Eurocurrency Reserve Requirements
shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable
notify the Borrower and the relevant Lenders of the effective date and the
amount of each such change in interest rate.
31
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.14(a).
2.16 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
that were to have been continued as such on such first day shall be converted on
such day to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans under the relevant Facility
shall be made or continued as such, nor shall the Borrower have the right to
convert Loans under the relevant Facility to Eurodollar Loans.
2.17 Pro Rata Treatment and Payments. (a) Each borrowing by the
-------------------------------
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made pro rata according to the respective Tranche A Term Loan Percentages,
--- ----
Tranche B Term Loan Percentages, Acquisition Term Loan Percentages or Revolving
Credit Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Tranche A Term Loans, the Tranche B
Term Loans or the Acquisition Term Loans shall be made pro rata according to the
--- ----
respective outstanding principal amounts of such Term Loans then held by the
relevant Term Loan Lenders (except as otherwise provided in paragraph (d)
below). The amount of each principal prepayment of the Term Loans shall be
applied to reduce the then remaining installments of the Tranche A Term Loans,
Tranche B Term Loans and Acquisition Term Loans, as the case may be, pro rata
--- ----
based upon the then remaining principal amount thereof. Amounts prepaid on
account of the Term Loans may not be reborrowed.
32
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Credit Loans shall be made
pro rata according to the respective outstanding principal amounts of the
--- ----
Revolving Credit Loans then held by the Revolving Credit Lenders.
(d) Notwithstanding anything to the contrary in Section 2.11(d) or
2.17, with respect to the amount of any optional or mandatory prepayment
described in Section 2.10 or 2.11 that is allocated to Tranche B Term Loans
(such amounts, the "Tranche B Prepayment Amount"), at any time when Tranche A
---------------------------
Term Loans or Acquisition Term Loans remain outstanding, the Borrower will, in
lieu of applying such amount to the prepayment of Tranche B Term Loans as
provided in Section 2.10 or 2.11, on the date specified in Section 2.10 or 2.11
for such prepayment, give the Administrative Agent telephonic notice (promptly
confirmed in writing) requesting that the Administrative Agent prepare and
provide to each Tranche B Term Loan Lender a notice (each, a "Prepayment Option
-----------------
Notice") as described below. As promptly as practicable after receiving such
------
notice from the Borrower, the Administrative Agent will send to each Tranche B
Term Loan Lender a Prepayment Option Notice, which shall be in the form of
Exhibit G, and shall include an offer by the Borrower to prepay on the date
(each a "Mandatory Prepayment Date") that is 10 Business Days after the date of
-------------------------
the Prepayment Option Notice, the relevant Tranche B Term Loans of such Lender
by an amount equal to the portion of the Tranche B Prepayment Amount indicated
in such Lender's Prepayment Option Notice as being applicable to such Lender's
Tranche B Term Loans. On the Mandatory Prepayment Date, (i) the Borrower shall
pay to the Administrative Agent the aggregate amount necessary to prepay that
portion of the outstanding relevant Term Loans in respect of which Tranche B
Term Loan Lenders have accepted prepayment as described above (such Lenders, the
"Accepting Lenders"), and such amount shall be applied to reduce the Tranche B
-----------------
Repayment Amounts with respect to each Accepting Lender and (ii) the Borrower
shall pay to the Administrative Agent an amount equal to the remaining portion
of the Tranche B Prepayment Amount not accepted by the Accepting Lenders, and
such amount shall be applied to the prepayment of the Tranche A Term Loans and
the Acquisition Term Loans (ratably between them).
(e) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
Section 10.2, in Dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day. If any
payment on a Eurodollar Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day. In the case of any extension of any payment
of principal pursuant to the preceding two sentences, interest thereon shall be
payable at the then applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the
33
Administrative Agent, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Administrative Agent by the required time on
the Borrowing Date therefor, such Lender shall pay to the Administrative Agent,
on demand, such amount with interest thereon at a rate equal to the daily
average Federal Funds Effective Rate for the period until such Lender makes such
amount immediately available to the Administrative Agent. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this Section 2.17(f) shall be conclusive in the absence of manifest error.
If such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount
with interest thereon at the rate per annum applicable to ABR Loans under the
relevant Facility, on demand, from the Borrower.
2.18 Requirements of Law. (a) If the adoption of or any change in
-------------------
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Taxes covered by Section 2.19
and changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount receivable; provided that the Borrower
--------
shall not be required to compensate a Lender pursuant to this paragraph for any
amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor.
If any Lender becomes entitled to claim any additional amounts pursuant to this
Section 2.18, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of
34
its obligations hereunder or under or in respect of any Letter of Credit to a
level below that which such Lender or such corporation could have achieved but
for such adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an amount
deemed by such Lender to be material, then from time to time, after submission
by such Lender to the Borrower (with a copy to the Administrative Agent) of a
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction; provided
--------
that the Borrower shall not be required to compensate a Lender pursuant to this
paragraph for any amounts incurred more than six months prior to the date that
such Lender notifies the Borrower of such Lender's intention to claim
compensation therefor.
(c) A certificate as to any additional amounts payable pursuant to
this Section 2.18 submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section 2.18 shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 Taxes. (a) All payments made by the Borrower under this
-----
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
------------------
payable to the Administrative Agent or any Lender hereunder, the amounts so
payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement, provided,
--------
however, that the Borrower shall not be required to (x) increase any such
-------
amounts payable to any Lender that is not organized under the laws of the United
States of America or a state thereof to the extent such Lender fails to comply
with Section 2.19(b) or (y) compensate a Lender pursuant to this paragraph for
any amounts incurred more than six months prior to the date that such Lender
notifies the Borrower of such Lender's intention to claim compensation therefor.
Whenever any Non-Excluded Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its
own account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this Section 2.19
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
35
(b) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "Non-U.S. Lender") shall
---------------
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8, or any subsequent versions thereof
or successors thereto (and, if such Non-U.S. Lender delivers a Form W-8, an
annual certificate representing that such Non-U.S. Lender is not a "bank" for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)), properly completed and duly executed by such
Non-U.S. Lender claiming complete exemption from, or a reduced rate of, U.S.
federal withholding tax on all payments by the Borrower under this Agreement and
the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender
on or before the date it becomes a party to this Agreement (or, in the case of
any Participant, on or before the date such Participant purchases the related
participation). In addition, each Non-U.S. Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify the Borrower
at any time it determines that it is no longer in a position to provide any
previously delivered certificate to the Borrower (or any other form of
certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this Section 2.19(b), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.19(b) that
such Non-U.S. Lender is not legally able to deliver.
(c) In the event the Borrower makes any additional payment to any Lender
or Administrative the Agent pursuant to Section 2.19(a) and such Lender or the
Administrative Agent, by reason of payment by the Borrower of any Taxes, obtains
a credit against, or return or reduction of, any tax payable by it in, or any
other currently realized tax benefit from, a taxing jurisdiction which it would
not have enjoyed but for such payment ("Tax Benefit"), such Lender or the
-----------
Administrative Agent shall, to the extent that it can do so without prejudice to
the retention of such Tax Benefit, thereupon pay to the Borrower the amount
which, after the deduction of any additional tax savings realized as a result of
such payment, shall equal the amount of such Tax Benefit; provided, however,
-------- -------
that the Borrower shall not be entitled to require such Lender or the
Administrative Agent to supply it with details of its tax position or to inspect
any records, including tax returns, of any Lender or the Administrative Agent.
The Borrower agrees to reimburse the Administrative Agent and each Lender upon
demand for out-of-pocket costs and expenses (other than expenses incurred in
connection with the preparation of any tax returns) incurred in connection with
any determination required pursuant to this Section 2.19(c).
2.20 Indemnity. The Borrower agrees to indemnify each Lender and to
---------
hold each Lender harmless from any loss or expense (other than any loss of
Applicable Margin) which such Lender reasonably may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
36
making of a prepayment of Eurodollar Loans on a day which is not the last day of
an Interest Period with respect thereto. Such indemnification shall be based
upon the amount equal to the excess, if any, of (i) the amount of interest which
would have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) over (ii) the amount of interest (as
----
reasonably determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section 2.20 submitted to the Borrower by any
Lender shall be presumptively correct in the absence of manifest error. This
covenant shall survive the termination of this Agreement and the payment of the
Loans and all other amounts payable hereunder.
2.21 Change of Lending Office. Each Lender agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 2.18 or 2.19(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
--------
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section 2.21 shall
-------- -------
affect or postpone any of the obligations of any Borrower or the rights of any
Lender pursuant to Section 2.18 or 2.19(a).
2.22 Replacement of Lenders under Certain Circumstances. The
--------------------------------------------------
Borrower shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing pursuant to Section 2.18 or 2.19 or (b) defaults
in its obligation to make Loans hereunder, with a replacement financial
institution; provided that (i) such replacement does not conflict with any
--------
Requirement of Law, (ii) no Event of Default shall have occurred and be
continuing at the time of such replacement, (iii) prior to any such replacement,
such Lender shall not have eliminated the continued need for payment of amounts
owing pursuant to Section 2.18 or 2.19, (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.20 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the
Borrower shall be obligated to pay the registration and processing fee referred
to therein), (viii) until such time as such replacement shall be consummated,
the Borrower shall pay all additional amounts (if any) required pursuant to
Section 2.18 or 2.19, as the case may be, and (ix) any such replacement shall
not be deemed to be a waiver of any rights which the Borrower, the
Administrative Agent or any other Lender shall have against the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
--------------
the Issuing Lender, in reliance on the agreements of the other Revolving Credit
Lenders set forth
37
in Section 3.4(a), agrees to issue letters of credit ("Letters of Credit") for
-----------------
the account of the Borrower on any Business Day during the Revolving Credit
Commitment Period in such form as may be approved from time to time by the
Issuing Lender; provided that the Issuing Lender shall have no obligation to
--------
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Credit Commitments would be less than zero. Each Letter of
Credit shall (i) be denominated in Dollars and (ii) expire no later than the
earlier of (x) the first anniversary of its date of issuance and (y) the date
which is five Business Days prior to the Scheduled Revolving Credit Termination
Date, provided that any Letter of Credit with a one-year term may provide for
--------
the renewal thereof for additional one-year periods (which shall in no event
extend beyond the date referred to in clause (y) above).
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letter of Credit. The Borrower may
------------------------------------------
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance thereof.
The Issuing Lender shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the issuance of each
Letter of Credit (including the amount thereof).
3.3 Commissions, Fees and Other Charges. (a) The Borrower will pay
-----------------------------------
a commission on all outstanding Letters of Credit at a per annum rate equal to
the Applicable Margin then in effect with respect to Eurodollar Loans under the
Revolving Credit Facility, shared ratably among the Revolving Credit Lenders and
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, the Borrower shall pay to the Issuing Lender for its own
account a fronting fee of 1/4 of 1% per annum, payable quarterly in arrears on
each L/C Fee Payment Date after the issuance date.
(b) In addition to the foregoing fees and commissions, the Borrower
shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees
------------------
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters
38
of Credit hereunder, each L/C Participant irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Lender, on the terms
and conditions hereinafter stated, for such L/C Participant's own account and
risk an undivided interest equal to such L/C Participant's Revolving Credit
Percentage in the Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by the Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with
the Issuing Lender that, if a draft is paid under any Letter of Credit for which
the Issuing Lender is not reimbursed in full by the Borrower in accordance with
the terms of this Agreement, such L/C Participant shall pay to the Issuing
Lender upon demand at the Issuing Lender's address for notices specified herein
an amount equal to such L/C Participant's Revolving Credit Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to ABR Loans under the Revolving Credit Facility. A certificate of
the Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its pro
---
rata share of such payment in accordance with Section 3.4(a), the Issuing Lender
----
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its pro rata share thereof;
--- ----
provided, however, that in the event that any such payment received by the
-------- -------
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
----------------------------------------
reimburse the Issuing Lender on each date on which the Issuing Lender notifies
the Borrower of the date and amount of a draft presented under any Letter of
Credit and paid by the Issuing Lender for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in lawful
money of the United States of America and in immediately available funds.
Interest shall be payable on any and all amounts remaining unpaid by the
Borrower under this Section from the date such amounts become payable (whether
at stated maturity, by acceleration or otherwise) until payment in full at the
rate set forth in Section 2.14(c). Each drawing under any Letter of Credit
shall (unless an event of the type described in clause (i)
39
or (ii) of Section 8(f) shall have occurred and be continuing with respect to
the Borrower, in which case the procedures specified in Section 3.4 for funding
by L/C Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.5 of ABR Loans (or,
at the option of each of the Administrative Agent and the Swing Line Lender in
its respective sole discretion, a borrowing pursuant to Section 2.7 of Swing
Line Loans) in the amount of such drawing. The Borrowing Date with respect to
such borrowing shall be the date of such drawing.
3.6 Obligations Absolute. The Borrower's obligations under this
--------------------
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions resulting from the gross negligence or willful misconduct of the
Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
3.8 Applications. To the extent that any provision of any
------------
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, the Company and the Borrower hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:
4.1 Financial Condition. (a) The unaudited pro forma consolidated
------------------- --- -----
balance sheets (including a detailed statement of shareholder's equity) of (i)
the Borrower and its consolidated Subsidiaries as at September 30, 1997
(including the notes thereto) (the
40
"Borrower Pro Forma Balance Sheet") and (ii) the Company and its consolidated
--------------------------------
Subsidiaries as at September 30, 1997 (including the notes thereto) (the
"Company Pro Forma Balance Sheet"; and collectively with the Borrower Pro Forma
--------------------------------
Balance Sheet, the "Pro Forma Balance Sheets"), copies of which have heretofore
------------------------
been furnished to each Lender, have been prepared giving effect (as if such
events had occurred on September 30, 1997) to (i) the consummation of the
Transaction and the contribution of assets by the Company to the Borrower, (ii)
the Indebtedness to be incurred on the Closing Date and the use of proceeds
thereof and (iii) the payment of fees and expenses in connection with the
foregoing. The Pro Forma Balance Sheets have been prepared giving
consideration, among other factors, to the requirements of Regulation S-X of the
Securities Act based on the best information available to the Company and the
Borrower as of the date of delivery thereof, are consistent in all material
respects with the forecasts previously delivered to the Lenders and present
fairly in all material respects on a pro forma basis the estimated financial
--- -----
position of the Company and its consolidated Subsidiaries and the Borrower and
its consolidated Subsidiaries, as the case may be, as at September 30, 1997,
assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheets of the Company as at
December 31, 1996, December 31, 1995 and December 31, 1994, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from
McGladrey & Xxxxxx, present fairly in all material respects the consolidated
financial condition of the Company as at such date, and the consolidated results
of its operations and its consolidated cash flows for the respective fiscal
years then ended. The unaudited consolidated balance sheet of the Company as at
June 30, 1997, and the related unaudited consolidated statements of income and
cash flows for the six-month period ended on such date, present fairly in all
material respects the consolidated financial condition of the Company as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the six-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). The Company and its
Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, which are not reflected in the most recent audited
financial statements referred to in this paragraph (b). During the period from
December 31, 1996 to and including the date hereof there has been no Disposition
by the Company or any of its Subsidiaries of any material part of its business
or Property.
4.2 No Change. Since June 30, 1997 there has been no development or
---------
event which has had or could reasonably be expected to have a Material Adverse
Effect.
4.3 Corporate Existence; Compliance with Law. Each of the Company
----------------------------------------
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to
41
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.4 Corporate Power; Authorization; Enforceable Obligations. Each
-------------------------------------------------------
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Transaction and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, (ii) those consents, authorizations, filings
and notices (to the extent material) which have been obtained or made and are in
full force and effect and (iii) the filings referred to in Section 4.19. Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
party thereto. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party party thereto, enforceable against each such Loan Party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 No Legal Bar. The execution, delivery and performance of this
------------
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of the Company or any of its
Subsidiaries and will not result in, or require, the creation or imposition of
any Lien on any of their respective properties or revenues pursuant to any
Requirement of Law or any such Contractual Obligation (other than the Liens
created by the Security Documents). No Requirement of Law or Contractual
Obligation applicable to the Borrower or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
4.6 No Material Litigation. No litigation, investigation or
----------------------
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Company or the Borrower, threatened by or against the
Company or any of its Subsidiaries or against any of their respective properties
or revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
4.7 No Default. Neither the Company nor any of its Subsidiaries is
----------
in default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect.
No Default or Event of Default has occurred and is continuing.
4.8 Ownership of Property; Liens. Each of the Company and each of
----------------------------
its Subsidiaries has title in fee simple to, or a valid leasehold interest in,
all its real property, and good title to, or a valid leasehold interest in, all
its other Property, and none of such Property is subject to any Lien except as
permitted by Section 7.3.
42
4.9 Intellectual Property. The Company and each of its Subsidiaries
---------------------
owns, or is licensed to use, all Intellectual Property necessary for the conduct
of its business as currently conducted. No material claim has been asserted and
is pending by any Person challenging or questioning the use of any Intellectual
Property or the validity or effectiveness of any Intellectual Property, nor does
the Company or Borrower know of any valid basis for any such claim. The use by
the Company and its Subsidiaries of Intellectual Property which is material to
the operations of the Company and its Subsidiaries does not infringe on the
rights of any Person in any material respect.
4.10 Taxes. Each of the Company and each of its Subsidiaries has
-----
filed or caused to be filed all Federal, state and other material tax returns
which are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
Property and all other taxes, fees or other charges imposed on it or any of its
Property by any Governmental Authority (other than any the amount or validity of
which are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Company or its Subsidiaries, as the case may be); no tax Lien has
been filed, and (except as disclosed on Schedule 4.10), to the knowledge of the
Company and the Borrower, no claim is being asserted, with respect to any such
tax, fee or other charge.
4.11 Federal Regulations. No part of the proceeds of any Loans will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation G or Regulation U of the
Board as now and from time to time hereafter in effect or for any purpose which
violates the provisions of the Regulations of the Board. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
said Regulation G or Regulation U, as the case may be.
4.12 Labor Matters. There are no strikes or other labor disputes
-------------
against the Company or any of its Subsidiaries pending or, to the knowledge of
the Company or the Borrower, threatened that (individually or in the aggregate)
could reasonably be expected to have a Material Adverse Effect. Hours worked
by, and payment made to, employees of the Company and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. All
payments due from the Company or any of its Subsidiaries on account of employee
health and welfare insurance that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect if not paid have been
paid or accrued as a liability on the books of the Company or such Subsidiary or
otherwise disclosed in writing to the Lenders.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
-----
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made,
43
exceed the value of the assets of such Plan allocable to such accrued benefits
by a material amount. Neither the Borrower nor any Commonly Controlled Entity
has had a complete or partial withdrawal from any Multiemployer Plan which has
resulted or could reasonably be expected to result in a material liability under
ERISA, and neither the Borrower nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the Borrower or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.14 Investment Company Act; Other Regulations. No Loan Party is an
-----------------------------------------
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 Subsidiaries. The Subsidiaries listed on Schedule 4.15
------------
constitute all the Subsidiaries of the Company at the date hereof.
4.16 Use of Proceeds. The proceeds of the Tranche A Term Loans and
---------------
the Tranche B Term Loans shall be used to finance a portion of the Transaction
and to pay related fees and expenses. The proceeds of the Acquisition Term
Loans shall be used to pay the consideration for the acquisitions described in
Section 7.8(i) or (j) and any fees and expenses related thereto. The proceeds
of the Revolving Credit Loans, the Swing Line Loans and the Letters of Credit
shall be used for working capital needs and general corporate purposes of the
Borrower and its Subsidiaries in the ordinary course of business.
4.17 Environmental Matters.
---------------------
(a) The facilities and properties owned, leased or operated by the
Company or any of its Subsidiaries (the "Real Properties") do not contain,
---------------
and have not previously contained, any Materials of Environmental Concern
in amounts or concentrations or under circumstances which (i) constitute or
constituted a violation of, or (ii) could give rise to liability under, any
Environmental Law, except in either case insofar as such violation or
liability, or any aggregation thereof, could not reasonably be expected to
result in the payment of a Material Environmental Amount.
(b) The Real Properties and all operations at the Real Properties are
in material compliance, and have in the last five years been in material
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Real Properties or violation of any
Environmental Law with respect to the Real Properties or the business
operated by the Company or any of its Subsidiaries (the "Business") which
--------
could materially interfere with the continued operation of the Real
Properties or materially impair the fair saleable value thereof. Neither
the Company nor any of its Subsidiaries has assumed any liability of any
other Person under Environmental Laws.
(c) Neither the Company nor any of its Subsidiaries has received or
is aware of any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the Real
Properties or the Business, nor does the Company or
44
the Borrower have knowledge or reason to believe that any such notice will
be received or is being threatened, except insofar as such notice or
threatened notice, or any aggregation thereof, does not involve a matter or
matters that could reasonably be expected to result in the payment of a
Material Environmental Amount.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Real Properties in violation of, or in a manner or to
a location which could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Real Properties in
violation of, or in a manner that could give rise to liability under, any
applicable Environmental Law, except insofar as any such violation or
liability referred to in this paragraph, or any aggregation thereof, could
not reasonably be expected to result in the payment of a Material
Environmental Amount.
(e) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Company and the Borrower,
threatened, under any Environmental Law to which the Company or any of its
Subsidiary is or will be named as a party with respect to the Real
Properties or the Business, nor are there any consent decrees or other
decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental
Law with respect to the Real Properties or the Business, except insofar as
such proceeding, action, decree, order or other requirement, or any
aggregation thereof, could not reasonably be expected to result in the
payment of a Material Environmental Amount.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Real Properties, or arising from or
related to the operations of the Company or any of its Subsidiaries in
connection with the Real Properties or otherwise in connection with the
Business, in violation of or in amounts or in a manner that could give rise
to liability under Environmental Laws, except insofar as any such violation
or liability referred to in this paragraph, or any aggregation thereof,
could not reasonably be expected to result in the payment of a Material
Environmental Amount.
4.18 Accuracy of Information, etc. No statement or information
----------------------------
(other than the projections and the pro forma financial information described in
--- -----
the immediately following sentence) contained in this Agreement, any other Loan
Document, the Confidential Information Memorandum or any other document,
certificate or statement furnished to the Administrative Agent or the Lenders or
any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents taken as
a whole, contained as of the date such statement, information, document or
certificate was so furnished (or, in the case of the Confidential Information
Memorandum, as of the Closing Date), any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
contained herein or therein not misleading. The projections and pro forma
--- -----
financial information contained in the materials referenced above are based upon
good faith estimates and assumptions believed by management of the Borrower to
be reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as fact
and that actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. As of the date hereof, the
45
representations and warranties contained in the Transaction Agreement are true
and correct in all material respects. There is no fact known to any Loan Party
that could reasonably be expected to have a Material Adverse Effect that has not
been expressly disclosed herein, in the other Loan Documents, in the
Confidential Information Memorandum or in any other documents, certificates and
statements furnished to the Administrative Agent and the Lenders for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
4.19 Security Documents. The Guarantee and Collateral Agreement is
------------------
effective to create in favor of the Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. When financing statements in
appropriate form are filed in the offices specified on Schedule 4.19(a), the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on,
and security interest in, all right, title and interest of the Loan Parties in
the Collateral and the proceeds thereof, as security for the Obligations (as
defined in the Guarantee and Collateral Agreement), in each case prior and
superior in right to any other Person (other than Liens permitted by Section
7.3).
4.20 Solvency. Each Loan Party is, and after giving effect to the
--------
Transaction and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 Senior Indebtedness. The Obligations constitute "Senior
-------------------
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the
Guarantee and Collateral Agreement constitute "Guarantor Senior Indebtedness" of
such Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extension of Credit. The agreement of each
-----------------------------------------
Lender to make the initial extension of credit requested to be made by it is
subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
--------------
this Agreement, executed and delivered by a duly authorized officer of the
Company and (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the Company and each Subsidiary
Guarantor.
(b) Transaction, etc. The following transactions shall have been
----------------
consummated, in each case on terms and conditions reasonably satisfactory
to the Lenders:
(i) DI Acquisition shall be merged into the Company and,
as a result of such merger (A) the Xxxx Investors shall own not less
than 52% of the issued and outstanding capital stock of the Company,
and (B) the Company shall have redeemed approximately 90% of its
issued and outstanding capital stock (collectively with all other
transactions in connection therewith including the financing thereof,
the "Transaction"), all pursuant to the Transaction Documents and in
-----------
form and substance consistent with the terms previously
46
disclosed to the Administrative Agent in writing and on other terms
reasonably satisfactory to the Administrative Agent; and
(ii) The Company shall have (A) at least $86,500,000 of
equity (valued at the Transaction value), of which at least
$48,500,000 shall be in the form of cash equity from DI Acquisition,
(B) received $55,000,000 in gross cash proceeds from the issuance of
the Company Zeros or bridge financing in temporary substitution
therefor and (C) received $85,000,000 in gross cash proceeds from the
issuance of the Senior Subordinated Notes or bridge financing in
temporary substitution therefor.
(c) Pro Forma Balance Sheets; Financial Statements. The Lenders
----------------------------------------------
shall have received (i) the Pro Forma Balance Sheets, (ii) audited
consolidated financial statements of the Company for the 1996, 1995 and
1994 fiscal years and (iii) unaudited interim consolidated and
consolidating financial statements of the Company for each fiscal month and
quarterly period ended subsequent to the date of the latest applicable
financial statements delivered pursuant to clause (ii) of this paragraph as
to which such financial statements are available, and such financial
statements shall not, in the reasonable judgment of the Lenders, reflect
any material adverse change in the consolidated financial condition of the
Company, as reflected in the financial statements or projections previously
distributed by the Company to the Administrative Agent or the Lenders in
writing or which are contained in the Confidential Information Memorandum.
(d) Capitalization. The capitalization and structure of each Loan
--------------
Party after giving effect to the Transaction shall be consistent with the
capitalization and structure previously disclosed to the Lenders in
writing.
(e) Payment of Outstanding Indebtedness. All outstanding
-----------------------------------
Indebtedness of the Company or any of its Subsidiaries for borrowed money
or Guarantee Obligations in respect thereof (other than the Indebtedness
described in Section 7.2(e) and the capital lease with respect to the
Borrower's principal manufacturing facility, all of which shall be
permitted to remain outstanding after the Closing Date) shall be paid off
in full on terms reasonably satisfactory to the Administrative Agent on or
prior to the Closing Date.
(f) Lien Searches. The Administrative Agent shall have received the
-------------
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Company or its Subsidiaries except for liens
permitted by Section 7.3 and liens to be discharged on or prior to the
Closing Date pursuant to documentation reasonably satisfactory to the
Administrative Agent.
(g) Closing Certificate. The Administrative Agent shall have
-------------------
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.
(h) Legal Opinions. The Administrative Agent shall have received the
--------------
following executed legal opinions:
47
(i) the legal opinion of Ropes & Xxxx, counsel to the
Company and its Subsidiaries, substantially in the form of Exhibit E;
(ii) to the extent consented to by the relevant counsel,
each legal opinion, if any, delivered in connection with the
Transaction Agreement, accompanied by a reliance letter in favor of
the Lenders; and
(iii) the legal opinion of local counsel in California and
of such other special and local counsel as may be required by the
Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(i) Filings, Registrations and Recordings. Each document (including,
-------------------------------------
without limitation, any Uniform Commercial Code financing statement)
required by the Security Documents or under law or reasonably requested by
the Administrative Agent to be filed, registered or recorded in order to
create in favor of the Administrative Agent, for the benefit of the
Lenders, a perfected Lien on the Collateral described therein, prior and
superior in right to any other Person (other than with respect to Liens
expressly permitted by Section 7.3), shall be in proper form for filing,
registration or recordation.
(j) Solvency Opinion. The Administrative Agent shall have received a
----------------
satisfactory solvency opinion from Xxxxxx, Xxxxxx & Co. which shall
document the solvency of the Company and its Subsidiaries on a consolidated
basis after giving effect to the Transaction, the financing thereof and the
other transactions contemplated hereby.
(k) Insurance. The Administrative Agent shall have received
---------
insurance certificates satisfying the requirements of Section 5.2 of the
Guarantee and Collateral Agreement.
(l) Transaction Documents. The Company and its Subsidiaries and
---------------------
Affiliates (i) shall not be in breach or violation of any of their
obligations under the Transaction Documents and (ii) shall not be subject
to any Requirements of Law or Contractual Obligations that would be
violated by the Transaction and none of the provisions of any of the
Transaction Documents shall have been amended, modified or waived in any
material respect without the written consent of the Administrative Agent.
(m) Funded Debt to Consolidated EBITDA. The Administrative Agent
----------------------------------
shall be satisfied that the ratio of (i) the total amount of Funded Debt of
the Borrower and its Subsidiaries (other than the Company Interim Credit
Facility) outstanding on the Closing Date to (ii) the amount of pro forma
--- -----
Consolidated EBITDA of the Borrower and its Subsidiaries for the latest
twelve month period ended prior to the Closing Date for which relevant
financial information is available shall not be greater than 5.80 to 1.0,
and the Borrower shall provide support for such calculation which is
reasonably satisfactory to the Administrative Agent (giving consideration,
among other factors, to the requirements of Regulation S-X of the
Securities Act).
48
5.2 Conditions to Each Extension of Credit. The agreement of each
--------------------------------------
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
------------------------------
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct on and as of such date as if made on and as of
such date.
(b) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
(c) Subsequent Term Loans. With respect to any borrowing of
---------------------
Acquisition Term Loans, (i) the proceeds of such Acquisition Term Loans
shall be utilized by the Borrower to pay the consideration for an
acquisition of all or substantially all of the Capital Stock or assets of
any Person or business unit of a Person permitted pursuant to Section
7.8(i) or (j) and any fees and expenses relating to such acquisition, (ii)
such acquisition shall be consummated on the Borrowing Date with respect to
such Acquisition Term Loans and (iii) after giving effect to the making of
such Acquisition Term Loans and the consummation of the related
acquisition, the Consolidated Leverage Ratio of the Borrower and its
Subsidiaries shall be not greater than 5.5 to 1.0 and the Consolidated
Interest Coverage Ratio of the Company and its Subsidiaries shall be not
less than 1.75 to 1.0 (with each such ratio being calculated on a pro forma
basis, as if such borrowing and acquisition had occurred on the first day
of the relevant fiscal period and as if the interest rate applicable to
such Acquisition Term Loans throughout such period was the rate in effect
on the requested Borrowing Date for Acquisition Term Loans which are
Eurodollar Loans; provided that, in the event that the borrowing date for
--------
such Acquisition Term Loans occurs prior to the date upon which the
financial statements for the fiscal year ending December 31, 1997 have been
delivered pursuant to subsection 6.1(a), each of Consolidated EBITDA and
Consolidated Interest Expense shall be determined for purposes of this
clause (c) only based upon the Borrower's good faith estimate thereof for
such fiscal year).
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Company and the Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, each of the Company and the Borrower shall and
shall cause each of its Subsidiaries to:
6.1 Financial Statements. Furnish to the Administrative Agent for
--------------------
distribution to each of the Lenders:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Company and the Borrower, a copy of the
audited consolidated balance sheet of the Company and its consolidated
Subsidiaries and the Borrower and
49
its consolidated Subsidiaries as at the end of such year and the related
audited consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year, reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the audit, by Price
Waterhouse LLP or other independent certified public accountants of
nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Company and the Borrower, the unaudited consolidated balance
sheet of the Company and its consolidated Subsidiaries and the Borrower and
its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated in all
material respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 30 days
after the end of each month occurring during each fiscal year of the
Company and the Borrower (other than the third, sixth, ninth and twelfth
such month), the unaudited consolidated balance sheets of the Company and
its consolidated Subsidiaries and the Borrower and its consolidated
Subsidiaries as at the end of such month and the related unaudited
consolidated statements of income and of cash flows for such month and the
portion of the fiscal year through the end of such month, setting forth in
each case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material respects
(subject to normal year-end audit adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except (x) as approved by such accountants or officer, as the case may
be, and disclosed therein and (y) in the case of the financial statements
delivered pursuant to clauses (b) and (c) above, for the absence of footnotes).
6.2 Certificates; Other Information. Furnish to the Administrative
-------------------------------
Agent for distribution to each of the Lenders, or, in the case of clause (g), to
the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default under the financial covenants set forth in
Section 7.1, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, each Loan
Party during such period has in all material respects observed or performed
all of its covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to which it is a
party to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event of
50
Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information necessary for determining compliance by the
Company and its Subsidiaries with the provisions of this Agreement referred
to therein as of the last day of the fiscal quarter or fiscal year of the
Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a listing of any county or state
within the United States where any Loan Party keeps inventory or equipment
and of any Intellectual Property acquired by any Loan Party since the date
of the most recent list delivered pursuant to this clause (y) (or, in the
case of the first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 45 days
after the end of each fiscal year of the Borrower, a detailed consolidated
budget for the then-current fiscal year (including a projected consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such
then-current fiscal year, and the related consolidated statements of
projected cash flow, projected changes in financial position and projected
income), and, as soon as available, significant revisions, if any, of such
budget and projections with respect to such fiscal year (collectively, the
"Projections"), which Projections shall in each case be accompanied by a
-----------
certificate of a Responsible Officer stating that such Projections are
based on reasonable estimates, information and assumptions and that such
Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the portion
of the Projections covering such periods and to the comparable periods of
the previous year;
(e) no later than 3 Business Days prior to the effectiveness thereof
(or, to the extent that the consent of all or any portion of the Lenders is
required hereunder in connection with such amendment, supplement, waiver or
modification, no later than 10 Business Days prior to the effectiveness
thereof), copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Company
Indenture, the Senior Subordinated Note Indenture or the Transaction
Agreement;
(f) within five days after the same are sent, copies of all financial
statements and reports which the Company or the Borrower sends to the
holders of any class of its debt securities or public equity securities and
within five days after the same are filed, copies of all financial
statements and reports which the Company or the Borrower may make to, or
file with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority; and
(g) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in
51
good faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of the Company or its
Subsidiaries, as the case may be.
6.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
------------------------------------------------------
Continue to engage in business of the same general type as now conducted by it,
(ii) preserve, renew and keep in full force and effect its corporate existence
and (iii) take all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business, except,
in each case, as otherwise permitted by Section 7.4 and except, in the case of
clause (iii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 Maintenance of Property; Insurance. (a) Keep all Property
---------------------------------------
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its Property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
6.6 Inspection of Property; Books and Records; Discussions. (a)
------------------------------------------------------
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit, upon two Business Days' prior notice to the chief financial officer or
other Responsible Officer of the Company or the Borrower (except when a Default
or Event of Default has occurred and is continuing, in which case, no notice
shall be required), representatives of any Lender to visit and inspect any of
its properties and examine and make abstracts from any of its books and records
at any reasonable time and as often as may reasonably be desired and to discuss
the business, operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants; provided
--------
that all such visits and inspections shall be coordinated through the
Administrative Agent.
6.7 Notices. Promptly give notice to the Administrative Agent and
-------
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any litigation, investigation or proceeding which may exist at
any time affecting the Company or any of its Subsidiaries which, if
adversely determined, could reasonably be expected to have a Material
Adverse Effect;
(c) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to
make any required contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other
52
action by the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the termination,
Reorganization or Insolvency of, any Plan; and
(d) any development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Company or the relevant Subsidiary of the
Company proposes to take with respect thereto.
6.8 Environmental Laws. (a) Comply in all material respects with,
------------------
and ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 Interest Rate Protection. In the case of the Borrower, within 60
------------------------
days after the Closing Date, enter into Interest Rate Protection Agreements to
the extent necessary to provide that at least 50% of the aggregate principal
amount of the Senior Subordinated Notes and the Term Loans is subject to either
a fixed interest rate or interest rate protection for a period of not less than
three years, which Interest Rate Protection Agreements shall have terms and
conditions reasonably satisfactory to the Administrative Agent.
6.10 Additional Collateral, etc. (a) With respect to any Property
--------------------------
acquired after the Closing Date by the Company or any of its Subsidiaries (other
than (x) any Property described in paragraph (b), (c) or (d) below and (y) any
Property subject to a Lien expressly permitted by Section 7.3(g)) as to which
the Administrative Agent, for the benefit of the Lenders, does not have a
perfected Lien, promptly (i) execute and deliver to the Administrative Agent
such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable in order to
grant to the Administrative Agent, for the benefit of the Lenders, a security
interest in such Property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in such Property, including without limitation,
the filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as may
be requested by the Administrative Agent.
(b) With respect to any fee interest in any real estate having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by the Company or any of its Subsidiaries (other than any such
real estate subject to a Lien expressly permitted by Section 7.3(g)), promptly
upon request of the Administrative Agent or the Required Lenders (i) execute and
deliver a first priority mortgage or deed of trust, as the case may be, in favor
of the Administrative Agent, for the benefit of the Lenders, covering such real
estate, in form and substance reasonably satisfactory to the Administrative
Agent,
53
(ii) if requested by the Administrative Agent, provide the Lenders with (x)
title and extended coverage insurance covering such real estate in an amount at
least equal to the purchase price of such real estate (or such other amount as
shall be reasonably specified by the Administrative Agent) as well as a current
ALTA survey thereof, together with a surveyor's certificate and (y) any consents
or estoppels reasonably deemed necessary or advisable by the Administrative
Agent in connection with such mortgage or deed of trust, each of the foregoing
in form and substance reasonably satisfactory to the Administrative Agent and
(iii) if requested by the Administrative Agent, deliver to the Administrative
Agent legal opinions relating to the matters described above, which opinions
shall be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by the Company
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary) or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable in order to grant to the Administrative Agent, for
the benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Company or any of its
Subsidiaries, (ii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement and (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Lenders a
perfected first priority security interest in the Collateral described in the
Guarantee and Collateral Agreement with respect to such new Subsidiary,
including, without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be requested by the Administrative
Agent, and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Company or any of its Subsidiaries,
promptly (i) execute and deliver to the Administrative Agent such amendments to
the Guarantee and Collateral Agreement as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary which is owned by the Company or any of its
Subsidiaries (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), and (ii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
SECTION 7. NEGATIVE COVENANTS
The Company and the Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or the
Administrative Agent hereunder, each of the Company and the Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly:
54
7.1 Financial Condition Covenants.
-----------------------------
(a) Consolidated Leverage Ratio. Permit the Consolidated Leverage
---------------------------
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending during any period set forth below to exceed the ratio set
forth below opposite such period:
Consolidated
Period Leverage Ratio
------ --------------
Closing Date through December 30, 1998 6.25 to 1.0
December 31, 1998 through December 30, 1999 5.75 to 1.0
December 31, 1999 through December 30, 2000 5.00 to 1.0
December 31, 2000 through December 30, 2001 4.25 to 1.0
December 31, 2001 through December 30, 2002 3.50 to 1.0
December 31, 2002 through December 30, 2003 3.00 to 1.0
December 31, 2003 through thereafter 2.75 to 1.0
(b) Consolidated Interest Coverage Ratio. Permit the Consolidated
------------------------------------
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending during any period set forth below to be less than the ratio
set forth below opposite such period:
Consolidated Interest
Period Coverage Ratio
------ ---------------------
Closing Date through December 30, 1998 1.60 to 1.0
December 31, 1998 through December 30, 1999 1.70 to 1.0
December 31, 1999 through December 30, 2000 1.85 to 1.0
December 31, 2000 through December 30, 2001 2.25 to 1.0
December 31, 2001 through December 30, 2002 2.50 to 1.0
December 31, 2002 through December 30, 2003 2.75 to 1.0
December 31, 2003 through thereafter 2.00 to 1.0
(c) Consolidated Fixed Charge Coverage Ratio. Permit the
----------------------------------------
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters (commencing with the period of four consecutive fiscal quarters
ending on December 31, 1998) of the Borrower to be less than 1.05 to 1.0.
(d) Minimum EBITDA. Permit Consolidated EBITDA for any fiscal year
--------------
set forth below to be less than the amount set forth opposite such fiscal year:
Consolidated
Fiscal Year EBITDA
----------- ------------
1997 $30,000,000
1998 32,000,000
1999 35,000,000
2000 38,500,000
2001 42,500,000
2002 45,000,000
55
2003 45,000,000
2004 45,000,000
7.2 Limitation on Indebtedness. Create, incur, assume or suffer to
--------------------------
exist (in each case, to "Incur") any Indebtedness, except:
-----
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any Wholly
Owned Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Indebtedness secured by Liens permitted by Section 7.3(g) in an
aggregate principal amount not to exceed $2,000,000 at any one time
outstanding;
(d) Capital Lease Obligations with respect to the Borrower's
principal manufacturing facility and the equipment located therein in an
aggregate principal amount not to exceed $6,600,000 at any one time
outstanding and other Capital Lease Obligations in an aggregate principal
amount not to exceed $5,000,000 at any one time outstanding;
(e) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(e) and any refinancings, refundings, renewals or extensions
thereof (without any increase in the principal amount thereof);
(f) guarantees made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of any Wholly Owned
Subsidiary Guarantor;
(g) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$110,000,000 and (ii) Indebtedness of the Company in respect of the Company
Zeros in an aggregate, unaccreted principal amount not to exceed
$60,100,000;
(h) Indebtedness of the Company evidenced by the increase in the
principal amount of the Company Zeros in connection with the payment in
kind of interest thereon prior to the fifth anniversary of the Closing
Date;
(i) Indebtedness of a Person which becomes a Subsidiary after the
date hereof; provided, that (i) such Indebtedness existed at the time such
--------
Person became a Subsidiary and was not created in anticipation of the
acquisition and (ii) such Indebtedness was not created in contemplation of
such Person becoming a Subsidiary;
(j) Indebtedness of the Borrower and its Subsidiaries on account of
the deferred purchase price for acquisitions of Capital Stock and assets
permitted pursuant to Section 7.8;
(k) guarantees made by Subsidiaries of the Borrower on account of the
Senior Subordinated Notes; provided, that such guarantees are subordinated
--------
to the obligations of such Subsidiaries under the Guarantee and Collateral
Agreement and the other Security Documents upon terms satisfactory to the
Administrative Agent; and
56
(l) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $10,000,000 at any one time outstanding.
7.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
--------
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 30 days or which are being contested
in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(e) Liens in existence on the date hereof listed on Schedule 7.3(e),
securing Indebtedness permitted by Section 7.2(e), provided that no such
--------
Lien is spread to cover any additional Property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(c) to finance the acquisition
of fixed or capital assets, provided that (i) such Liens shall be created
--------
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any Property other than
the Property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any Subsidiary in the ordinary course of its business and
covering only the assets so leased (including, without limitation, with
respect to the capital leases of the Borrower's principal manufacturing
facility and related equipment and covering only such facility and related
equipment); and
57
(j) Liens not otherwise permitted by this Section 7.3 so long as
neither (i) the aggregate principal amount of the obligations secured
thereby nor (ii) the aggregate fair market value (determined as of the date
such Lien is incurred) of the assets subject thereto exceeds (as to the
Borrower and all Subsidiaries) $2,000,000 at any one time outstanding.
7.4 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of, all or substantially all
of its Property or business, or make any material change in its present method
of conducting business, except:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (provided that the Borrower shall be the continuing or
--------
surviving corporation) or with or into any Wholly Owned Subsidiary
Guarantor (provided that the Wholly Owned Subsidiary Guarantor shall be the
--------
continuing or surviving corporation);
(b) the Borrower or any of its Subsidiaries may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower or
any Wholly Owned Subsidiary Guarantor; and
(c) any Person may be merged or consolidated with or into the
Borrower or any of its Subsidiaries pursuant to an investment permitted
subsection 7.8(i) or (j) (provided that the Borrower or the applicable
--------
Subsidiary shall be the continuing or surviving corporation).
7.5 Limitation on Sale of Assets. Dispose of any of its Property or
----------------------------
business (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of property or assets that are no longer used or
useful in the ordinary course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Wholly Owned Subsidiary Guarantor;
(e) the Borrower and its Subsidiaries may, in the ordinary course of
business, license Intellectual Property to third Persons and to one
another, so long as each such license does not otherwise prohibit the
granting of a Lien by the Borrower or any of its Subsidiaries pursuant to
the Security Documents in the Intellectual Property which is the subject of
such license; and
(f) the sale of other assets having a fair market value not to exceed
$5,000,000 in the aggregate for any fiscal year of the Borrower.
58
7.6 Limitation on Dividends. Declare or pay any dividend (other than
-----------------------
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any shares of any class of Capital Stock of the Borrower or any
of its Subsidiaries or any warrants or options to purchase any such Capital
Stock, whether now or hereafter outstanding, or make any other distribution in
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of the Borrower or any of its Subsidiaries (collectively,
"Restricted Payments"), except that:
--------------------
(a) any Subsidiary may make Restricted Payments to the Borrower or
any Wholly Owned Subsidiary Guarantor;
(b) any payments made to the former shareholders of the Company
pursuant to Section 1.11 of the Transaction Agreement;
(c) payments made on or before the Closing Date in respect of the
redemption of Capital Stock of the Company held by existing shareholders in
connection with the merger of DI Acquisition into the Company;
(d) so long as no Default or Event of Default shall have occurred and
be continuing, the Borrower may pay dividends to the Company to permit the
Company to (i) purchase the Company's common stock or common stock options
from present or former officers or employees of the Company or any of its
Subsidiaries upon the death, disability or termination of employment of
such officer or employee, provided, that the aggregate amount of payments
--------
under this clause (i) shall not exceed $2,000,000 during any fiscal year of
the Borrower and $5,000,000 during the term of this Agreement, net, in any
case, of any proceeds received by the Company and contributed to the
Borrower in connection with resales of any common stock or common stock
options so purchased during the relevant period and (ii) pay management
fees to Xxxx Capital and Xxxx Affiliates expressly permitted by Section
7.10(iii); and
(e) the Borrower may pay dividends to the Company to permit the
Company to (i) pay corporate overhead expenses incurred in the ordinary
course of business not to exceed $250,000 in any fiscal year, (ii) pay any
taxes which are due and payable by the Company and the Borrower as part of
a consolidated group, (iii) pay fees and expenses (other than to
Affiliates) relating to the Company Zeros and (v) beginning in fiscal year
2002, pay interest in cash on the Company Zeros.
7.7 Limitation on Capital Expenditures. Make or commit to make (by
----------------------------------
way of the acquisition of securities of a Person or otherwise) any Capital
Expenditure, except Capital Expenditures of the Borrower and its Subsidiaries in
the ordinary course of business not
59
exceeding in any fiscal year of the Borrower the amount set forth below opposite
such fiscal year (the "Base CapEx Amount") plus the then unused Permitted
----------------- ----
Expenditure Amount:
Fiscal Year Base CapEx Amount
----------- -----------------
Closing Date through December 31, 1997 $3,000,000
1998 $7,500,000
1999 $7,500,000
2000 $7,500,000
2001 $8,500,000
2002 $8,500,000
2003 $9,500,000
2004 $9,500,000
; provided, that (i) up to 50% of the Base CapEx Amount not expended in the
----------
fiscal year for which it is permitted may be carried over for expenditure in the
next succeeding fiscal year, and (ii) Capital Expenditures made during any
fiscal year shall be deemed made, first, in respect of the Base CapEx Amount
-----
permitted for such fiscal year as provided above and, second, in respect of any
------
portion of such Base CapEx Amount carried over from the prior fiscal year
pursuant to subclause (i) above; provided, further, that notwithstanding the
-------- -------
foregoing, the Borrower and its Subsidiaries may make Capital Expenditures
(which Capital Expenditures shall not be included in the amount of Capital
Expenditures permitted to be made pursuant to this Section 7.7 without giving
effect to this second proviso) with Reinvestment Deferred Amounts.
7.8 Limitation on Investments, Loans and Advances. Make any advance,
---------------------------------------------
loan, extension of credit (by way of guaranty or otherwise) or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting all or a material part of a business
unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Company and its
Subsidiaries in the ordinary course of business (including, without
limitation, for travel, entertainment and relocation expenses) in an
aggregate amount for the Company and its Subsidiaries not to exceed
$500,000 at any one time outstanding;
(e) (i) the Company may acquire and hold obligations of one or more
officers or other employees of the Company or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of the Company so long as no cash is paid by the Company or
any of its Subsidiaries in connection with the acquisition of any such
obligations, (ii) the Borrower may lend up to $500,000 in an aggregate
principal amount at any one time outstanding to officers and employees of
the Company and its Subsidiaries on or after the date on which any such
officers and employees exercise their options to purchase common stock of
the Company issued to them in connection with the Transaction so long as
the proceeds of such loans are promptly used by such officers and employees
to pay taxes payable by them as a result of such exercise and (iii)
investments consisting of loans by the Borrower or its
60
Subsidiaries to employees of the Company or its Subsidiaries, not exceeding
(x) $650,000 for loans made in connection with the Transaction and (y)
$1,000,000 for loans made after the Closing Date, in each case, in
aggregate principal amount at any time outstanding and made solely for the
purpose of funding purchases by such employees of common stock of the
Company;
(f) the Transaction;
(g) deposits made in the ordinary course of business consistent with
past practices to secure the performance of leases;
(h) investments by the Company or any of its Subsidiaries in the
Borrower or any Person that, prior to such investment, is a Wholly Owned
Subsidiary Guarantor;
(i) the Borrower and its Subsidiaries may acquire all or
substantially all of the Capital Stock or assets of any Person or business
unit of a Person; provided that (i) no Default or Event of Default has
--------
occurred and is continuing or would result therefrom, (ii) the Company
would have been in compliance, on a pro forma basis, with each of the
financial covenants contained in Section 7.1 if such acquisition had been
made on the first day of the most recently completed period of calculation
thereof, (iii) the aggregate consideration (including the aggregate
principal amount of Indebtedness which is assumed or guaranteed, the
aggregate amount of any deferred consideration and the fair market value of
any non-cash consideration) paid on account of all such acquisitions which
are consummated after the Closing Date does not exceed the sum of
$30,000,000 and the then unused Permitted Expenditure Amount; and
(j) in addition to investments otherwise expressly permitted by this
Section 7.8, investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost, but net of returns of capital from such
investments) not to exceed during the term of this Agreement the sum of
$5,000,000 and the then unused Permitted Expenditure Amount on the date
upon which such investment is made.
7.9 Limitation on Optional Payments and Modifications of Debt
---------------------------------------------------------
Instruments, etc. (a) Make or offer to make any payment, prepayment,
-----------------
repurchase or redemption of or otherwise defease or segregate funds with respect
to the Senior Subordinated Notes or the Company Zeros (other than scheduled
interest payments required to be made in cash), (b) amend, modify, waive or
otherwise change, or consent or agree to any amendment, modification, waiver or
other change to, any of the terms of the Senior Subordinated Notes, the Senior
Subordinated Note Indenture, the Company Zeros or the Company Indenture (other
than any such amendment, modification, waiver or other change which (i) would
extend the maturity or reduce the amount of any payment of principal thereof or
which would reduce the rate or extend the date for payment of interest thereon
or (ii) is not adverse in any respect to the interests of the Lenders in the
reasonable opinion of the Administrative Agent in its sole discretion) or (c)
designate any Indebtedness as "Designated Senior Indebtedness" for the purposes
of the Senior Subordinated Note Indenture.
7.10 Limitation on Transactions with Affiliates. Enter into any
------------------------------------------
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Company, the Borrower or any Wholly Owned Subsidiary Guarantor) unless such
transaction is (a) not otherwise prohibited under this Agreement and
61
(b) upon fair and reasonable terms no less favorable to the Company, the
Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate;
provided, that the following transactions shall not be prohibited:
--------
(i) the Transaction;
(ii) the payment to Xxxx Capital and/or Bain Affiliates of (A) one
time fees on or about the Closing Date in an aggregate amount (for all such
Persons taken together) not to exceed $3,100,000 (plus reasonable out-of-
pocket expenses incurred by such Persons in providing services to the
Company or the Borrower) and (B) in connection with any acquisition
consummated pursuant to Section 7.8(i) or (j), an additional fee in an
amount not to exceed 2% of the aggregate consideration paid by the Company
and its Subsidiaries on account of such acquisition;
(iii) so long as no Default or Event of Default shall have occurred
and is continuing, the payment, on a quarterly basis, of management fees to
Xxxx Capital and/or the Bain Affiliates in an aggregate amount (for all
such Persons taken together) not to exceed $250,000 in any fiscal quarter
of the Borrower; provided that the portion of such fee which accrued but
--------
was not payable during the existence and continuance of such Default or
Event of Default shall be permitted to be paid at such time as all Defaults
and Events of Default have been cured or waived; and
(iv) the reimbursement of Xxxx Capital and/or the Bain Affiliates for
their reasonable out-of-pocket expenses incurred by them in connection with
performing management services to the Borrower and its Subsidiaries.
Notwithstanding anything to the contrary contained in this Section 7.10, at no
time will the Company or any of its Subsidiaries make any payments to Xxxx
Capital and/or any of its Affiliates in an amount which would exceed that amount
permitted to be paid pursuant to the Senior Subordinated Note Indenture or the
Company Indenture at such time.
7.11 Limitation on Sales and Leasebacks. Enter into any arrangement
----------------------------------
with any Person providing for the leasing by the Company or any of its
Subsidiaries of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary.
7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year
---------------------------------------
of the Company or the Borrower to end on a day other than December 31 or change
the Company's or the Borrower's method of determining fiscal quarters.
7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to
-------------------------------------
exist or become effective any agreement which prohibits or limits the ability of
the Company or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its Property or revenues, whether now owned or
hereafter acquired, other than (a) this Agreement and the other Loan Documents
and (b) any agreements governing any purchase money Liens or Capital Lease
Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby).
62
7.14 Limitation on Restrictions on Subsidiary Distributions. Enter
------------------------------------------------------
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Borrower to (a) pay
dividends or make any other distributions in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Borrower or any
other Subsidiary of the Borrower, (b) make loans or advances to the Borrower or
any other Subsidiary of the Borrower or (c) transfer any of its assets to the
Borrower or any other Subsidiary of the Borrower, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Loan Documents and (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into in connection with
the Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary.
7.15 Limitation on Lines of Business. Enter into any business,
-------------------------------
either directly or through any Subsidiary, except for those businesses in which
the Borrower and its Subsidiaries are engaged on the date of this Agreement or
which are reasonably related thereto.
7.16 Limitation on Amendments to Transaction Documents. (a) Amend,
-------------------------------------------------
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the indemnities and licenses furnished to the Borrower or any of
its Subsidiaries pursuant to any of the Transaction Documents such that after
giving effect thereto such indemnities or licenses shall be materially less
favorable to the interests of the Loan Parties or the Lenders with respect
thereto or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Transaction Documents except to the extent that any such
amendment, supplement or modification could not reasonably be expected to have a
Material Adverse Effect.
7.17 Limitation on Activities of the Company. In the case of the
---------------------------------------
Company and notwithstanding anything to the contrary in this Agreement or any
other Loan Document, (a) conduct, transact or otherwise engage in, or commit to
conduct, transact or otherwise engage in, any business or operations other than
those incidental to its ownership of the Capital Stock of the Borrower, (b)
incur, create, assume or suffer to exist any Indebtedness or other liabilities
or financial obligations, other than (i) nonconsensual obligations imposed by
operation of law, (ii) pursuant to the Loan Documents to which it is a party,
(iii) the Company Zeros and the Company Indenture and (iv) obligations with
respect to its Capital Stock, or (c) own, lease, manage or otherwise operate any
properties or assets (including cash and Cash Equivalents), other than Capital
Stock of the Borrower and cash received in connection with dividends made by the
Borrower in accordance with Section 7.6 pending application in the manner
contemplated by said Section.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within three days after any such interest or other amount becomes
due in accordance with the terms hereof; or
63
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or which is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) Any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to the Company and the Borrower only) or in Section 7; or
(d) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
(to the extent that such default is susceptible of remedy) such default
shall continue unremedied for a period of 30 days after the earlier of (x)
the date upon which the Borrower knows or should reasonably be expected to
know of the existence of such default or (y) the date upon which the
Borrower receives notice of such event from the Administrative Agent or any
Lender; or
(e) The Company or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving
of notice if required, such Indebtedness to become due prior to its stated
maturity or (in the case of any such Indebtedness constituting a Guarantee
Obligation) to become payable; provided, that a default, event or condition
--------
described in clause (i), (ii) or (iii) of this paragraph (e) shall not at
any time constitute an Event of Default under this Agreement unless, at
such time, one or more defaults, events or conditions of the type described
in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred
and be continuing with respect to Indebtedness the outstanding principal
amount of which exceeds in the aggregate $1,000,000; or
(f) (i) The Company or any of its Material Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the Company or
any of its Material Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the
Company or any of its Material Subsidiaries any case, proceeding or other
action of a
64
nature referred to in clause (i) above which (A) results in the entry of an
order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against the Company or any of its Material
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof; or
(iv) the Company or any of its Material Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Company or any of its Material Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could, in the sole judgment of the Required Lenders, reasonably be expected
to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Company or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) A Change of Control or a Specified Change of Control shall occur;
or
65
(l) The Company shall cease to own directly 100% on a fully diluted
basis of the economic and voting interest in the Borrower's capital stock,
free of Liens except Liens created by the Guarantee and Collateral
Agreement; or
(m) The Senior Subordinated Notes shall cease, for any reason, to be
validly subordinated to the Obligations as provided in the Senior
Subordinated Note Indenture or any Loan Party, any Affiliate of any Loan
Party, the trustee in respect of the Senior Subordinated Notes or the
holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, any or all of the following actions may be taken:
(i) with the consent of the Majority Revolving Credit Facility Lenders, the
Administrative Agent may, or upon the request of the Majority Revolving Credit
Facility Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Credit Commitments to be terminated forthwith, whereupon
the Revolving Credit Commitments shall immediately terminate; (ii) with the
consent of the Majority Acquisition Term Loan Facility Lenders, the
Administrative Agent may, or upon the request of the Majority Acquisition Term
Loan Facility Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Acquisition Term Loan Commitments to be terminated forthwith,
whereupon the Acquisition Term Loan Commitments shall immediately terminate; and
(iii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. With
respect to all Letters of Credit with respect to which presentment for honor
shall not have occurred at the time of an acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in
this Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.
66
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent nor any
----------------------
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing result from its or such
Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 Reliance by Administrative Agent. The Administrative Agent shall
--------------------------------
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company or the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be
67
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender, the
Company or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that the Administrative Agent receives such a notice, the Administrative
Agent shall give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); provided that unless and until the Administrative Agent
--------
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly
----------------------------------------
acknowledges that neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates have made any
representations or warranties to it and that no act by the Administrative Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Administrative Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party which may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
---------------
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Company or the Borrower and without limiting the obligation of the Company
or the Borrower to do so), ratably according to their respective Revolving
Credit Percentages, Tranche A Term Loan
68
Percentages, Tranche B Term Loan Percentages and Acquisition Term Loan
Percentages in effect on the date on which indemnification is sought under this
Section 9.7 (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with such percentages immediately prior to such date),
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
--------
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements which result from the Administrative Agent's
gross negligence or willful misconduct. The Administrative Agent shall have the
right to deduct any amount owed to it by any Lender under this Section from any
payment made by it to such Lender hereunder. The agreements in this Section 9.7
shall survive the payment of the Loans and all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. The
-----------------------------------------------
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with any Loan Party as though the
Administrative Agent was not the Administrative Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
9.9 Successor Administrative Agent. The Administrative Agent may
------------------------------
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
approved by the Borrower (which approval shall not be unreasonably withheld or
delayed), whereupon such successor agent shall succeed to the rights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor agent effective upon such appointment and approval, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of
such former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
69
9.10 Authorization to Release Liens. The Administrative Agent is
------------------------------
hereby irrevocably authorized by each of the Lenders to release any Lien
covering any Property of the Company or any of its Subsidiaries that is the
subject of a Disposition which is permitted by this Agreement or which has been
consented to in accordance with Section 10.1.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any other Loan
----------------------
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
-------- -------
supplement or modification shall (i) forgive or reduce the principal amount or
extend the final scheduled date of maturity of any Loan, extend the scheduled
date of any amortization payment in respect of any Term Loan, reduce the stated
rate of any interest, fee or letter of credit commission payable hereunder or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Lender's Revolving Credit Commitment, in each
case without the consent of each Lender directly affected thereby; (ii) amend,
modify or waive any provision of this Section 10.1 or reduce any percentage
specified in the definition of Required Lenders or Required Prepayment Lenders,
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release all or
substantially all of the Collateral or release all or substantially all of the
Guarantors from their obligations under the Guarantee and Collateral Agreement,
in each case without the written consent of all Lenders; (iii) reduce the
percentage specified in the definition of Majority Facility Lenders without the
written consent of all Lenders under each affected Facility; (iv) amend, modify
or waive any provision of Section 9 without the written consent of the
Administrative Agent; (v) amend, modify or waive any provision of Section 2.6 or
2.7 without the written consent of the Swing Line Lender or (vi) amend, modify
or waive any provision of Section 3 without the written consent of the Issuing
Lender. Any such waiver and any such amendment, supplement or modification
shall apply equally to each of the Lenders and shall be binding upon the Loan
Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
10.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in
70
the case of telecopy notice, when received, addressed as follows in the case of
the Company and the Administrative Agent, and as set forth in an administrative
questionnaire delivered to the Administrative Agent in the case of the Lenders,
or to such other address as may be hereafter notified by the respective parties
hereto:
The Company: Details, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopy: (000) 000-0000
with copies to: Xxxx Capital, Inc.
Two Xxxxxx Xxxxx
0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx/Xxxxxxxx Xxxx/Xxxxx Xxxx
Telecopy: (000) 000-0000
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
Telecopy: (000) 000-0000
The Administrative Agent: The Chase Manhattan Bank
c/o The Loan and Agency Services Group
1 Chase Manhattan Plaza - 8th Floor
New York, New York, 10081
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
with a copy to: The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxx
Telecopy: (000) 000-0000
provided that any notice, request or demand to or upon the Administrative Agent
--------
or the Lenders shall not be effective until received.
10.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or
71
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder.
10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
-----------------------------
or reimburse the Administrative Agent for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to the Administrative Agent, (c) to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement, the other Loan Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "indemnitee") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents and
any such other documents, including, without limitation, any of the foregoing
relating to the use of proceeds of the Loans or the violation of, noncompliance
with or liability under, any Environmental Law applicable to the operations of
the Company or any of its Subsidiaries or any of the Properties (all the
foregoing in this clause (d), collectively, the "indemnified liabilities"),
provided, that the Borrower shall have no obligation hereunder to any indemnitee
--------
with respect to indemnified liabilities to the extent such indemnified
liabilities result from the gross negligence or willful misconduct of such
indemnitee. The agreements in this Section 10.5 shall survive repayment of the
Loans and all other amounts payable hereunder.
10.6 Successors and Assigns; Participations and Assignments. (a)
------------------------------------------------------
This Agreement shall be binding upon and inure to the benefit of the Company,
the Borrower, the Lenders, the Administrative Agent, all future holders of the
Loans and their respective successors and assigns, except that the Borrower may
not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in
accordance with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "Participant") participating interests
-----------
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes
72
under this Agreement and the other Loan Documents, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents. In no event shall any Participant under any such
participation have any right to approve any amendment or waiver of any provision
of any Loan Document, or any consent to any departure by any Loan Party
therefrom, except to the extent that such amendment, waiver or consent would
reduce the principal of, or interest on, the Loans or any fees payable
hereunder, or postpone the date of the final maturity of the Loans, in each case
to the extent subject to such participation. The Borrower agrees that if
amounts outstanding under this Agreement and the Loans are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under this Agreement, provided that, in purchasing such
--------
participating interest, such Participant shall be deemed to have agreed to share
with the Lenders the proceeds thereof as provided in Section 10.7(a) as fully as
if it were a Lender hereunder. The Borrower also agrees that each Participant
shall be entitled to the benefits of Sections 2.18, 2.19 and 2.20 with respect
to its participation in the Commitments and the Loans outstanding from time to
time as if it was a Lender; provided that, in the case of Section 2.19, such
--------
Participant shall have complied with the requirements of said Section and
provided, further, that no Participant shall be entitled to receive any greater
-------- -------
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable
--------
law, at any time and from time to time assign to any Lender or any affiliate or
Approved Fund thereof or, with the consent of the Borrower and the
Administrative Agent (which, in each case, shall not be unreasonably withheld or
delayed), to an additional bank, financial institution or other entity (an
"Assignee") all or any part of its rights and obligations under this Agreement
---------
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
D, executed by such Assignee and such Assignor (and, in the case of an Assignee
that is not then a Lender or an affiliate or Approved Fund thereof, by the
Borrower and the Administrative Agent) and delivered to the Administrative Agent
for its acceptance and recording in the Register; provided that no such
--------
assignment to an Assignee (other than any Lender or any affiliate or Approved
Fund thereof) shall be in an aggregate principal amount of less than $5,000,000
(other than in the case of an assignment of all of a Lender's interests under
this Agreement), unless otherwise agreed by the Borrower and the Administrative
Agent. Any such assignment need not be ratable as among the Facilities. Upon
such execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) 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 Lender hereunder
with a Commitment and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this Section 10.6, the consent of the Borrower
shall not be required, and, unless requested by the Assignee and/or the
Assignor, new Notes shall not be required to be executed and delivered
73
by the Borrower, for any assignment which occurs at any time when any of the
events described in Section 8 shall have occurred and be continuing.
(d) The Administrative Agent shall maintain at its address referred
to in Section 10.2 a copy of each Assignment and Acceptance delivered to it and
a register (the "Register") for the recordation of the names and addresses of
--------
the Lenders and the Commitments of, and the principal amount of the Loans owing
to, each Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, each other Loan
Party, the Administrative Agent and the Lenders shall treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in the case of an Assignee that is not then a
Lender or an affiliate or Approved Fund thereof, by the Borrower and the
Administrative Agent) together with payment to the Administrative Agent of a
registration and processing fee of $3,500, the Administrative Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) record the information
contained therein in the Register on the effective date determined pursuant
thereto; provided however, that no such fee shall be payable in the case of an
-------- -------
assignment to another Lender or an Affiliate or Approved Fund of a Lender; and
provided further that, in the case of contemporaneous assignments by a Lender to
-------- -------
more than one fund managed by the same investment advisor (which funds are not
then Lenders hereunder), only a single $3,500 such fee shall be payable for all
such contemporaneous assignments.
(f) (i) To the extent requested by any Lender, the Loans made by
such Lender shall be evidenced by a Note issued by the Borrower, substantially
in the form of Exhibit F-1, F-2, F-3, or F-4, as the case may be, payable to the
order of such Lender (or, in the case of any Alternative Note, payable to such
Lender or its registered assigns). Each Lender is hereby authorized to record,
on the schedule annexed to and constituting a part of the relevant Note,
information regarding the relevant Loans made by such Lender, and any such
recordation shall constitute prima facie evidence of the accuracy of the
----- -----
information so recorded, provided that the failure to make any such recordation
--------
or any error in such recordation shall not affect the Borrower's obligations
hereunder or under any Note. On or prior to the effective date of an Assignment
and Acceptance, the Borrower, at its own expense, shall, to the extent requested
by the Assignee, execute and deliver to the Administrative Agent, in exchange
for the relevant Notes, new Notes to the order of the Assignee and, if
applicable, the Assignor. Such new Notes shall be dated the Closing Date.
(ii) Any Non-U.S. Lender that could become completely exempt from
withholding of any tax, assessment or other charge or levy imposed by or on
behalf of the United States or any taxing authority thereof ("U.S. Taxes") in
----------
respect of payment of any Obligations due to such Non-U.S. Lender under this
Agreement if the Obligations were in registered form for U.S. federal income tax
purposes may request the Borrower (through the Administrative Agent), and the
Borrower agrees thereupon, to exchange any promissory note(s) evidencing such
Obligations for promissory note(s) substantially in the form of Exhibit F-3 or
F-4, as the case may be (each, an "Alternative Note"). Alternative Notes may
----------------
not be exchanged for promissory notes that are not Alternative Notes. Each Non-
U.S. Lender that holds Alternative Note(s) (an "Alternative Noteholder") (or, if
----------------------
such Alternative Noteholder is not the beneficial owner thereof, such beneficial
owner) shall deliver to the Borrower prior to or at the time such Non-U.S.
Lender becomes an Alternative Noteholder each of the forms and certifications
required by Section 2.19(b). An Alternative Note and the
74
Obligation(s) evidenced thereby may be assigned or otherwise transferred in
whole or in part only by registration of such assignment or transfer of such
Alternative Note and the Obligation(s) evidenced thereby on the Register (and
each Alternative Note shall expressly so provide). Any assignment or transfer
of all or part of such Obligation(s) and the Alternative Note(s) evidencing the
same shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Alternative Note(s) evidencing such Obligation(s),
duly endorsed by (or accompanied by a written instrument of assignment or
transfer duly executed by) the Alternative Noteholder thereof, and thereupon one
or more new Alternative Note(s) in the same aggregate principal amount shall be
issued to the designated Assignee(s). No assignment of an Alternative Note and
the Obligations evidenced thereby shall be effective unless it has been recorded
in the Register.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 10.6 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests, including, without limitation,
any pledge or assignment by a Lender of any Loan or Note to any Federal Reserve
Bank in accordance with applicable law.
10.7 Adjustments; Set-off. (a) Except to the extent that this
--------------------
Agreement provides for payments to be allocated to the Lenders under a
particular Facility, if any Lender (a "Benefitted Lender") shall at any time
-----------------
receive any payment of all or part of its Loans or the Reimbursement Obligations
owing to it, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans or the Reimbursement
Obligations owing to such other Lender, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan and/or of the Reimbursement
Obligations owing to each such other Lender, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
-------- -------
is thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Company or
the Borrower, any such notice being expressly waived by the Company and the
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the Company or the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the Company
or the Borrower. Each Lender agrees promptly to notify the Company, the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, provided that the failure to give such notice shall not affect
--------
the validity of such setoff and application.
75
10.8 Counterparts. This Agreement may be executed by one or more of
------------
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
10.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Company, the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
-------------
OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 Submission To Jurisdiction; Waivers. Each of the Company and
-----------------------------------
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Company or the Borrower, as the case may be at its address set forth in
Section 10.2 or at such other address of which the Administrative Agent
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 10.12 any special, exemplary, punitive or consequential
damages.
76
10.13 Acknowledgements. Each of the Company and the Borrower hereby
----------------
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Company or the Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents, and
the relationship between Administrative Agent and Lenders, on one hand, and
the Company and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Company, the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. THE COMPANY, THE BORROWER, THE
---------------------
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.15 Confidentiality. Each of the Administrative Agent and each
---------------
Lender agrees to use reasonable efforts to keep confidential all non-public
information provided to it by any Loan Party pursuant to this Agreement that is
designated by such Loan Party as confidential; provided that nothing herein
--------
shall prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any affiliate
of any Lender, (b) to any Participant or Assignee (each, a "Transferee") or
----------
prospective Transferee which agrees to comply with the provisions of this
Section 10.15, (c) to the employees, directors, agents, attorneys, accountants
and other professional advisors of such Lender or its affiliates, (d) upon the
request or demand of any Governmental Authority having jurisdiction over the
Administrative Agent or such Lender, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) which has been publicly disclosed other
than in breach of this Section 10.15, (h) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender, or (i)
in connection with the exercise of any remedy hereunder or under any other Loan
Document.
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
DETAILS HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxx
____________________________________
Name:
Title:
DETAILS, INC.
By: /s/ Xxxxxx X. Xxxxx
____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By: /s/ Xxxxxxxx Xxxxxxx Xx.
____________________________________
Name: Xxxxxxxx Xxxxxxx Xx.
Title: Vice President
STATE STREET BANK & TRUST COMPANY
By: /s/ Xxxx X. Xxxxxx
____________________________________
Name: Xxxx X. Xxxxxx
Title: Vice President,
High Technology
CITY NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxx
____________________________________
Name: Xxxxx X. Xxxxxx
Title: Vice President
IBJ XXXXXXXX BANK & TRUST COMPANY
By: /s/ Xxxx X. Xxxxxx
____________________________________
Name: Xxxx X. Xxxxxx
Title: Director
BANKBOSTON N.A.
By: /s/ Xxx X. Massimo
____________________________________
Name: Xxx X. Massimo
Title: Vice President
CRESCENT/MACH I PARTNERS, L.P.,
by: TCW Asset Management Company,
its Investment Manager
By: Xxxxxx X. Xxxxxxxx
____________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
MASSACHUSETTS MUTUAL LIFE
INSURANCE CO.
By: /s/ Xxxxxxxx X. Xxxxxx
____________________________________
Name: Xxxxxxxx X. Xxxxxx
Title: Managing Director
XXXXXXX XXXXX PRIME RATE PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P., as
Investment Advisor
By: /s/ Xxxxxxx X. Xxxxxxxx
_________________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Authorized Signatory
PILGRIM AMERICA PRIME RATE TRUST
By: /s/ Xxxxxx X. Xxxx
____________________________________
Name: Xxxxxx X. Xxxx
Title: Assistant Portfolio Manager
XXX XXXXXX AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Xxxxxxxx X. Xxxx
____________________________________
Name: Xxxxxxxx X. Xxxx
Title: Vice President
Annex A
-------
PRICING GRID FOR REVOLVING CREDIT LOANS, SWING LINE LOANS
TRANCHE A TERM LOANS, ACQUISITION TERM LOANS AND COMMITMENT FEES
====================================================================================================================================
Applicable Margin Applicable
Consolidated for Eurodollar Margin for ABR
Interest Consolidated Loans and Letters Loans and Swing Commitment
Coverage Ratio Leverage Ratio of Credit Line Loans Fee Rate
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
less than or equal to 2.00 to 1.0 greater than or equal to 5.00 to 1.0 2.50% 1.50% .50%
-----------------------------------------------------------------------------------------------------------------------------------
greater than 2.00 to 1.0 and less than 5.00 to 1.0 and 2.25% 1.25% .50%
less than or equal to 2.50 to 1.0 greater than or equal to 4.00 to 1.0
------------------------------------------------------------------------------------------------------------------------------------
greater than 2.50 to 1.0 and less than 4.00 to 1.0 and 2.00% 1.00% .50%
less than or equal to 3.00 to 1.0 greater than or equal to 3.00 to 1.0
------------------------------------------------------------------------------------------------------------------------------------
greater than 3.00 to 1.0 and less than 3.00 to 1.0 and 1.75% .75% .375%
less than or equal to 3.50 to 1.0 greater than or equal to 2.50 to 1.0
------------------------------------------------------------------------------------------------------------------------------------
greater than 3.50 to 1.0 less than 2.50 to 1.0 1.50% .50% .375%
====================================================================================================================================
Changes in the Applicable Margin with respect to Tranche A Term Loans,
Acquisition Term Loans or Revolving Credit Loans or in the Commitment Fee Rate
resulting from changes in the Consolidated Interest Coverage Ratio and the
Consolidated Leverage Ratio shall become effective on the date (the "Adjustment
----------
Date") on which financial statements are delivered to the Lenders pursuant to
----
Section 6.1 (but in any event not later than the 45th day after the end of each
of the first three quarterly periods of each fiscal year or the 90th day after
the end of each fiscal year, as the case may be) and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, if the
Administrative Agent or the Required Lenders so determine, the Consolidated
Interest Coverage Ratio and the Consolidated Leverage Ratio as at the end of the
fiscal period that would have been covered thereby shall for the purposes of
this definition be deemed to be less than 2.00 to 1 and greater than 5.00 to 1,
respectively. In addition, at all times while an Event of Default shall have
occurred and be continuing and the Administrative Agent or the Required Lenders
so determine, the Consolidated Interest Coverage Ratio and the Consolidated
Leverage Ratio shall for the purposes of this definition be deemed to be less
than 2.00 to 1 and greater than 5.00 to 1, respectively. If on any Adjustment
Date the Consolidated Interest Coverage Ratio and the Consolidated Leverage
Ratio would result in different Applicable Margins or Commitment Fee Rates, the
higher Applicable Margin or Commitment Fee Rate shall govern. Each
determination of the Consolidated Interest Coverage Ratio and the Consolidated
Leverage Ratio pursuant to this definition shall be made with respect to the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements.
SCHEDULE 1.1
------------
COMMITMENTS
-----------------------------------------
====================================================================================================
Tranche A Tranche B Acquisition Revolving
Term Loan Term Loan Term Loan Credit
Lender Commitment Commitment Commitment Commitment
====================================================================================================
The Chase Manhattan Bank $ 8,421,357.78 $18,500,000.00 $ 7,576,148.00 $ 9,091,376.00
----------------------------------------------------------------------------------------------------
State Street Bank & Trust Company $ 5,416,881.00 $ 4,355,963.00 $ 5,227,156.00
----------------------------------------------------------------------------------------------------
City National Bank $ 5,416,881.00 $ 4,355,963.00 $ 5,227,156.00
----------------------------------------------------------------------------------------------------
IBJ Xxxxxxxx Bank & Trust Company $ 5,416,881.00 $ 4,355,963.00 $ 5,227,156.00
----------------------------------------------------------------------------------------------------
BankBoston N.A. $ 5,416,881.00 $ 4,355,963.00 $ 5,227,156.00
----------------------------------------------------------------------------------------------------
Crescent/Mach I Partners, L.P. $ 1,000,000.00 $ 3,500,000.00
----------------------------------------------------------------------------------------------------
Massachusetts Mutual Life $ 7,000,000.00
Insurance Co.
----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx Prime Rate Portfolio $ 7,000,000.00
----------------------------------------------------------------------------------------------------
Pilgrim America Prime Rate Trust $ 7,000,000.00
----------------------------------------------------------------------------------------------------
Xxx Xxxxxx American Capital Prime $ 7,000,000.00
Rate Income Trust
----------------------------------------------------------------------------------------------------
TOTALS $31,088,881.78 $50,000,000.00 $25,000,000.00 $30,000,000.00
============== ============== ============== ==============
====================================================================================================
[Senior Credit Agreement]
Schedule 4.4
------------
Consents, Authorizations, Filings and Notices
---------------------------------------------
Governmental Consents
---------------------
South Coast Air Quality Management District Permit No. F4888.
South Coast Air Quality Management District Permit No. 4887
South Coast Air Quality Management District Permit No. R-D70705.
South Coast Air Quality Management District Permit No. D93387.
South Coast Air Quality Management District Permit No. D57085
South Coast Air Quality Management District Permit No. R-D69923.
South Coast Air Quality Management District Permit No. D93385.
South Coast Air Quality Management District Permit No. D93388.
South Coast Air Quality Management District Permit No. D93446.
South Coast Air Quality Management District Permit No. D72112.
South Coast Air Quality Management District Permit No. F4062.
South Coast Air Quality Management District Permit No. F4857.
South Coast Air Quality Management District Permit No. D93386.
South Coast Air Quality Management District Permit No. D93445.
South Coast Air Quality Management District Permit No. F4886.
South Coast Air Quality Management District Permit No. F4885.
South Coast Air Quality Management District Permit No. F4884.
County Sanitation Districts of Orange County, California Industrial Wastewater
Class I Permit No. 02-1-183.
Schedule 4.10
-------------
Taxes
-----
The Company has received written notice of a California sales tax audit for the
period beginning December 1994 and ending March 1997.
[Senior Credit Agreement]
Schedule 4.15
-------------
Subsidiaries
------------
The Company owns all of the outstanding capital stock of each of the following
companies:
Details Global Sales, Inc., a Virgin Islands corporation.
Details Europe Limited, a private limited company incorporated under the laws of
Great Britain.
[Senior Credit Agreement]
Schedule 4.19(a)
UCC Filing Jurisdictions
------------------------
1) State of California, Secretary of State
[Senior Credit Agreement]
Schedule 7.2(e)
Existing Indebtedness
---------------------
None
[Senior Credit Agreement]
Schedule 7.3(e)
Existing Liens
--------------
None