[EXECUTION COPY]
CREDIT AGREEMENT,
dated as of November 17, 1999,
among
WEEKLY READER CORPORATION
and
JLC LEARNING CORPORATION,
as the Borrowers,
WRC MEDIA INC. (formerly known as EAC II, INC.),
as a Guarantor,
VARIOUS FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent, the Lead Arranger and
the Sole Book Running Manager,
BANK OF AMERICA, N.A.,
as the Administrative Agent for the Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION, as the Documentation
Agent for the Lenders.
SECTION PAGE
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms......................................................................................4
1.2. Use of Defined Terms..............................................................................41
1.3. Cross-References..................................................................................41
1.4. Accounting and Financial Determinations...........................................................41
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
2.1. Commitments.......................................................................................41
2.1.1. Revolving Loan Commitment and Swing Line
Loan Commitment..............................................................................41
2.1.2. Letter of Credit Commitment.....................................................................42
2.1.3. Term Loan Commitment............................................................................43
2.2. Reduction of the Commitment Amounts...............................................................43
2.2.1. Optional........................................................................................43
2.2.2. Mandatory.......................................................................................43
2.3. Borrowing Procedures..............................................................................44
2.3.1. Borrowing Procedure.............................................................................44
2.3.2. Swing Line Loans................................................................................44
2.4. Continuation and Conversion Elections.............................................................45
2.5. Funding...........................................................................................46
2.6. Issuance Procedures...............................................................................46
2.6.1. Other Lenders' Participation....................................................................47
2.6.2. Disbursements; Conversion to Revolving
Loans........................................................................................47
2.6.3. Reimbursement...................................................................................48
2.6.4. Deemed Disbursements............................................................................48
2.6.5. Nature of Reimbursement Obligations.............................................................48
2.7. Register; Notes...................................................................................49
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SECTION PAGE
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application...........................................................51
3.1.1. Repayments and Prepayments......................................................................51
3.1.2. Application.....................................................................................56
3.1.3. Prepayment of Term B Loans......................................................................56
3.2. Interest Provisions...............................................................................57
3.2.1. Rates...........................................................................................57
3.2.2. Post-Default Rates..............................................................................57
3.2.3. Payment Dates...................................................................................57
3.3. Fees .............................................................................................58
3.3.1. Commitment Fee..................................................................................58
3.3.2. Agents' Fees....................................................................................59
3.3.3. Letter of Credit Fee............................................................................59
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful........................................................................59
4.2. Deposits Unavailable..............................................................................59
4.3. Increased LIBO Rate Loan Costs, etc...............................................................60
4.4. Funding Losses....................................................................................60
4.5. Increased Capital Costs...........................................................................61
4.6. Taxes.............................................................................................61
4.7. Payments, Computations, etc.......................................................................65
4.8. Sharing of Payments...............................................................................65
4.9. Setoff............................................................................................66
4.10. Replacement of Lenders...........................................................................66
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
5.1. Initial Credit Extension..........................................................................67
5.1.1. Resolutions, etc................................................................................67
5.1.2. Transaction Consummated.........................................................................68
5.1.3. Transaction Documents...........................................................................69
5.1.4. Closing Date Certificate........................................................................69
5.1.5. Delivery of Notes...............................................................................69
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SECTION PAGE
5.1.6. Payment of Outstanding Indebtedness, etc........................................................69
5.1.7. Closing Fees, Expenses, etc.....................................................................70
5.1.8. Financial Information, Material Adverse
Change.......................................................................................70
5.1.9. Opinions of Counsel; Reliance Letters...........................................................71
5.1.10. Filing Agent, etc..............................................................................71
5.1.11. Subsidiary Guaranty............................................................................71
5.1.12. Solvency, etc..................................................................................71
5.1.13. Security and Pledge Agreement; Seller
Pledge Agreement.............................................................................72
5.1.14. Patent Security Agreement, Trademark
Security Agreement, and Copyright Security
Agreement....................................................................................73
5.1.15. Perfection Certificate.........................................................................73
5.1.16. Mortgage.......................................................................................73
5.1.17. Insurance......................................................................................74
5.1.18. Litigation.....................................................................................74
5.1.19. Minimum EBITDA.................................................................................74
5.1.20. Corporate, Tax and Capital Structure...........................................................74
5.1.21. Approvals......................................................................................74
5.1.22. Satisfactory Legal Form........................................................................75
5.2. All Credit Extensions..........................................................................75
5.2.1. Compliance with Warranties, No Default,
etc..........................................................................................75
5.2.2. Credit Extension Request, etc...................................................................75
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc.................................................................................76
6.2. Due Authorization, Non-Contravention, etc.........................................................76
6.3. Government Approval, Regulation, etc..............................................................76
6.4. Validity, etc.....................................................................................77
6.5. Financial Information.............................................................................77
6.6. No Material Adverse Change........................................................................77
6.7. Litigation, Labor Controversies, etc..............................................................78
6.8. Subsidiaries......................................................................................78
6.9. Ownership of Properties...........................................................................78
6.10. Taxes............................................................................................78
6.11. Pension and Welfare Plans........................................................................78
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SECTION PAGE
6.12. Environmental Warranties.........................................................................79
6.13. Accuracy of Information..........................................................................80
6.14. Regulations U and X..............................................................................80
6.15. Year 2000........................................................................................80
6.16. Issuance of Subordinated Debt; Status of
Obligations as Senior Debt, etc..............................................................80
6.17. Solvency.........................................................................................81
6.18. Capitalization...................................................................................81
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants...........................................................................82
7.1.1. Financial Information, Reports, Notices,
etc..........................................................................................82
7.1.2. Maintenance of Existence; Compliance with
Laws, etc....................................................................................84
7.1.3. Maintenance of Properties.......................................................................85
7.1.4. Insurance.......................................................................................85
7.1.5. Books and Records...............................................................................85
7.1.6. Environmental Law Covenant......................................................................86
7.1.7. Use of Proceeds.................................................................................86
7.1.8. Future Subsidiary Guarantors, Security,
etc..........................................................................................87
7.1.9. Rate Protection Agreements......................................................................87
7.1.10. Undertaking.....................................................................................87
7.1.11. Leased Property................................................................................88
7.1.12. Year 2000......................................................................................88
7.1.13. Additional Opinions............................................................................88
7.2. Negative Covenants..............................................................................88
7.2.1. Business Activities.............................................................................88
7.2.2. Indebtedness....................................................................................89
7.2.3. Liens...........................................................................................91
7.2.4. Financial Condition and Operations..............................................................93
7.2.5. Investments.....................................................................................94
7.2.6. Restricted Payments, etc........................................................................95
7.2.7. Capital Expenditures, etc.......................................................................97
7.2.8. No Prepayment of Subordinated Debt..............................................................98
7.2.9. Capital Securities..............................................................................99
7.2.10. Consolidation, Merger, etc.....................................................................99
7.2.11. Permitted Dispositions........................................................................100
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SECTION PAGE
7.2.12. Modification of Certain Agreements............................................................100
7.2.13. Transactions with Affiliates..................................................................101
7.2.14. Restrictive Agreements, etc...................................................................101
7.2.15. Sale and Leaseback............................................................................102
7.2.16. Designation of Senior Debt....................................................................102
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default....................................................................102
8.1.1. Non-Payment of Obligations....................................................................102
8.1.2. Breach of Warranty............................................................................102
8.1.3. Non-Performance of Certain Covenants and
Obligations................................................................................102
8.1.4. Non-Performance of Other Covenants and
Obligations................................................................................102
8.1.5. Default on Other Indebtedness.................................................................103
8.1.6. Judgments.....................................................................................103
8.1.7. Pension Plans.................................................................................103
8.1.8. Change in Control.............................................................................103
8.1.9. Bankruptcy, Insolvency, etc...................................................................103
8.1.10. Impairment of Security, etc..................................................................104
8.1.11. Failure of Subordination.....................................................................104
8.2. Action if Bankruptcy............................................................................105
8.3. Action if Other Event of Default................................................................105
ARTICLE IX
THE ADMINISTRATIVE AGENT
9.1. Actions.........................................................................................105
9.2. Funding Reliance, etc...........................................................................106
9.3. Exculpation.....................................................................................106
9.4. Successor.......................................................................................107
9.5. Credit Extensions by each Agent.................................................................107
9.6. Credit Decisions................................................................................107
9.7. Copies, etc.....................................................................................108
9.8. Reliance by Agents..............................................................................108
9.9. Defaults........................................................................................108
9.10. Documentation Agent............................................................................109
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ARTICLE X
HOLDINGS GUARANTY
10.1. Guaranty........................................................................................109
10.2. Acceleration of Holdings Guaranty...............................................................110
10.3. Guaranty Absolute, etc..........................................................................110
10.4. Reinstatement, etc..............................................................................111
10.5. Waiver, etc.....................................................................................111
10.6. Postponement of Subrogation, etc................................................................111
10.7. Successors, Transferees and Assigns;
Transfers of Notes, etc.....................................................................112
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1. Waivers, Amendments, etc.......................................................................113
11.2. Notices; Time..................................................................................114
11.3. Payment of Costs and Expenses..................................................................115
11.4. Indemnification................................................................................115
11.5. Survival.......................................................................................117
11.6. Severability...................................................................................117
11.7. Headings.......................................................................................117
11.8. Execution in Counterparts, Effectiveness,
etc........................................................................................117
11.9. Governing Law; Entire Agreement................................................................118
11.10. Successors and Assigns........................................................................118
11.11. Sale and Transfer of Credit Extensions;
Participations in Credit Extensions Notes..................................................118
11.11.1. Assignments.................................................................................118
11.11.2. Participations..............................................................................121
11.12. Reorganization Transaction....................................................................122
11.13. Confidentiality...............................................................................123
11.14. Other Transactions............................................................................124
11.15. Independence of Covenants.....................................................................124
11.16. Forum Selection and Consent to Jurisdiction...................................................124
11.17. Waiver of Jury Trial..........................................................................125
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages and Administrative
Information
EXHIBIT A-1 - Form of Revolving Note
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EXHIBIT A-2 - Form of Term A Note
EXHIBIT A-3 - Form of Term B Note
EXHIBIT A-4 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F - Form of Officer's Solvency Certificate
EXHIBIT G-1 - Form of Security and Pledge Agreement
EXHIBIT G-2 - Form of Seller Pledge Agreement
EXHIBIT H - Form of Perfection Certificate
EXHIBIT I-1 - Form of Mortgage
EXHIBIT I-2 - Form of Deed of Trust
EXHIBIT J - Form of Subsidiary Guaranty
EXHIBIT K - Form of Interco Subordination
Agreement
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Opinion of New York Counsel
to the Obligors
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 17, 1999, is made by and among
WEEKLY READER CORPORATION, a Delaware corporation ("WRC"), and JLC LEARNING
CORPORATION, a Delaware corporation ("JLC" and, together with WRC, the
"BORROWERS"), WRC MEDIA INC. (formerly known as EAC II, Inc.), a Delaware
corporation and the parent of JLC ("HOLDINGS"), as a guarantor, the various
financial institutions and other Persons from time to time parties hereto (the
"LENDERS"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as the Syndication Agent (in such
capacity, the "SYNDICATION AGENT"), the Lead Arranger and the Sole Book Running
Manager, BANK OF AMERICA, N.A. ("BOFA"), as administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the Lenders, and GENERAL ELECTRIC
CAPITAL CORPORATION, as the documentation agent (in such capacity, the
"DOCUMENTATION AGENT") for the Lenders.
W I T N E S S E T H:
WHEREAS, Holdings intends on acquiring (the "FINANCED ACQUISITION") 94.9%
of the outstanding common stock of WRC pursuant to a Redemption, Stock Purchase
and Recapitalization Agreement, dated as of August 13, 1999, as amended by
Amendment No. 1 thereto, dated as of October 26, 1999 and Amendment No. 2
thereto, dated as of November 10, 1999 (the "PURCHASE AGREEMENT"), between
Holdings and Primedia Inc., a Delaware corporation (the "SELLER"), for an
aggregate purchase price of $396,054,500;
WHEREAS, in connection with the Financed Acquisition,
(a) Holdings will obtain the ownership (either directly or indirectly)
of WRC, Primedia Reference Inc., a Delaware corporation ("PRI"), American
Guidance Service Inc., a Delaware corporation ("AGS"), and Lifetime
Learning Systems, Inc., a Delaware corporation ("LIFETIME") and their
respective direct and indirect Subsidiaries;
(b) shares of common stock of WRC equal to 5.1% of the outstanding
shares of such common stock (the "ROLLOVER EQUITY") will be retained by the
Seller; and
(c) the Borrowers will (i) refinance approximately $27,000,000 of
existing Indebtedness of JLC (the "REFINANCING"), (ii) pay estimated fees
and
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expenses in connection with the Financed Acquisition, the Refinancing and
related transactions (the Financed Acquisition, the Refinancing and such
transactions related thereto, including those described in the recitals
hereto, being herein collectively referred to as the "TRANSACTION") of
approximately $22,800,000, and (iii) obtain $7,000,000 in excess cash for
general corporate purposes;
WHEREAS, in order to finance the consummation of Financed Acquisition and
the Refinancing,
(a) Ripplewood Partners, L.P., a Delaware limited partnership
("RIPPLEWOOD"), its Affiliates and co-investors (including SG Capital
Partners and Lexington Partners or such co-investors satisfactory in all
respects to the Syndication Agent) (collectively, the "COMMON EQUITY
SECURITIES INVESTORS") will purchase membership interests of EAC III L.L.C.
("EAC III"), the parent of Holdings, for not less than $65,000,000 in cash
(the "EAC III PURCHASE");
(b) Holdings, JLC and WRC will issue jointly (the "SUBORDINATED NOTE
ISSUANCE") $152,000,000 face amount of their 12-3/4% Senior Subordinated
Notes due 2009 (its "SUBORDINATED NOTES") and in connection therewith
Holdings will issue 205,656 shares of its common stock (the "HOLDINGS
(UNIT) COMMON STOCK") representing 3% of its common stock on a
fully-diluted basis (but without giving effect to management options) for
aggregate gross cash proceeds of at least $149,900,000;
(c) Holdings will issue (the "PIK PREFERRED EQUITY ISSUANCE")
3,000,000 shares of its 15% Senior Preferred Stock redeemable in 2011, par
value $0.01 per share (the "PIK PREFERRED EQUITY") for not less than
$75,000,000 in net cash proceeds to DLJ Merchant Banking Partners II, L.P.
("DLJMB"), certain of the DLJMB Related Parties and other third parties
that are satisfactory in all respects to the Syndication Agent (the "PIK
PREFERRED EQUITY HOLDERS"), which PIK Preferred Equity will be exchangeable
(i) at the option of the holders thereof, for an equal amount of
pay-in-kind preferred stock of WRC (the "WRC PIK I PREFERRED EQUITY")
and/or pay-in-kind preferred stock of JLC (the "JLC PIK PREFERRED EQUITY")
and (ii) at the election of Holdings under certain circumstances, into
pay-in-kind preferred stock of WRC (the "WRC XXX XX PREFERRED EQUITY") as
permitted under SECTION 11.12(d) herein, in
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each case having terms substantially the same as the PIK Preferred Equity,
and in connection therewith the PIK Preferred Equity Holders will also
receive warrants (the "WRC WARRANTS") to acquire not more than 13.1% of the
common stock of WRC on a fully-diluted basis, and warrants (the "JLC
WARRANTS") to acquire not more than 13.1% of the common stock of JLC on a
fully-diluted basis pursuant to a preferred stockholders agreement, dated
as of the date hereof (the "PREFERRED STOCKHOLDERS AGREEMENT"), among
Holdings, WRC, JLC and the PIK Preferred Equity Holders, which includes,
among other things, the irrevocable agreement by the PIK Preferred Equity
Holders for the benefit of the holders of the common stock of JLC and WRC
(and for the benefit of the Administrative Agent, as pledgee (for the
benefit of the Secured Parties), upon any exercise of its rights under the
Security and Pledge Agreement to sell such common stock) that such holders
will have drag-along rights in form and substance satisfactory to the
Agents with respect to the Capital Securities of each Borrower (other than
the WRC PIK Preferred Equity and the JLC PIK Preferred Equity, if any) that
are held by the PIK Preferred Equity Holders (and their transferees);
(d) Holdings will issue (the "COMMON EQUITY ISSUANCE", and together
with the PIK Preferred Equity Issuance, the "EQUITY ISSUANCES") 6,855,853
shares of its common stock ("COMMON EQUITY SECURITIES", and together with
PIK Preferred Equity Securities, the "EQUITY SECURITIES") and EAC III will
purchase the Common Equity Securities using all of the cash proceeds
received by EAC III from the EAC III Purchase (and additional amounts to be
provided by various co-investors) for an aggregate amount of not less than
$95,000,000; and
(e) WRC will issue to Holdings pay-in- kind preferred stock (the "WRC
MIRROR PIK PREFERRED EQUITY") for not less than $75,000,000, which WRC Mirror
PIK Preferred Equity will have terms substantially the same as the PIK Preferred
Equity, except that the issuer of such stock will be WRC and such stock will
have no exchange rights;
(f) the Seller will maintain the Rollover Equity in WRC;
WHEREAS, in connection with the Transaction and the post-closing ongoing
working capital and general corporate
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needs of the Borrowers and their respective Subsidiaries, the Borrowers desire
to obtain the following financing facilities from the Lenders:
(a) a Term A Loan Commitment and a Term B Loan Commitment pursuant to
which Borrowings of Term Loans will be made to the Borrowers on the Closing
Date in a maximum, original principal amount of $31,000,000 (in the case of
Term A Loans) and $100,000,000 (in the case of Term B Loans);
(b) a Revolving Loan Commitment (to include availability for Revolving
Loans, Swing Line Loans and Letters of Credit) pursuant to which Borrowings
of Revolving Loans, in a maximum aggregate principal amount (together with
all Swing Line Loans and Letter of Credit Outstandings) not to exceed
$30,000,000 will be made to the Borrowers from time to time on and
subsequent to the Closing Date but prior to the Revolving Loan Commitment
Termination Date;
(c) a Letter of Credit Commitment pursuant to which each Issuer will
issue Letters of Credit for the account of the Borrowers and the Subsidiary
Guarantors from time to time on and subsequent to the Closing Date but
prior to the Revolving Loan Commitment Termination Date in a maximum
aggregate Stated Amount at any one time outstanding not to exceed
$5,000,000 (PROVIDED, that the aggregate outstanding principal amount of
Revolving Loans, Swing Line Loans and Letter of Credit Outstandings at any
time shall not exceed the then existing Revolving Loan Commitment Amount);
and
(d) a Swing Line Loan Commitment pursuant to which Borrowings of Swing
Line Loans in an aggregate outstanding principal amount not to exceed
$5,000,000 will be made on and subsequent to the Closing Date but prior to
the Revolving Loan Commitment Termination Date (PROVIDED, that the
aggregate outstanding principal amount of such Swing Line Loans, together
with Revolving Loans and Letter of Credit Outstandings, at any time shall
not exceed the then existing Revolving Loan Commitment Amount); and
WHEREAS, the Lenders and the Issuers are willing, on the terms and subject
to the conditions hereinafter set forth, to extend the Commitments and make
Loans to the Borrowers and issue (or participate in) Letters of Credit;
NOW, THEREFORE, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"ACQUISITION" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the Capital
Securities of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other combination with
another Person (PROVIDED that a Borrower or one of its Subsidiaries is the
surviving entity).
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE and includes each other
Person appointed as the successor Administrative Agent pursuant to SECTION 9.4.
"AFFECTED LENDER" is defined in SECTION 4.10.
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly,
(a) to vote 10% or more of the Capital Securities (on a fully diluted
basis) of such Person, having ordinary voting power for the election of
directors, managing members or general partners (as applicable); or
(b) to direct or cause the direction of the management and policies of
such Person (whether by contract or otherwise).
"AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified from time to time and
in effect on such date.
"AGS" is defined in CLAUSE (a) of the SECOND RECITAL.
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"ALTERNATE BASE RATE" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum (rounded upward, if necessary,
to the next highest 1/16 of 1%) equal to the higher of
(a) the Base Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Administrative Agent will give notice promptly to the Borrowers
and the Lenders of changes in the Alternate Base Rate; PROVIDED, that the
failure to give such notice shall not affect the Alternate Base Rate in effect
after such change.
"APPLICABLE COMMITMENT FEE" means, (a) for each day from the Effective Date
to (but excluding) the date five (5) Business Days after the date upon which the
Compliance Certificate for the second full Fiscal Quarter ending after the
Effective Date is required to be delivered by Holdings to the Agents pursuant to
CLAUSE (c) of SECTION 7.1.1, a fee which shall accrue at a rate of 1/2 of 1% per
annum, and (b) at all times from the date five (5) Business Days after the date
the Compliance Certificate described in CLAUSE (a) above is required to be
delivered, a fee which shall accrue at the applicable rate per annum set forth
below under the column entitled "APPLICABLE COMMITMENT FEE", determined by
reference to the applicable Leverage Ratio referred to below:
Leverage Applicable Commitment
Ratio ---------------------
----------- Fee
----
greater .500%
than
5.00:1.0
greater .375%
than
4.00:1.0
and less
than or
equal to
5.00:1.0
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Leverage Applicable Commitment
Ratio ---------------------
----------- Fee
----
less than .250%
or equal
to
4.00:1.0
The Leverage Ratio used to compute the Applicable Commitment Fee shall be that
set forth in the Compliance Certificate most recently delivered by Holdings to
the Agents; changes in the Applicable Commitment Fee resulting from a change in
the Leverage Ratio shall become effective upon delivery by Holdings to the
Agents of a new Compliance Certificate pursuant to CLAUSE (c) of SECTION 7.1.1.
If Holdings shall fail to deliver a Compliance Certificate by the delivery due
date specified in such clause, the Applicable Commitment Fee from and including
the day immediately following such delivery due date to (but excluding) the date
five (5) Business Days after the date Holdings delivers to the Agents a
Compliance Certificate shall conclusively be equal to the highest Applicable
Commitment Fee set forth above.
"APPLICABLE MARGIN" means, at all times during the applicable periods set
forth below,
(a) on any date, with respect to the unpaid principal amount of each
Term B Loan maintained as a (i) Base Rate Loan, 3.00% per annum and (ii)
LIBO Rate Loan, 4.00% per annum;
(b) from the Effective Date to (but excluding) the date five (5)
Business Days after the date upon which the Compliance Certificate for the
second full Fiscal Quarter ending after the Effective Date is required to
be delivered by Holdings to the Agents pursuant to CLAUSE (c) of SECTION
7.1.1, with respect to the unpaid principal amount of each (i) Swing Line
Loan (which shall be borrowed and maintained only as a Base Rate Loan),
Revolving Loan and Term A Loan maintained as a Base Rate Loan, 2.25% per
annum, and (ii) Revolving Loan and Term A Loan maintained as a LIBO Rate
Loan, 3.25% per annum; and
(c) at all times from the date five (5) Business Days after the date
the Compliance Certificate described in CLAUSE (b) above is required to be
delivered, with respect to the unpaid principal amount of each Swing Line
Loan (which shall be borrowed and maintained only as a Base Rate Loan),
Revolving Loan and Term A Loan, the rate determined by reference to
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the applicable Leverage Ratio and at the applicable percentage per annum
set forth below under the column entitled "APPLICABLE MARGIN FOR BASE RATE
LOANS", in the case of such Loans made or maintained as Base Rate Loans, or
by reference to the applicable Leverage Ratio and at the applicable
percentage per annum set forth below under the column entitled "APPLICABLE
MARGIN FOR LIBO RATE LOANS", in the case of such Loans made or maintained
as LIBO Rate Loans:
Applicable
Margin For
Applicable LIBO Rate
Leverage Margin For ---------
Ratio Base Rate Loans Loans
----- --------------- -----
greater than
5.50:1.0 2.25% 3.25%
greater than
5.00:1.0 and less
than or equal to
5.50:1.0 2.00% 3.00%
greater than
4.50:1.0 and less
than or equal to
5.00:1.0 1.75% 2.75%
greater than
4.00:1.0 and less
than or equal to
4.50:1.0 1.50% 2.50%
greater than
3.50:1.0 and less
than or equal to
4.00:1.0 1.25% 2.25%
less than or
equal to 3.50:1.0 1.00% 2.00%
The Leverage Ratio used to compute the Applicable Margin shall be the Leverage
Ratio set forth in the Compliance Certificate most recently delivered by
Holdings to the Agents; changes in the Applicable Margin resulting from a change
in the Leverage Ratio shall become effective upon the date five (5) Business
Days after the date by which delivery by the Borrowers to the Agents of a new
Compliance Certificate is required pursuant to CLAUSE (c) of SECTION 7.1.1. If
Holdings shall fail to deliver a Compliance Certificate by the delivery due date
specified in such clause, the Applicable Margin from and including the day
-8-
immediately following such delivery due date to (but excluding) the date five
(5) Business Days after the date Holdings delivers to the Agents a Compliance
Certificate shall conclusively be equal to the highest Applicable Margin set
forth above.
"ASSIGNEE LENDER" is defined in SECTION 11.11.1.
"ASSIGNOR LENDER" is defined in SECTION 11.11.1.
"AUTHORIZED OFFICER" means, relative to any Obligor or the Seller, those of
its officers, general parties or managing members (as applicable) whose
signatures and incumbency shall have been certified to the Agents, the Lenders
and the Issuers pursuant to SECTION 5.1.1.
"BASE RATE" means, at any time, the rate of interest then most recently
established by the Administrative Agent in Charlotte, North Carolina as its base
rate for U.S. dollars loaned in the United States. The Base Rate is not
necessarily intended to be the lowest rate of interest determined by the
Administrative Agent in connection with extensions of credit.
"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"BOFA" is defined in the PREAMBLE.
"BORROWERS" is defined in the PREAMBLE.
"BORROWING" means the Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by all Lenders required to make such
Loans on the same Business Day and pursuant to the same Borrowing Request in
accordance with SECTION 2.1.
"BORROWING REQUEST" means a Loan request and certificate duly executed by
an Authorized Officer of the applicable Borrower, substantially in the form of
EXHIBIT B-1 hereto.
"BUSINESS DAY" means
(a) any day which is neither a Saturday or Sunday nor a legal holiday
on which banks are authorized or required to be closed in Charlotte, North
Carolina or New York, New York; and
-9-
(b) relative to the making, continuing, prepaying or repaying of any
LIBO Rate Loans, any day which is a Business Day described in CLAUSE (a)
above and which is also a day on which dealings in Dollars are carried on
in the London interbank eurodollar market.
"CAPITAL EXPENDITURES" means, for any period, the aggregate amount of all
expenditures of Holdings, the Borrowers and their respective Subsidiaries for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures. It is further agreed and understood
by the parties hereto that capital expenditures made by acquisition of all the
Capital Securities of an entity that owns fixed or capital assets will also be
considered to constitute "Capital Expenditures".
"CAPITAL SECURITIES" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Effective Date.
"CAPITALIZED LEASE LIABILITIES" means all monetary obligations of Holdings,
either Borrower or any of their respective Subsidiaries under any leasing or
similar arrangement which have been (or, in accordance with GAAP, should be)
classified as capitalized leases, and for purposes of each Loan Document the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a premium or a penalty.
"CASH COLLATERALIZE" means, with respect to a Letter of Credit, the deposit
of immediately available funds into a cash collateral account maintained with
(or on behalf of) the Administrative Agent on terms satisfactory to the
Administrative Agent in an amount equal to the Stated Amount of such Letter of
Credit.
"CASH EQUIVALENT INVESTMENT" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by) the
United States of America or a State thereof (or any agency or political
subdivision thereof, to the extent such obligations are supported by the
full faith and credit of the United States of
-10-
America or a State thereof) maturing not more than six months after such time;
(b) commercial paper maturing not more than 180 days from the date of
issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
organized under the laws of any State of the United States or of the
District of Columbia and rated A-1 or higher by S&P or P-1 or higher
by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers acceptance,
maturing not more than six months after its date of issuance, which is
issued by either
(i) any domestic office of any bank organized under the laws of
(A) the United States (or any State thereof) or (B) any other member
of the OECD, and, in each case, which has (x) a credit rating of A2 or
higher from Xxxxx'x or A or higher from S&P and (y) a combined capital
and surplus greater than $500,000,000, or
(ii) any Lender;
(d) any repurchase agreement having a term of 7 days or less entered
into with any Lender or any commercial banking institution satisfying the
criteria set forth in CLAUSE (c)(i) which
(i) is secured by a fully perfected security interest in any
obligation of the type described in CLAUSE (a), and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such commercial banking institution thereunder; or
(e) shares of investment companies that are registered under the
Investment Company Act of 1940, as amended, and that invest solely in one
or more of the types of securities described in CLAUSES (a) through (c)
above.
"CASUALTY EVENT" means the damage, destruction or condemnation, as the case
may be, of any property of
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Holdings, either Borrower or any of their respective Subsidiaries.
"CASUALTY PROCEEDS" means, with respect to any Casualty Event, the amount
of any insurance proceeds or condemnation awards received by Holdings, either
Borrower or any of their respective Subsidiaries in connection therewith, but
excluding any proceeds or awards required to be paid to a creditor (other than
any Secured Party) which holds a first-priority Lien permitted by SECTION 7.2.3
on the property which is the subject of such Casualty Event.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CERTIFICATES OF DESIGNATION" means, collectively, the Holdings Certificate
of Designation, the WRC Certificate of Designation and the JLC Certificate of
Designation.
"CHANGE IN CONTROL" means
(a) the failure of Ripplewood to directly or indirectly own
beneficially and of record on a fully diluted basis 51% of the outstanding
Capital Securities of EAC III, such Capital Securities to be held free and
clear of all Liens; or
(b) at any time prior to the creation of a Public Market, the failure
of EAC III to directly or indirectly own beneficially and of record on a
fully diluted basis prior to a Permitted Common Stock Exchange, at least
51% of the outstanding Capital Securities of Holdings (other than the PIK
Preferred Equity, if any (and any preferred stock having identical terms
thereto that is issued by Holdings to the holders thereof)) such Capital
Securities to be held free and clear of all Liens; or
(c) at any time after the creation of a Public Market relating to
Holdings or WRC, any person or group (within the meaning of Sections 13(d)
and 14(d) under the Exchange Act), other than Ripplewood or any other
Common Equity Investor, shall become the ultimate "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of Capital Securities representing more than 20% of the
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Capital Securities of Holdings (other than the PIK Preferred Equity, if any
(and any preferred stock having identical terms thereto that is issued by
Holdings to the holders thereof)) or WRC (other than the WRC Mirror PIK
Preferred Equity, if any, and the WRC PIK Preferred Equity, if any (and any
preferred stock having identical terms thereto that is issued by WRC to the
holders thereof)), as the case may be; or
(d) the first day on which a majority of the members of the Board of
Directors of Holdings or either Borrower are not Continuing Directors; or
(e) at any time prior to the creation of a Public Market, (i) prior to
the Permitted Common Stock Exchange, the failure of Holdings at any time to
directly own beneficially and of record on a fully diluted basis at least
78.80% and (ii) following the Permitted Common Stock Exchange, the failure
of Holdings at any time to directly own beneficially and of record on a
fully diluted basis at least 74.78%, in each case, of the outstanding
Capital Securities of WRC (other than the WRC Mirror PIK Preferred Equity,
if any, and the WRC PIK Preferred Equity, if any (and any preferred stock
having identical terms thereto that is issued by WRC to the holders thereof
in exchange therefor)), such Capital Securities to be held free and clear
of all Liens (other than Liens granted under a Loan Document); or
(f) the failure of Holdings and WRC, individually or collectively, at
any time to directly own beneficially and of record on a fully diluted
basis 83.90% of the outstanding Capital Securities of JLC (other than the
JLC PIK Preferred Equity, if any (and any preferred stock having identical
terms thereto that is issued by JLC to the holders thereof in exchange
therefor)), such Capital Securities to be held free and clear of all Liens
(other than Liens granted under a Loan Document); or
(g) (i) prior to the Permitted Common Stock Exchange, the failure of
(A) prior to the third anniversary of the Closing Date, at least 83.90% and
(B) on and subsequent to the third anniversary of the Closing Date, at
least 78.80%, and (ii) following the Permitted Common Stock Exchange, the
failure of (A) prior to the third anniversary of the Closing Date, at least
79.62% and (B) on and subsequent to the third anniversary of the Closing
Date, at least 74.78%, in
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each case, of the outstanding Capital Securities of WRC (other than the WRC
Mirror PIK Preferred Equity, if any, and the WRC PIK Preferred Equity, if
any (and any preferred stock having identical terms thereto that is issued
by WRC to the holders thereof in exchange therefor)) to be pledged by the
holder(s) thereof to the Administrative Agent under the Security and Pledge
Agreement, provided, however, that after the creation of a Public Market of
WRC, each such percentage of WRC's Capital Securities shall be equitably
adjusted based upon the amount of Capital Securities issued in connection
with a Public Offering of WRC; or
(h) the failure of the holders thereof to pledge at least 83.90% of
the outstanding Capital Securities of JLC (other than the JLC PIK Preferred
Equity, if any (and any preferred stock having identical terms thereto that
is issued by JLC to the holders thereof in exchange therefor)) to the
Administrative Agent under the Security and Pledge Agreement; or
(i) the occurrence of any "Change of Control" (or similar term) under
(and as defined in) any Sub Debt Document.
"CLOSING DATE" means the date of the initial Credit Extension, which shall
be a Business Day.
"CLOSING DATE CERTIFICATE" means, collectively, the officer's certificate
executed and delivered by an authorized officer of each of Holdings, each
Borrower and each Subsidiary Guarantor pursuant to the terms of this Agreement,
substantially in the form of EXHIBIT D hereto.
"CODE" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"COMMITMENT" means, as the context may require, a Lender's Term A Loan
Commitment, Term B Loan Commitment, Revolving Loan Commitment or Letter of
Credit Commitment, or the Swing Line Lender's Swing Line Loan Commitment.
"COMMITMENT AMOUNT" means, as the context may require, the Term A Loan
Commitment Amount, the Term B Loan Commitment Amount, the Revolving Loan
Commitment Amount, the Letter of Credit Commitment Amount or the Swing Line Loan
Commitment Amount.
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"COMMITMENT TERMINATION DATE" means, as the context may require, the Term A
Loan Commitment Termination Date, the Term B Loan Commitment Termination Date or
the Revolving Loan Commitment Termination Date.
"COMMITMENT TERMINATION EVENT" means
(a) the occurrence of any Event of Default described in CLAUSES
(a) through (d) of SECTION 8.1.9; or
(b) the occurrence and continuance of any other Event of Default
and either
(i) the declaration of all or any portion of the Loans
to be due and payable pursuant to SECTION 8.3, or
(ii) the giving of notice by the Administrative Agent,
acting at the direction of the Required Lenders, to the
Borrowers that the Commitments have been terminated.
"COMMON EQUITY ISSUANCE" is defined in CLAUSE (d) of the THIRD RECITAL.
"COMMON EQUITY SECURITIES" is defined in CLAUSE (d) of the THIRD RECITAL.
"COMMON EQUITY SECURITIES INVESTORS" is defined in CLAUSE (a) of the THIRD
RECITAL.
"COMPLIANCE CERTIFICATE" means a certificate duly completed and executed by
the chief financial or accounting Authorized Officer of Holdings, substantially
in the form of EXHIBIT E hereto, together with such changes thereto as the
Agents may from time to time request for the purpose of monitoring Holdings' and
the Borrowers' compliance with the financial covenants contained herein.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other
-15-
Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitation set forth therein) be deemed to be the
outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
applicable Borrower, substantially in the form of EXHIBIT C hereto.
"CONTINUING DIRECTOR" means, as of any date of determination, any member of
the Board of Directors of Holdings or either Borrower who (i) was a member of
the Board of Directors of such Obligor on the Closing Date or (ii) was nominated
for election or elected to the Board of Directors of such Obligor with the
approval of a majority of the Continuing Directors who were members of the Board
of Directors of such Obligor at the time of such nomination or election.
"CONTROLLED GROUP" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with Holdings or either
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"COPYRIGHT SECURITY AGREEMENT" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit D to
the Security and Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"CREDIT EXTENSION" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by an Issuer.
"CREDIT EXTENSION REQUEST" means, as the context may require, any Borrowing
Request or Issuance Request.
"CURRENT ASSETS" means, on any date, without duplication, all assets which,
in accordance with GAAP, would be included as current assets on a consolidated
balance sheet of Holdings and its Subsidiaries at such date as current assets
(excluding, however, amounts due and to
-16-
become due from Affiliates of the Borrowers which have arisen from transactions
which are other than arm's-length and in the ordinary course of its business).
"CURRENT LIABILITIES" means, on any date, without duplication, all amounts
which, in accordance with GAAP, would be included as current liabilities on a
consolidated balance sheet of Holdings and its Subsidiaries at such date,
excluding current maturities of Indebtedness.
"DEFAULT" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"DEFAULTING LENDER" means any Lender which defaults in its obligation to
make any Credit Extension hereunder in accordance with SECTION 2.1.1 or 2.1.2 as
a result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority.
"DISBURSEMENT" is defined in SECTION 2.6.2.
"DISBURSEMENT DATE" is defined in SECTION 2.6.2.
"DISBURSEMENT DUE DATE" is defined in SECTION 2.6.2.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the written consent
of the Required Lenders.
"DISPOSITION" (or similar words such as "DISPOSE") means any sale,
transfer, lease, contribution or other conveyance (including by way of merger)
of, or the granting of options, warrants or other rights to, either of the
Borrower's or their respective Subsidiaries' assets (including accounts
receivables and Capital Securities of Subsidiaries) to any other Person in a
single transaction or series of transactions; PROVIDED that the term
"Disposition" shall not include any Permitted Equity Exchange.
"DLJ" is defined in the PREAMBLE.
"DLJMB" is defined in CLAUSE (c) of the THIRD RECITAL.
"DLJMB RELATED PARTY" means (i) any controlling stockholder, majority (or
more) owned Subsidiary, or immediate family member (in the case of an
individual) of
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DLJMB; or (ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding a
majority or more controlling interest of which consist of DLJMB and/or such
other Persons referred to in the immediately preceding CLAUSE (i).
"DOCUMENTATION AGENT" is defined in the PREAMBLE.
"DOLLAR" and the sign "$" mean lawful money of the United States.
"DOMESTIC OFFICE" means the office of a Lender designated as its "Domestic
Office" on its signature page hereto or in a Lender Assignment Agreement, or
such other office within the United States as may be designated from time to
time by notice from such Lender to the Agents and the Borrowers.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is not a Foreign
Subsidiary.
"EAC III" is defined in CLAUSE (a) of the THIRD RECITAL.
"EBITDA" means, for any applicable period, the sum of
(a) the excess of (i) Net Income (excluding any non-cash revenues
included in the computation of Net Income) OVER (ii) Restricted Payments
permitted under CLAUSES (c) and (d) of SECTION 7.2.6,
PLUS
(b) to the extent deducted in determining Net Income, the sum of (i)
amounts attributable to amortization, (ii) income tax expense, (iii)
Interest Expense, (iv) depreciation of assets and (v) other non-cash,
non-recurring charges.
"EFFECTIVE DATE" means the date this Agreement becomes effective
pursuant to SECTION 11.8.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders) relating to the protection of the
environment.
"EQUITY ISSUANCES" is defined in CLAUSE (d) of the THIRD RECITAL.
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"EQUITY SECURITIES" is defined in CLAUSE (d) of the THIRD RECITAL.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with
the regulations thereunder, in each case as in effect from time to time.
References to Sections of ERISA also refer to any successor Sections
thereto.
"EVENT OF DEFAULT" is defined in SECTION 8.1.
"EXCESS CASH FLOW" means, for any Fiscal Year, the excess (if any), of
(a) EBITDA for such Fiscal Year OVER
(b) the sum (for such Fiscal Year), without duplication, of (i)
Interest Expense actually paid in cash by Holdings, the Borrowers and
their respective Subsidiaries, (ii) scheduled principal repayments, to
the extent actually made, of Term Loans pursuant to CLAUSES (c) and
(d) of SECTION 3.1.1, and other voluntary or mandatory prepayments of
Term Loans or repayments of Revolving Loans (accompanied by a
permanent commitment reduction), (iii) all income taxes actually paid
in cash by Holdings, the Borrowers and their respective Subsidiaries,
(iv) Capital Expenditures actually made by the Borrowers and their
respective Subsidiaries in such Fiscal Year, (v) Investments permitted
to be made and actually made in cash pursuant to CLAUSE (d), (g) or
(i) of SECTION 7.2.5, by the Borrowers and their respective
Subsidiaries in such Fiscal Year, (vi) Restricted Payments of the
types described in CLAUSES (b), (c), (d), and (f) (other than
Restricted Payments made by WRC in respect of the WRC Mirror PIK
Preferred Equity that are used by Holdings to make scheduled payments
of dividends on the PIK Preferred Equity to WRC) of SECTION 7.2.6 that
are permitted to be made and actually made in cash during such Fiscal
Year and (vii) payments of interest described in SECTION 7.2.8(a)(i)
that are permitted to be made and actually made in cash during such
Fiscal Year;
PLUS (MINUS)
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(c) the amount of the net increase (decrease) of Current Assets,
other than cash and Cash Equivalent Investments, over Current
Liabilities of Holdings, the Borrowers and their respective
Subsidiaries for such applicable period.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXEMPTION CERTIFICATE" is defined in CLAUSE (e) of SECTION 4.6.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.
"FEE LETTER" means the confidential letter, dated October 26, 1999, among
DLJ, BofA and Ripplewood.
"FILING AGENT" is defined in SECTION 5.1.10.
"FILING STATEMENTS" is defined in SECTION 5.1.10.
"FINANCED ACQUISITION" is defined in the FIRST RECITAL.
"FISCAL QUARTER" means a quarter ending on the last day of March, June,
September or December.
"FISCAL YEAR" means any period of twelve consecutive calendar months ending
on December 31; references to a Fiscal Year with a number corresponding to any
calendar year (E.G., the "2000 Fiscal Year") refer to the Fiscal Year ending on
December 31 of such calendar year.
"FIXED CHARGE COVERAGE RATIO" means, as of the close of any Fiscal Quarter,
the ratio computed for the period
-20-
consisting of such Fiscal Quarter and each of the three immediately preceding
Fiscal Quarters of:
(a) EBITDA (for all such Fiscal Quarters);
TO
(b) the sum (for all such Fiscal Quarters), without duplication, of
(i) Interest Expense, (ii) Capital Expenditures of the Borrowers and their
respective Subsidiaries made during such Fiscal Quarters, (iii) scheduled
principal repayments of Indebtedness made during such period (including
repayments of the Term Loans pursuant to CLAUSES (c) and (d) of SECTION
3.1.1, after giving effect to any reductions in such scheduled principal
repayments attributable to any optional or mandatory prepayments of the
Term Loans), (iv) all income taxes actually paid in cash by Holdings, the
Borrowers and their respective Subsidiaries, (v) Restricted Payments of the
types described in CLAUSES (b) and (f) (other than Restricted Payments made
by WRC in respect of the WRC Mirror PIK Preferred Equity that are used by
Holdings to make scheduled payments of dividends on the PIK Preferred
Equity to WRC) of SECTION 7.2.6 actually made during such applicable period
and (vi) payments of interest described in SECTION 7.2.8(a)(i) that are
actually made during such applicable period.
"FOREIGN PLEDGE AGREEMENT" means any supplemental pledge agreement governed
by the laws of a jurisdiction other than the United States or a State thereof
executed and delivered by either Borrower or any of its Subsidiaries pursuant to
the terms of this Agreement, in form and substance satisfactory to the Agents,
as may be necessary or desirable under the laws of organization or incorporation
of a Subsidiary to further protect or perfect the Lien on and security interest
in any Collateral (as defined in the Security and Pledge Agreement).
"FOREIGN SUBSIDIARY" means any Subsidiary of Holdings (a) which is
organized under the laws of any jurisdiction outside of the United States of
America, (b) which conducts the major portion of its business outside of the
United States of America and (c) all or substantially all of the property and
assets of which are located outside of the United States of America.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.
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"GAAP" is defined in SECTION 1.4.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTOR" means, as the context may require, Holdings and/or each
Subsidiary Guarantor.
"HAZARDOUS MATERIAL" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product)
within the meaning of any other applicable Environmental Law.
"HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities of
such Person under currency exchange agreements, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates or currency exchange rates.
"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"HOLDINGS" is defined in the PREAMBLE.
"HOLDINGS CERTIFICATE OF DESIGNATION" means that certain Certificate of
Designation, Performance and Rights of 15% Senior Preferred Stock due 2011 of
Holdings, dated November 16, 1999 and made pursuant to Section 151 of the
General Corporation Law of the State of Delaware.
"HOLDINGS (UNIT) COMMON STOCK" is defined in CLAUSE (b) of the THIRD
RECITAL.
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"IMPERMISSIBLE QUALIFICATION" means any qualification or exception to the
opinion or certification of any independent public accountant as to any
financial statement of Holdings or either Borrower
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item in
such financial statement and which, as a condition to its removal, would
require an adjustment to such item the effect of which would be to cause
Holdings or such Borrower to be in Default.
"INCLUDING" and "INCLUDE" means including without limiting the generality
of any description preceding such term, and, for purposes of each Loan Document,
the parties hereto agree that the rule of ejusdem generis shall not be
applicable to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters specifically
mentioned.
"INDEBTEDNESS" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or advances and
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments;
(b) all obligations, contingent or otherwise, relative to the face
amount of all letters of credit, whether or not drawn, and banker's
acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) net termination value of such Person under all of its Hedging
Obligations as if such Hedging Obligations were terminated on the date of
the determination of the amount of Indebtedness;
(e) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services
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excluding trade accounts payable in the ordinary course of business which
are not overdue for a period of more than 90 days or, if overdue for more
than 90 days, as to which a dispute exists and adequate reserves in
conformity with GAAP have been established on the books of such Person, and
indebtedness secured by (or for which the holder of such indebtedness has
an existing right, contingent or otherwise, to be secured by) a Lien on
property owned or being acquired by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such Person or
is limited in recourse;
(f) obligations of such Person arising under Synthetic Leases;
(g) Redeemable Capital Stock of such Person; and
(h) all Contingent Liabilities of such Person in respect of any of the
foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.
"INDEMNIFIED PARTIES" is defined in SECTION 11.4.
"INTERCO SUBORDINATION AGREEMENT" means the Intercompany Subordination
Agreement, substantially in the form of EXHIBIT K hereto, executed and delivered
by two or more Obligors pursuant to the terms of this Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"INTERCOMPANY NOTE" means, with respect to Holdings, either Borrower or any
of their respective Subsidiaries, as the maker thereof, a promissory note
substantially in the form of Exhibit A to the Security and Pledge Agreement
(with such modifications as the Administrative Agent may consent to, such
consent not to be unreasonably withheld), which promissory note shall evidence
all intercompany loans which may be made from time to time by the payee
thereunder to
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such maker and shall be duly endorsed and pledged by the payee in favor of the
Administrative Agent.
"INTEREST EXPENSE" means, for any Fiscal Quarter, the aggregate interest
expense (both accrued and paid) of Holdings, the Borrowers and their respective
Subsidiaries for such Fiscal Quarter, including the portion of any payments made
in respect of Capitalized Lease Liabilities allocable to interest expense (net
of interest income and net payments under Hedging Obligations relating to
interest rate swaps, caps or collars paid during such period to the Borrowers
and their respective Subsidiaries) or made in respect of Hedging Obligations
relating to interest rates swaps, caps or collars.
"INTEREST PERIOD" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to SECTIONS 2.3 or
2.4 and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three, six months or, if then generally available to each
applicable Lender, nine or twelve months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
applicable Borrower may select in its relevant notice pursuant to SECTIONS 2.3
or 2.4; PROVIDED, HOWEVER, that
(a) such Borrower shall not be permitted to select Interest Periods to
be in effect at any one time which have expiration dates occurring on more
than ten different dates;
(b) if such Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first Business
Day of a calendar month, in which case such Interest Period shall end on
the Business Day next preceding such numerically corresponding day); and
(c) no Interest Period for any Loan may end later than the Stated
Maturity Date for such Loan.
"INVESTMENT" means, relative to any Person,
(a) any loan, advance or extension of credit made by such Person to
any other Person, including the purchase by such Person of any bonds,
notes, debentures or other debt securities of any other Person; and
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(b) any Capital Securities held by such Person in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"ISP RULES" is defined in SECTION 11.9.
"ISSUANCE REQUEST" means a Letter of Credit request and certificate duly
executed by an Authorized Officer of the applicable Borrower, substantially in
the form of EXHIBIT B-2 hereto.
"ISSUER" means the Administrative Agent in its capacity as Issuer of the
Letters of Credit. At the request of the Administrative Agent and with the
Borrowers' consent (not to be unreasonably withheld), another Lender or an
Affiliate of the Administrative Agent may issue one or more Letters of Credit
hereunder.
"JLC" is defined in the PREAMBLE.
"JLC CERTIFICATE OF DESIGNATION" means a certificate of designation
substantially in the form of the certificate of designation described in clause
(i) of the definition of the term "WRC Certificate of Designation" and relating
to the JLC PIK Preferred Equity.
"JLC PIK PREFERRED EQUITY" is defined in CLAUSE (c) of the THIRD RECITAL.
"JLC WARRANTS" is defined in CLAUSE (c) of the THIRD RECITAL.
"LANDLORD WAIVER" means an agreement in favor of the Administrative Agent,
for the benefit of the Secured Parties, in form and substance reasonably
satisfactory to the Agents.
"LENDER ASSIGNMENT AGREEMENT" means an assignment agreement substantially
in the form of EXHIBIT L hereto.
"LENDERS" is defined in the PREAMBLE and includes each Person that becomes
a Lender pursuant to SECTION 11.11.1.
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"LENDER'S ENVIRONMENTAL LIABILITY" means any and all losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, costs, judgments,
suits, proceedings, damages (including consequential damages), disbursements or
expenses of any kind or nature whatsoever (including reasonable attorneys' fees
at trial and appellate levels and experts' fees and disbursements and expenses
incurred in investigating, defending against or prosecuting any litigation,
claim or proceeding) which may at any time be imposed upon, incurred by or
asserted or awarded against either Agent, any Lender or any Issuer or any of
such Person's Affiliates, shareholders, directors, officers, employees, and
agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of Holdings, either Borrower or any of their
respective Subsidiaries, the groundwater thereunder, or any surrounding
areas thereof to the extent caused by Releases from Holdings', either
Borrower's or any of their respective Subsidiaries' or any of their
respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in SECTION 6.12;
(c) any violation or claim of violation by Holdings, either Borrower
or any of their respective Subsidiaries of any Environmental Laws; or
(d) the imposition of any lien for damages caused by or the recovery
of any costs for the cleanup, release or threatened release of Hazardous
Material by Holdings, either Borrower or any of their respective
Subsidiaries, or in connection with any property owned or formerly owned by
Holdings, either Borrower or any of their respective Subsidiaries.
"LETTER OF CREDIT" is defined in SECTION 2.1.2.
"LETTER OF CREDIT COMMITMENT" means, with respect to an Issuer, such
Issuer's obligation to issue Letters of Credit pursuant to SECTION 2.1.2 and,
with respect to each Revolving Loan Lender, the obligations of each such Lender
to participate in such Letters of Credit pursuant to SECTION 2.6.1.
"LETTER OF CREDIT COMMITMENT AMOUNT" means, on any date, a maximum amount
of $5,000,000, as such amount may be
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permanently reduced from time to time pursuant to SECTION 2.2.
"LETTER OF CREDIT OUTSTANDINGS" means, on any date, an amount equal to the
sum of (i) the then aggregate amount which is undrawn and available under all
issued and outstanding Letters of Credit, and (ii) the then aggregate amount of
all unpaid and outstanding Reimbursement Obligations.
"LEVERAGE RATIO" means, as of the last day of any Fiscal Quarter, the ratio
of
(a) Total Debt outstanding on the last day of such Fiscal Quarter
TO
(b) EBITDA computed for the period consisting of such Fiscal Quarter
and each of the three immediately preceding Fiscal Quarters.
"LIBO RATE" means, relative to any Interest Period for LIBO Rate Loans, the
interest rate per annum for deposits in Dollars, if any, for a period equal to
the relevant Interest Period which appears on Telerate Page 3750 at
approximately 11:00 a.m., London time, prior to the commencement of such
Interest Period. If such a rate does not appear on Telerate Page 3750, the LIBO
Rate shall be the rate of interest equal to the average (rounded, if necessary,
to the nearest 1/100 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to the Administrative Agent's LIBOR
Office in the London interbank market as at or about 11:00 a.m. London, England
time two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of the Administrative Agent's LIBO Rate Loan
and for a period approximately equal to such Interest Period.
"LIBO RATE LOAN" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO RATE (RESERVE ADJUSTED)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded, if necessary, to the nearest 1/100 of 1%)
determined pursuant to the following formula:
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LIBO Rate = LIBO
RATE
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR OFFICE" means the office of a Lender designated as its "LIBOR
Office" on SCHEDULE II hereto or in a Lender Assignment Agreement, or such other
office designated from time to time by notice from such Lender to the Borrowers
and the Agents, whether or not outside the United States, which shall be making
or maintaining the LIBO Rate Loans of such Lender.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"LIFETIME" is defined in CLAUSE (a) of the SECOND RECITAL.
"LOAN" means, as the context may require, a Revolving Loan, a Term Loan or
a Swing Line Loan of any type.
"LOAN DOCUMENTS" collectively means this Agreement, the Letters of Credit,
each Secured Hedging Agreement, the Interco Subordination Agreement, the Fee
Letter, each agreement pursuant to which the Administrative Agent is granted a
Lien to secure the Obligations, each Credit Extension Request and each other
agreement which specifies
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that it is a Loan Document and to which Holdings, either Borrower or any
Subsidiary Guarantor is a signatory.
"MANAGEMENT FEES" means all management and similar fees payable to any
Person (including Ripplewood) by Holdings, either Borrower or any Subsidiary.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, assets, condition (financial or otherwise), operations, performance,
properties or Projections of Holdings, the Borrowers and their respective
Subsidiaries, taken as a whole, (ii) the rights and remedies of any Secured
Party under any Loan Document or (iii) the ability of any Obligor to perform its
material Obligations under any Loan Document.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE" means each mortgage, deed of trust or agreement executed and
delivered by any Obligor in favor of the Administrative Agent for the benefit of
the Secured Parties pursuant to the requirements of this Agreement in
substantially the form of EXHIBIT I-1 or EXHIBIT I-2 hereto, as applicable,
under which a Lien is granted on the real property and fixtures described
therein, in each case as amended, supplemented, amended and restated or
otherwise modified from time to time.
"NET DEBT PROCEEDS" means, with respect to the incurrence, sale or issuance
by Holdings, either Borrower or any of their respective Subsidiaries of any
Indebtedness (other than Indebtedness permitted by SECTION 7.2.2), the EXCESS
of:
(a) the gross cash proceeds received by Holdings, such Borrower or
such Subsidiaries from such incurrence, sale or issuance,
OVER
(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements actually incurred in connection with
such incurrence, sale or issuance which have not been paid to Affiliates of
Holdings or either Borrower in connection therewith.
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"NET DISPOSITION PROCEEDS" means, with respect to any Disposition of any
assets of Holdings, either Borrower or any of their respective Subsidiaries
(other than pursuant to a Permitted Asset Disposition of the type not described
in clause (f) of the definition thereof), the EXCESS of
(a) the gross cash proceeds received by Holdings, such Borrower or
such Subsidiaries from any such Disposition and any cash payments received
in respect of promissory notes or other non-cash consideration delivered to
such Person in respect thereof,
OVER
(b) the sum (without duplication) of (i) all reasonable and customary
legal, investment banking, brokerage and accounting and other professional
fees and disbursements actually incurred in connection with such
Disposition which have not been paid to Affiliates of Holdings or either
Borrower in connection therewith, (ii) all taxes and other governmental
costs and expenses actually paid or estimated by such Person (in good
faith) to be payable in cash in connection with such Disposition, (iii)
payments made by such Person to retire Indebtedness (other than the Credit
Extensions) of such Person where payment of such Indebtedness is required
in connection with such Disposition and (iv) reserves for purchase price
adjustments and retained fixed liabilities that are payable by such
Borrower or such Subsidiary in cash to the extent required under GAAP in
connection with such Disposition;
PROVIDED, HOWEVER, that if, after the payment of all taxes, purchase price
adjustments and retained fixed liabilities with respect to such Disposition, the
amount of estimated taxes, if any, pursuant to CLAUSE (b)(ii) above exceeded the
amount of taxes, purchase price adjustments and retained fixed liabilities
actually paid in cash in respect of such Disposition, the aggregate amount of
such excess shall, at such time, constitute Net Disposition Proceeds.
"NET EQUITY PROCEEDS" means with respect to the sale or issuance by
Holdings, either Borrower or any of their respective Subsidiaries to any Person
(other than Holdings, either Borrower or any of their respective Subsidiaries)
of any Capital Securities, warrants or options or the exercise of any such
warrants or options (other than pursuant to a Permitted Equity Exchange), the
EXCESS of:
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(a) the gross cash proceeds received by Holdings, such Borrower or
such Subsidiaries from such sale, exercise or issuance,
OVER
(b) all reasonable and customary underwriting commissions and legal,
investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements actually incurred in connection with
such sale or issuance which have not been paid to Affiliates of Holdings or
either Borrower in connection therewith.
"NET INCOME" means, for any period, the aggregate of all amounts (exclusive
of all amounts in respect of any extraordinary gains but including extraordinary
losses) which would be included as net income on the consolidated financial
statements of Holdings for such period.
"NON-DEFAULTING LENDER" means a Lender that is not a Defaulting Lender.
"NON-DOMESTIC LENDER" means any Lender that is not a "United States
person", as defined under Section 7701(a)(30) of the Code.
"NON-EXCLUDED TAXES" means any Taxes other than income, franchise or
similar Taxes imposed on, or measured by, the net income of a Secured Party by a
Governmental Authority in the country or political subdivision therein in which
such Secured Party is organized or in which it maintains its applicable lending
office or in any other jurisdiction to which a Secured Party has any contact
constituting a basis for the imposition of such Taxes, other than a contact
arising solely from the Secured Party having executed, delivered, or performed
its obligations under, or received a payment under, or enforced this Agreement
or any other Loan Document.
"NOTE" means, as the context may require, a Revolving Note, a Term A Note,
a Term B Note or a Swing Line Note.
"OBLIGATIONS" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of Holdings, each Borrower and
each other Obligor arising under or in connection with a Loan Document,
including the principal of and premium, if any, and interest (including interest
accruing during the pendency of any proceeding of the type described in SECTION
8.1.9, whether
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or not allowed in such proceeding) on the Loans and all Reimbursement
Obligations.
"OBLIGOR" means, as the context may require, Holdings, each Borrower and
each other Person (other than a Secured Party and the Seller) obligated under
any Loan Document and their permitted successors and assigns.
"OECD" means the Organization for Economic Cooperation and Development.
"OFFERING MEMORANDUM" means the Offering Memorandum, dated November 10,
1999, captioned "$152,000,000, WRC Media Inc., 152,000 Units Consisting of
12 3/4% Senior Subordinated Notes due 2009 of WRC Media Inc., Weekly Reader
Corporation and JLC Learning Corporation, and 205,656 Shares of common Stock of
WRC Media Inc."
"ORGANIC DOCUMENT" means, relative to any Obligor or the Seller, as
applicable, its certificate of incorporation, by-laws, certificate of
partnership, partnership agreement, certificate of formation, limited liability
agreement and all certificates of designation, shareholder agreements, voting
trusts and similar arrangements applicable to any of such Obligor's or the
Seller's partnership interests, limited liability company interests or
authorized shares of Capital Securities.
"OTHER TAXES" means any and all stamp, documentary or similar taxes, or any
other excise or property taxes or similar levies that arise on account of the
execution, delivery, registration, recording or enforcement of any Loan
Document.
"PARTICIPANT" is defined in SECTION 11.11.2.
"PATENT SECURITY AGREEMENT" means any Patent Security Agreement executed
and delivered by any Obligor in substantially the form of Exhibit B to the
Security and Pledge Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which
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Holdings, either Borrower or any corporation, trade or business that is, along
with Holdings or such Borrower, a member of a Controlled Group, may have
liability, including any liability by reason of having been a substantial
employer within the meaning of Section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under Section 4069 of ERISA.
"PERCENTAGE" means, as the context may require, any Lender's RL Percentage,
Term A Percentage or Term B Percentage.
"PERFECTION CERTIFICATE" means the Perfection Certificate executed and
delivered by an Authorized Officer of each Obligor that is a party to the
Security and Pledge Agreement pursuant to SECTION 5.1.15 or 7.1.8, substantially
in the form of EXHIBIT H hereto, as amended, supplemented, amended and restated
or otherwise modified from time to time.
"PERMITTED ACQUISITION" means an Acquisition by either Borrower or any of
its Subsidiaries in which the following conditions are satisfied:
(a) immediately before and after giving effect to such Acquisition no
Specified Default shall have occurred and be continuing or would result
therefrom (including under SECTION 7.2.1); and
(b) Holdings shall have delivered to the Agents a Compliance
Certificate for the period of four full Fiscal Quarters immediately
preceding such Acquisition (prepared in good faith and in a manner and
using such methodology which is consistent with the most recent financial
statements delivered pursuant to SECTION 7.1.1) giving PRO FORMA effect to
the consummation of such Acquisition and evidencing compliance with the
covenants set forth in SECTION 7.2.4.
"PERMITTED ASSET DISPOSITION" means any Disposition consisting of (a)
Dispositions of inventory in the ordinary course of business, (b) Dispositions
of equipment which, in the aggregate during any Fiscal Year, have a fair market
value or book value, whichever is greater, of not more than $1,500,000, (c)
Dispositions of property that is substantially worn, damaged, obsolete or, in
the judgment of either Borrower, no longer best used or useful in its respective
business or that of any of its respective Subsidiaries, (d) leases or subleases
of real property and
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the licensing of intellectual property in the ordinary course of business, (e)
Dispositions of property to either of the Borrowers or any of their respective
Subsidiaries or (f) Restricted Asset Dispositions in a single transaction or
series of transactions.
"PERMITTED COMMON STOCK EXCHANGE" means a Permitted Equity Exchange of the
type set forth in (i) CLAUSE (iv) of the definition thereof or (ii) CLAUSE (v)
of the definition thereof.
"PERMITTED EQUITY EXCHANGE" means (i) the issuance by JLC or WRC of common
stock upon the exercise of the JLC Warrants or the WRC Warrants, respectively,
(ii) the issuance by JLC and/or WRC of JLC PIK Preferred Equity and/or WRC PIK I
Preferred Equity in exchange for all of the PIK Preferred Equity, (iii) the
issuance by JLC and/or WRC of preferred stock to the holders of the JLC PIK
Preferred Equity and/or the WRC PIK Preferred Equity that is identical to such
JLC PIK Preferred Equity and/or such WRC PIK Preferred Equity, except that such
preferred stock is not subject to restrictions upon transfer under the federal
securities laws, (iv) the issuance of common stock of WRC and WRC XXX XX
Preferred Equity to Holdings pursuant to a transaction permitted under SECTION
11.12, (v) the issuance of common stock of WRC in exchange for the Holdings
(Unit) Common Stock (A) in connection with (1) a Public Offering relating to WRC
or (2) to the extent permitted hereunder, the sale of all or substantially all
of the assets of WRC or (B) in connection with a transaction permitted under
SECTION 11.12 or (vi) in connection with a Public Offering relating to Holdings,
the issuance of common stock of Holdings in exchange for JLC Warrants (or
warrant shares issued by JLC in connection with the exchange of such JLC
Warrants) and/or WRC Warrants (or warrant shares issued by WRC in connection
with the exchange of such WRC Warrants), in each case to the holders of such
Capital Securities so being exchanged.
"PERSON" means any natural person, corporation, limited liability company,
partnership, joint venture, association, trust or unincorporated organization,
Governmental Authority or any other legal entity, whether acting in an
individual, fiduciary or other capacity.
"PIK PREFERRED EQUITY" is defined in CLAUSE (c) of the THIRD RECITAL.
"PIK PREFERRED EQUITY HOLDERS" is defined in CLAUSE (c) of the THIRD
RECITAL.
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"PIK PREFERRED EQUITY ISSUANCE" is defined in CLAUSE (c) of the THIRD
RECITAL.
"PLEDGED SUBSIDIARY" means each Subsidiary in respect of which the
Administrative Agent has been granted a security interest in or a pledge of (i)
any of the Capital Securities of such Subsidiary or (ii) any intercompany notes
of such Subsidiary owing to either Borrower or another Subsidiary.
"PREFERRED STOCKHOLDERS AGREEMENT" is defined in CLAUSE (c) of the THIRD
RECITAL.
"PRI" is defined in CLAUSE (a) of the SECOND RECITAL.
"PROJECTIONS" is defined in CLAUSE (a)(iii) of SECTION 5.1.8.
"PUBLIC MARKET" shall exist if (i) a Public Offering has been consummated
and (ii) any Capital Securities of Holdings has been distributed by means of an
effective registration statement under the Securities Act of 1933, as amended.
"PUBLIC OFFERING" means a public offering of the outstanding Capital
Securities of Holdings or WRC pursuant to an effective registration statement
under the Securities Act of 1933, as amended, resulting in Net Equity Proceeds
of at least $60,000,000..
"PURCHASE AGREEMENT" is defined in the FIRST RECITAL.
"QUARTERLY PAYMENT DATE" means the last Business Day of March, June,
September and December.
"REDEEMABLE CAPITAL STOCK" means, with respect to any Person, any class of
Capital Securities of such Person or any of its Subsidiaries which, either by
its terms, by the terms of any security into which it is convertible or
exchangeable or otherwise, (a) is or upon the happening of an event or passage
of time would be required to be redeemed on or prior to the first anniversary of
the Stated Maturity Date for the Term Loans, (b) is redeemable at the option of
the holder thereof at any time prior to such anniversary or (c) is convertible
into or exchangeable for debt securities of such Person or any of its
Subsidiaries at any time prior to such anniversary.
"REFINANCING" is defined in CLAUSE (c) of the SECOND RECITAL.
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"REFUNDED SWING LINE LOANS" is defined in CLAUSE (b) of SECTION 2.3.2.
"REGISTER" is defined in SECTION 2.7(b).
"REIMBURSEMENT OBLIGATION" is defined in SECTION 2.6.3.
"RELATED FUND" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"RELEASE" means a "RELEASE", as such term is defined in CERCLA.
"REPLACEMENT LENDER" is defined in SECTION 4.9.
"REPLACEMENT NOTICE" is defined in SECTION 4.9.
"REQUIRED LENDERS" means, at any time,
(a) prior to the Closing Date, Lenders having at least 51% of the Term
Loan Commitments and the Revolving Loan Commitments; and
(b) on and after the Closing Date, Non-Defaulting Lenders holding at
least 51% of (i) the Total Exposure Amount of Non- Defaulting Lenders or
(ii) if the Revolving Loan Commitments shall have been terminated or
expired or for purposes of acceleration pursuant to SECTION 8.3, the
aggregate principal amount of the then outstanding Loans and Letter of
Credit Outstandings of Non-Defaulting Lenders.
"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, ET SEQ., as amended.
"RESPONSIBLE OFFICER" means, with respect to any Person, its chief
executive officer, president or any vice president, managing director, chief
operating officer, chief financial or accounting officer, treasurer, controller
or other officer thereof having substantially the same authority and
responsibility; or, with respect to compliance with financial covenants, the
chief financial or accounting officer, treasurer or controller of such Person,
or any other officer having substantially the same authority and responsibility.
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"RESTRICTED ASSET DISPOSITION" means any Disposition other than a
Disposition referred to in CLAUSES (a) through (e) of the definition of
Permitted Asset Disposition having an aggregate fair market value or book value,
whichever is greater, of not more than $2,500,000; PROVIDED that the proceeds
therefrom shall be applied as provided in SECTION 3.1.1(e).
"RESTRICTED PAYMENT" means (a) the declaration or payment of any dividend
(other than dividends payable solely in Capital Securities of either Borrower)
on, or the making of any payment or distribution on account of, or setting apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any class of Capital Securities
of either Borrower or any Subsidiary or any warrants or options to purchase any
such Capital Securities, whether now or hereafter outstanding, or the making of
any other distribution in respect thereof, either directly or indirectly,
whether in cash or property, obligations of either Borrower or any Subsidiary or
otherwise, (b) the exchange of the Capital Securities of either Borrower for the
Capital Securities of Holdings other than in connection with a Permitted Equity
Exchange, (c) the making of any Investment in Holdings by any of its
Subsidiaries, or (d) the payment of any Management Fee.
"REVOLVING LOAN" is defined in SECTION 2.1.1.
"REVOLVING LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation (if any) to make Revolving Loans pursuant to CLAUSE (a) of SECTION
2.1.1. A Lender shall not have a Revolving Loan Commitment if its RL Percentage
is zero.
"REVOLVING LOAN COMMITMENT AMOUNT" means, on any date, $30,000,000, as such
amount may be reduced from time to time pursuant to SECTION 2.2.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earliest of
(a) December 31, 1999 (if the initial Credit Extension has not
occurred on or prior to such date);
(b) November 17, 2005;
(c) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to the terms of this
Agreement; and
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(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding CLAUSE (c) or (d),
the Revolving Loan Commitments shall terminate automatically and without any
further action.
"REVOLVING LOAN LENDER" is defined in CLAUSE (a) of SECTION 2.1.1.
"REVOLVING NOTE" means a joint and several promissory note of the Borrowers
payable to any Revolving Loan Lender, in the form of EXHIBIT A-1 hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Borrowers to such Revolving
Loan Lender resulting from outstanding Revolving Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"RIPPLEWOOD" is defined in CLAUSE (a) of the THIRD RECITAL.
"RL PERCENTAGE" means, relative to any Lender, the applicable percentage
relating to Revolving Loans set forth on SCHEDULE II hereto under the Revolving
Loan Commitment column or set forth in a Lender Assignment Agreement under the
Revolving Loan Commitment column, as such percentage may be adjusted from time
to time pursuant to Lender Assignment Agreements executed by such Lender and its
Assignee Lender and delivered pursuant to SECTION 11.11.1.
"ROLLOVER EQUITY" is defined in CLAUSE (b) of the SECOND RECITAL.
"S&P" means Standard & Poor's Rating Services, a division of XxXxxx-Xxxx,
Inc.
"SEC" means the Securities and Exchange Commission.
"SECURED HEDGING AGREEMENTS" means, collectively, all currency exchange
agreements, interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements, and all other agreements or arrangements
designed to protect either Borrower or any of its Subsidiaries against
fluctuations in interest rates or currency exchange rates that are entered into
in the ordinary course of business to limit risks of currency or interest rate
fluctuations and not for speculative purposes by such Borrower or any such
Subsidiary and under which the
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counterparty of such agreement is (or at the time such agreement was entered
into, was) a Lender or an Affiliate of a Lender.
"SECURED PARTIES" means, collectively, the Lenders, the Issuers, the
Agents, each counterparty to a Secured Hedging Agreement that is (or at the time
such Secured Hedging Agreement was entered into, was) a Lender or an Affiliate
thereof and (in each case), each of their respective successors, transferees and
assigns.
"SECURITY AND PLEDGE AGREEMENT" means the Security and Pledge Agreement
executed and delivered by an Authorized Officer of Holdings, each Borrower and
each Subsidiary Guarantor pursuant to SECTION 5.1.13 or 7.1.8, substantially in
the form of EXHIBIT G-1 hereto, as amended, supplemented, amended and restated
or otherwise modified from time to time.
"SELLER PLEDGE AGREEMENT" means the Pledge Agreement executed and delivered
by an Authorized Officer of Seller pursuant to SECTION 5.1.13, substantially in
the form of EXHIBIT G-2 hereto, as amended, supplemented, amended and restated
or otherwise modified from time to time
"SELLER" is defined in the FIRST RECITAL.
"SOLVENT" means, with respect to any Person and its Subsidiaries on a
particular date, that on such date (a) the fair value of the property of such
Person and its Subsidiaries on a consolidated basis is greater than the total
amount of liabilities, including contingent liabilities, of such Person and its
Subsidiaries on a consolidated basis, (b) the present fair salable value of the
assets of such Person and its Subsidiaries on a consolidated basis is not less
than the amount that will be required to pay the probable liability of such
Person and its Subsidiaries on a consolidated basis on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not believe
that it or its Subsidiaries will, incur debts or liabilities beyond the ability
of such Person and its Subsidiaries to pay as such debts and liabilities mature,
and (d) such Person and its Subsidiaries on a consolidated basis is not engaged
in business or a transaction, and such Person and its Subsidiaries on a
consolidated basis is not about to engage in business or a transaction, for
which the property of such Person and its Subsidiaries on a consolidated basis
would constitute an unreasonably small capital. The amount of Contingent
Liabilities at any time shall be computed as the amount
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that, in light of all the facts and circumstances existing at such time, can
reasonably be expected to become an actual or matured liability.
"SPECIFIED DEFAULT" means the occurrence and continuance of (a) a Default
under SECTION 8.1.1 or SECTION 8.1.9 or (b) any Event of Default.
"STATED AMOUNT" means, on any date and with respect to a particular Letter
of Credit, the total amount then available to be drawn under such Letter of
Credit.
"STATED EXPIRY DATE" is defined in SECTION 2.6.
"STATED MATURITY DATE" means
(a) with respect to all Term A Loans, November 17, 2005;
(b) with respect to all Term B Loans, November 17, 2006; and
(c) with respect to all Revolving Loans and Swing Line Loans, November
17, 2005.
"SUB DEBT DOCUMENTS" means, collectively, the loan agreements, indentures,
note purchase agreements, promissory notes, guarantees, and other instruments
(including the Subordinated Notes) and agreements evidencing the terms of
Subordinated Debt, as amended, supplemented, amended and restated or otherwise
modified in accordance with SECTION 7.2.12.
"SUBORDINATED DEBT" means unsecured Indebtedness of each Obligor (including
the Indebtedness evidenced by the Subordinated Notes) subordinated in right of
payment to the monetary Obligations pursuant to documentation containing
redemption and other prepayment events, maturities, amortization schedules,
covenants, events of default, remedies, acceleration rights, subordination
provisions and other material terms satisfactory to the Required Lenders.
"SUBORDINATED NOTE ISSUANCE" is defined in CLAUSE (b) of the THIRD RECITAL.
"SUBORDINATED NOTES" is defined in CLAUSE (b) of the THIRD RECITAL.
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"SUBSCRIPTION AGREEMENT" means that certain Preferred Stock and Warrants
Subscription Agreement, dated as of November 17, 1999, among Holdings, WRC, JLC
and the buyers named therein.
"SUBSIDIARY" means, with respect to any Person, any corporation, limited
liability company, partnership or other entity of which more than 50% of the
outstanding Voting Securities (irrespective of whether at the time Capital
Securities of any other class or classes of such corporation, limited liability
company, partnership or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term "Subsidiary" shall be a
reference to a Subsidiary of the applicable Borrower.
"SUBSIDIARY GUARANTOR" means each Domestic Subsidiary that has executed and
delivered to the Administrative Agent the Subsidiary Guaranty (or a supplement
thereto).
"SUBSIDIARY GUARANTY" means the subsidiary guaranty executed and delivered
by each Subsidiary Guarantor pursuant to the terms of this Agreement,
substantially in the form of EXHIBIT J hereto, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"SWING LINE LENDER" means, subject to the terms of this Agreement, the
Administrative Agent.
"SWING LINE LOAN" is defined in CLAUSE (b) of SECTION 2.1.1.
"SWING LINE LOAN COMMITMENT" is defined in CLAUSE (b) of SECTION 2.1.1.
"SWING LINE LOAN COMMITMENT AMOUNT" means, on any date, $5,000,000, as such
amount may be reduced from time to time pursuant to SECTION 2.2.
"SWING LINE NOTE" means a joint and several promissory note of the
Borrowers payable to the Swing Line Lender, in the form of EXHIBIT A-4 hereto
(as such promissory note may be amended, endorsed or otherwise modified from
time to time), evidencing the aggregate Indebtedness of the Borrowers to the
Swing Line Lender resulting from outstanding Swing Line Loans, and also means
all other
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promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"SYNDICATION AGENT" is defined in the PREAMBLE.
"SYNTHETIC LEASE" means, as applied to any Person, any lease (including
leases that may be terminated by the lessee at any time) of any property
(whether real, personal or mixed) (i) that is not a capital lease in accordance
with GAAP and (ii) in respect of which the lessee retains or obtains ownership
of the property so leased for federal income tax purposes, other than any such
lease under which that Person is the lessor.
"TAX SHARING AGREEMENT" means the Tax Sharing Agreement, dated November 17,
1999, among Holdings and each of its Subsidiaries, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with the terms thereof.
"TAXES" means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
"TELERATE PAGE 3750" means the display designated as "Page 3750" on the
Telerate Service (or such other page as may replace Page 3750 on the service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association interest settlement rates for Dollar deposits).
"TERM A LOAN" is defined in CLAUSE (a) of SECTION 2.1.3.
"TERM A LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation (if any) to make Term A Loans pursuant to CLAUSE (a) of SECTION
2.1.3.
"TERM A LOAN COMMITMENT AMOUNT" means, on any date, $31,000,000.
"TERM A LOAN COMMITMENT TERMINATION DATE" means the earliest of
(a) December 31, 1999 (if the Term A Loans have not been made on or
prior to such date);
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(b) the Closing Date (immediately after the making of the Term A Loans
on such date); and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in CLAUSE (b) or (c), the Term A Loan
Commitments shall terminate automatically and without any further action.
"TERM A NOTE" means a joint and several promissory note of the Borrowers
payable to any Lender, in the form of EXHIBIT A-2 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting
from outstanding Term A Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"TERM A PERCENTAGE" means, relative to any Lender, the applicable
percentage relating to Term A Loans set forth on SCHEDULE II hereto under the
Term A Loan Commitment column or set forth in a Lender Assignment Agreement
under the Term A Loan Commitment column, as such percentage may be adjusted from
time to time pursuant to Lender Assignment Agreements executed by such Lender
and its Assignee Lender and delivered pursuant to SECTION 11.11.1. A Lender
shall not have any Term A Loan Commitment if its percentage under the Term A
Loan Commitment column is zero.
"TERM B LOAN" is defined in CLAUSE (b) of SECTION 2.1.3.
"TERM B LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation (if any) to make Term B Loans pursuant to CLAUSE (b) of SECTION
2.1.3.
"TERM B LOAN COMMITMENT AMOUNT" means, on any date, $100,000,000.
"TERM B LOAN COMMITMENT TERMINATION DATE" means the earliest of
(a) December 31, 1999 (if the Term B Loans have not been made on or
prior to such date);
(b) the Closing Date (immediately after the making of the Term B Loans
on such date); and
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(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in CLAUSE (b) or (c), the Term B Loan
Commitments shall terminate automatically and without any further action.
"TERM B NOTE" means a joint and several promissory note of the Borrowers
payable to any Lender, in the form of EXHIBIT A-3 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrowers to such Lender resulting
from outstanding Term B Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"TERM B PERCENTAGE" means, relative to any Lender, the applicable
percentage relating to Term B Loans set forth on SCHEDULE II hereto under the
Term B Loan Commitment column or set forth in a Lender Assignment Agreement
under the Term B Loan Commitment column, as such percentage may be adjusted from
time to time pursuant to Lender Assignment Agreements executed by such Lender
and its Assignee Lender and delivered pursuant to SECTION 11.11.1. A Lender
shall not have any Term B Loan Commitment if its percentage under the Term B
Loan Commitment column is zero.
"TERM LOANS" means, collectively, the Term A Loans and the Term B Loans.
"TERMINATION DATE" means the date on which all monetary Obligations have
been paid in full in cash, all Letters of Credit have been terminated or expired
(or the Administrative Agent shall have received immediately available funds in
an amount equal to all Letter of Credit Outstandings, deposited in a cash
collateral account with the Administrative Agent or its designee on terms
satisfactory to the Administrative Agent), all Secured Hedging Agreements have
been terminated and all Commitments shall have terminated.
"TOTAL DEBT" means, on any date, the outstanding principal amount of all
Indebtedness of Holdings, the Borrowers and their respective Subsidiaries of the
type referred to in CLAUSE (a), CLAUSE (b), CLAUSE (c), CLAUSE (f) and CLAUSE
(g), in each case of the definition of "Indebtedness" and any Contingent
Liability in respect of any of the foregoing.
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"TOTAL EXPOSURE AMOUNT" means, on any date of determination (and without
duplication), the outstanding principal amount of all Loans, the aggregate
amount of all Letter of Credit Outstandings and the unfunded amount of the
Commitments.
"TRADEMARK SECURITY AGREEMENT" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit C to
the Security and Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"TRANCHE" means, as the context may require, the Loans constituting Term A
Loans, Term B Loans, Revolving Loans or Swing Line Loans.
"TRANSACTION" is defined in CLAUSE (c) of the SECOND RECITAL.
"TRANSACTION DOCUMENTS" means the Purchase Agreement, the Organic Documents
of each Borrower and Holdings, the Sub Debt Documents, the Preferred
Stockholders Agreement, the Subscription Agreement, the Certificates of
Designation, the Units Shareholders Agreement and the Tax Sharing Agreement, in
each case as amended, supplemented, amended and restated or otherwise modified
from time to time in accordance with SECTION 7.2.12.
"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as in effect from time to time
in the State of New York; PROVIDED, that if, with respect to any Filing
Statement or by reason of any provisions of law, the perfection or the effect of
perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to the applicable Loan Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, U.C.C. means the Uniform Commercial Code as in effect from
time to time in such other jurisdiction for purposes of the provisions of this
Agreement, each Loan Document and any Filing Statement relating to such
perfection or effect of perfection or non-perfection.
"UNIFORM CUSTOMS" is defined in SECTION 11.9.
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"UNITED STATES" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"UNITS SHAREHOLDERS AGREEMENT" means the Stockholders Agreement, dated as
of November 17, 1999, among Holdings, the Borrowers, EAC III, Xxxxxxxxx, Lufkin
& Xxxxxxxx Securities Corporation and Bank of America Securities LLC, as the
same may be amended, supplemented, amended and restated or otherwise in
accordance with the terms hereof.
"VOTING SECURITIES" means, with respect to any Person, Capital Securities
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"WELFARE PLAN" means a "WELFARE PLAN", as such term is defined in Section
3(1) of ERISA.
"WHOLLY OWNED" means any Subsidiary all of the outstanding common stock (or
similar equity interest) of which (other than any director's qualifying shares
or investments by foreign nationals mandated by applicable laws) is owned
directly or indirectly by either Borrower.
"WRC" is defined in the PREAMBLE.
"WRC CERTIFICATE DESIGNATION" means (i) that certain Certificate of
Designation of 15% Senior Preferred Stock due 2011 of WRC, dated November 16,
1999 and made pursuant to Section 151 of the General Corporation Law of the
State of Delaware and (ii) each other certificate of designation in
substantially the same form as the certificate of designation described in
CLAUSE (i) above and relating to the WRC PIK Preferred Equity.
"WRC MIRROR PIK PREFERRED EQUITY" is defined in CLAUSE (e) of the THIRD
RECITAL.
"WRC PIK PREFERRED EQUITY" means, as the context may require, the WRC PIK I
Preferred Equity and/or the WRC XXX XX Preferred Equity, which shall not have an
aggregate liquidation preference exceeding an amount equal to the sum of (x)
$75,000,000, (y) any accrued but unpaid dividends on the PIK Preferred Equity
and (z) the aggregate liquidation preference of additional PIK Preferred Equity
issued in lieu of cash dividends on the PIK Preferred Equity.
"WRC PIK I PREFERRED EQUITY" is defined in CLAUSE (c) of the THIRD RECITAL.
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"WRC XXX XX PREFERRED EQUITY" is defined in CLAUSE (c) of the THIRD
RECITAL.
"WRC WARRANTS" is defined in CLAUSE (c) of the THIRD RECITAL.
SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references in a
Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used in each Loan Document shall be interpreted,
and all accounting determinations and computations thereunder (including under
SECTION 7.2.4 and the definitions used in such calculations) shall be made, in
accordance with those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements referred to in CLAUSE (a) of
SECTION 5.1.8. Unless otherwise expressly provided, all financial covenants and
defined financial terms shall be computed on a consolidated basis for Holdings,
the Borrowers and their respective Subsidiaries, in each case without
duplication.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions of
this Agreement, the Lenders and the Issuers severally agree to make Credit
Extensions as set forth below.
SECTION 2.1.1. REVOLVING LOAN COMMITMENT AND SWING LINE LOAN COMMITMENT.
From time to time on any Business Day occurring from and after the Effective
Date but prior to the Revolving Loan Commitment Termination Date,
(a) each Lender that has a Revolving Loan Commitment (referred to as a
"REVOLVING LOAN LENDER")
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agrees that it will make loans (relative to such Lender, its "REVOLVING
LOANS") to the applicable Borrower equal to such Lender's RL Percentage of
the aggregate amount of each Borrowing of the Revolving Loans requested by
such Borrower to be made on such day; and
(b) the Swing Line Lender agrees that it will make loans (its "SWING
LINE LOANS") to the applicable Borrower equal to the principal amount of
the Swing Line Loan requested by such Borrower to be made on such day. The
Commitment of the Swing Line Lender described in this clause is herein
referred to as its "SWING LINE LOAN COMMITMENT".
On the terms and subject to the conditions hereof, each Borrower may from time
to time borrow, prepay and reborrow Revolving Loans and Swing Line Loans. No
Revolving Loan Lender shall be permitted or required to make any Revolving Loan
if, after giving effect thereto, the aggregate outstanding principal amount of
all Revolving Loans of such Revolving Loan Lender, together with such Lender's
RL Percentage of the aggregate amount of all Swing Line Loans and Letter of
Credit Outstandings, would exceed such Lender's RL Percentage of the then
existing Revolving Loan Commitment Amount. Furthermore, the Swing Line Lender
shall not be permitted or required to make Swing Line Loans if, after giving
effect thereto, (i) the aggregate outstanding principal amount of all Swing Line
Loans would exceed the then existing Swing Line Loan Commitment Amount (ii) the
sum of the aggregate amount of all outstanding Swing Line Loans PLUS the
aggregate amount of all Revolving Loans and Letter of Credit Outstandings would
exceed the Revolving Loan Commitment Amount or (iii) unless otherwise agreed to
by the Swing Line Lender, in its sole discretion, the sum of all Swing Line
Loans and Revolving Loans made by the Swing Line Lender PLUS the Swing Line
Lender's RL Percentage of the aggregate amount of Letter of Credit Outstandings
would exceed the Swing Line Lender's RL Percentage of the then existing
Revolving Loan Commitment Amount.
SECTION 2.1.2. LETTER OF CREDIT COMMITMENT. From time to time on any
Business Day occurring from and after the Effective Date but prior to the
Revolving Loan Commitment Termination Date, the relevant Issuer agrees that it
will
(a) issue one or more letters of credit (relative to such Issuer, its
"LETTER OF CREDIT") for the account of the applicable Borrower or any of
its Subsidiaries
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in the Stated Amount requested by such Borrower on such day; or
(b) extend the Stated Expiry Date of an existing standby Letter of
Credit previously issued hereunder.
No Stated Expiry Date shall be scheduled to occur beyond the earlier of (i) the
Revolving Loan Commitment Termination Date and (ii) unless otherwise agreed to
by the Issuer in its sole discretion, one year from the date of such issuance or
extension. No Issuer shall be permitted or required to issue any Letter of
Credit if, after giving effect thereto, (i) the aggregate amount of all Letter
of Credit Outstandings would exceed the Letter of Credit Commitment Amount or
(ii) the sum of the aggregate amount of all Letter of Credit Outstandings plus
the aggregate principal amount of all Revolving Loans and Swing Line Loans then
outstanding would exceed the Revolving Loan Commitment Amount.
SECTION 2.1.3. TERM LOAN COMMITMENT. On the same day (which shall be a
Business Day) on or prior to the applicable Commitment Termination Date, each
Lender that has a Term A Loan Commitment or a Term B Loan Commitment, as
applicable, agrees that it will
(a) make loans (relative to such Lender, its "TERM A LOANS") to the
applicable Borrower equal to such Lender's Term A Percentage of the
aggregate amount of the Borrowing of Term A Loans requested by such
Borrower to be made on such day; and
(b) make loans (relative to such Lender, its "TERM B LOANS") to the
applicable Borrower equal to such Lender's Term B Percentage of the
aggregate amount of the Borrowing of Term B Loans requested by such
Borrower to be made on such day.
No amounts paid or prepaid with respect to Term Loans may be reborrowed.
SECTION 2.2. REDUCTION OF THE COMMITMENT AMOUNTS. The Commitment Amounts
are subject to reduction from time to time pursuant to this SECTION 2.2.
SECTION 2.2.1. OPTIONAL. The Borrowers may, from time to time on any
Business Day, voluntarily reduce the amount of the Revolving Loan Commitment
Amount, the Swing Line Loan Commitment Amount or the Letter of Credit Commitment
Amount on the Business Day so specified by the Borrowers; PROVIDED, HOWEVER,
that all such reductions shall require at least one
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Business Day's prior notice to the Administrative Agent and be permanent, and
any partial reduction of any Commitment Amount shall be in a minimum amount of
$1,000,000 and in an integral multiple of $500,000. Any optional or mandatory
reduction of the Revolving Loan Commitment Amount pursuant to the terms of this
Agreement which reduces the Revolving Loan Commitment Amount below the sum of
(i) the Swing Line Loan Commitment Amount and (ii) the Letter of Credit
Commitment Amount shall result in an automatic and corresponding reduction of
the Swing Line Loan Commitment Amount and/or Letter of Credit Commitment Amount
(as directed by the Borrowers in a notice to the Administrative Agent delivered
together with the notice of such voluntary reduction in the Revolving Loan
Commitment Amount) to an aggregate amount not in excess of the Revolving Loan
Commitment Amount, as so reduced, without any further action on the part of the
Swing Line Lender or any Issuer.
SECTION 2.2.2. MANDATORY. Following the prepayment in full of the Term
Loans, the Revolving Loan Commitment Amount shall, without any further action,
automatically and permanently be reduced on the date the Term Loans would
otherwise have been required to be prepaid on account of CLAUSE (e), (f), (g) or
(h) of SECTION 3.1.1, in an amount equal to the amount by which the Term Loans
would otherwise be required to be prepaid if Term Loans had been outstanding.
SECTION 2.3. BORROWING PROCEDURES. Loans (other than Swing Line Loans)
shall be made by the Lenders in accordance with SECTION 2.3.1, and Swing Line
Loans shall be made by the Swing Line Lender in accordance with SECTION 2.3.2.
SECTION 2.3.1. BORROWING PROCEDURE. In the case of Loans other than Swing
Line Loans, by delivering a Borrowing Request to the Administrative Agent on or
before 12:00 noon on a Business Day, each Borrower may from time to time
irrevocably request, on not less than one Business Day's notice in the case of
Base Rate Loans, or three Business Days' notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days' notice, that a Borrowing be
made, in the case of LIBO Rate Loans, in a minimum amount of $2,000,000 and an
integral multiple of $1,000,000, in the case of Base Rate Loans, in a minimum
amount of $1,000,000 and an integral multiple of $500,000 or, in either case, in
the unused amount of the applicable Commitment; provided, however, that all of
the initial Loans shall be made as Base Rate Loans. On the terms and subject to
the conditions of this Agreement, each Borrowing shall be comprised of the type
of Loans, and shall be made on the
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Business Day, specified in such Borrowing Request. In the case of Loans other
than Swing Line Loans, on or before 1:00 p.m. on such Business Day each Lender
that has a Commitment to make the Loans being requested shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the applicable Borrower by wire
transfer to the accounts such Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any other
Lender's failure to make any Loan.
SECTION 2.3.2. SWING LINE LOANS. (a) By telephonic notice to the Swing Line
Lender on or before 2:00 p.m. on a Business Day (followed (within one Business
Day) by the delivery of a confirming Borrowing Request), each Borrower may from
time to time prior to the Revolving Loan Commitment Termination Date irrevocably
request that Swing Line Loans be made by the Swing Line Lender in an aggregate
minimum principal amount of $100,000 and an integral multiple of $50,000. All
Swing Line Loans shall be made as Base Rate Loans and shall not be entitled to
be converted into LIBO Rate Loans. The proceeds of each Swing Line Loan shall be
made available by the Swing Line Lender to the applicable Borrower by wire
transfer to the account such Borrower shall have specified in its notice
therefor by the close of business on the Business Day telephonic notice is
received by the Swing Line Lender.
(b) If (i) any Swing Line Loan shall be outstanding for more than four
Business Days, (ii) any Swing Line Loan is or will be outstanding on a date when
either Borrower requests that a Revolving Loan be made, or (iii) any Default
shall occur and be continuing, then each Revolving Loan Lender (other than the
Swing Line Lender) irrevocably agrees that it will, at the request of the Swing
Line Lender, make a Revolving Loan (which shall initially be funded as a Base
Rate Loan) in an amount equal to such Lender's Revolving Loan Percentage of the
aggregate principal amount of all such Swing Line Loans then outstanding (such
outstanding Swing Line Loans hereinafter referred to as the "REFUNDED SWING LINE
LOANS"). On or before 11:00 a.m. on the first Business Day following receipt by
each Revolving Loan Lender of a request to make Revolving Loans as provided in
the preceding sentence, each Revolving Loan Lender shall deposit in an account
specified by the Swing Line Lender the amount
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so requested in same day funds and such funds shall be applied by the Swing Line
Lender to repay the Refunded Swing Line Loans. At the time the Revolving Loan
Lenders make the above referenced Revolving Loans the Swing Line Lender shall be
deemed to have made, in consideration of the making of the Refunded Swing Line
Loans, Revolving Loans in an amount equal to the Swing Line Lender's RL
Percentage of the aggregate principal amount of the Refunded Swing Line Loans.
Upon the making (or deemed making, in the case of the Swing Line Lender) of any
Revolving Loans pursuant to this clause, the amount so funded shall become
outstanding under such Revolving Loan Lender's Revolving Note, if any, and shall
be recorded as an outstanding Revolving Loan of such Lender in the Register and
shall no longer be owed under the Swing Line Note, if any, and the Register
shall be revised to reflect that such Swing Line Loan was repaid. All interest
payable with respect to any Revolving Loans made (or deemed made, in the case of
the Swing Line Lender) pursuant to this clause shall be appropriately adjusted
to reflect the period of time during which the Swing Line Lender had outstanding
Swing Line Loans in respect of which such Revolving Loans were made. Each
Revolving Loan Lender's obligation to make the Revolving Loans referred to in
this clause shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, any
Obligor or any Person for any reason whatsoever; (ii) the occurrence or
continuance of any Default; (iii) any adverse change in the condition (financial
or otherwise) of any Obligor; (iv) the acceleration or maturity of any monetary
Obligations or the termination of any Commitment after the making of any Swing
Line Loan; (v) any breach of any Loan Document by any Person; or (vi) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 10:00
a.m. on a Business Day, each Borrower may from time to time irrevocably elect,
on not less than one Business Day's notice in the case of Base Rate Loans, or
three Business Days' notice in the case of LIBO Rate Loans, and in either case
not more than five Business Days' notice, that all, or any portion in an
aggregate minimum amount of $2,000,000 and an integral multiple of $1,000,000
be, in the case of Base Rate Loans, converted into LIBO Rate Loans or be, in the
case of LIBO Rate Loans, converted into Base Rate Loans or continued as LIBO
Rate Loans (in the absence of delivery of a Continuation/Conversion Notice with
respect to any LIBO Rate
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Loan at least three Business Days (but not more than five Business Days) before
the last day of the then current Interest Period with respect thereto, such LIBO
Rate Loan shall, on such last day, automatically convert to a Base Rate Loan);
PROVIDED, HOWEVER, that (x) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans of all Lenders that have made such
Loans, and (y) no portion of the outstanding principal amount of any Loans may
be continued as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing.
SECTION 2.5. FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; PROVIDED,
HOWEVER, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the applicable Borrower to
repay such LIBO Rate Loan shall nevertheless be to such Lender for the account
of such foreign branch, Affiliate or international banking facility. In
addition, each Borrower hereby consents and agrees that, for purposes of any
determination to be made for purposes of SECTIONS 4.1, 4.2, 4.3 or 4.4, it shall
be conclusively assumed that each Lender elected to fund all LIBO Rate Loans by
purchasing Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. ISSUANCE PROCEDURES. By delivering to the Administrative Agent
an Issuance Request on or before 10:00 a.m. on a Business Day, each Borrower may
from time to time irrevocably request on not less than three nor more than ten
Business Days' notice, in the case of an initial issuance of a Letter of Credit
and not less than three Business Days' prior notice, in the case of a request
for the extension of the Stated Expiry Date of a standby Letter of Credit (in
each case, unless a shorter notice period is agreed to by the applicable Issuer,
in its sole discretion), that such Issuer issue, or extend (in the case of a
standby Letter of Credit) the Stated Expiry Date of, a Letter of Credit on
behalf of such Borrower (whether issued for the account of or on behalf of such
Borrower or any Subsidiary Guarantor) in such form as may be requested by such
Borrower and approved by such Issuer, solely for the purposes described in
SECTION 7.1.7. Notwithstanding anything to the contrary contained herein or in
any separate application for any Letter of Credit, such Borrower hereby
acknowledges and agrees that it shall be jointly and severally obligated to
reimburse the applicable Issuer upon each Disbursement paid
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under a Letter of Credit, and it shall be deemed to be the obligor for purposes
of each such Letter of Credit issued hereunder (whether the account party on
such Letter of Credit is such Borrower, the other Borrower or a Subsidiary
Guarantor). Each Letter of Credit shall by its terms be stated to expire on a
date (its "STATED EXPIRY DATE") no later than the earlier to occur of (i) the
Revolving Loan Commitment Termination Date or (ii) (unless otherwise agreed to
by an Issuer, in its sole discretion) one year from the date of its issuance or
extension. Each Issuer will make available to the beneficiary thereof the
original of the Letter of Credit which it issues. It is understood and agreed
that Letters of Credit issued hereunder need not be issued in any minimum
amount.
SECTION 2.6.1. OTHER LENDERS' PARTICIPATION. Upon the issuance of each
Letter of Credit, and without further action, each Revolving Loan Lender (other
than such Issuer) shall be deemed to have irrevocably purchased, to the extent
of its Percentage to make Revolving Loans, a participation interest in such
Letter of Credit (including the Contingent Liability and any Reimbursement
Obligation with respect thereto), and such Revolving Loan Lender shall, to the
extent of its Percentage to make Revolving Loans, be responsible for reimbursing
within one Business Day the Issuer for Reimbursement Obligations which have not
been reimbursed by the applicable Borrower in accordance with SECTION 2.6.3. In
addition, such Revolving Loan Lender shall, to the extent of its Percentage to
make Revolving Loans, be entitled to receive a ratable portion of the Letter of
Credit fees payable pursuant to SECTION 3.3.3 with respect to each Letter of
Credit (other than the issuance fees payable to an Issuer of such Letter of
Credit pursuant to the last sentence of SECTION 3.3.3) and of interest payable
pursuant to SECTION 3.2 with respect to any Reimbursement Obligation. To the
extent that any Revolving Loan Lender has reimbursed any Issuer for a
Disbursement, such Lender shall be entitled to receive its ratable portion of
any amounts subsequently received (from such Borrower or otherwise) in respect
of such Disbursement.
SECTION 2.6.2. DISBURSEMENTS; CONVERSION TO REVOLVING LOANS. An Issuer will
notify the applicable Borrower and the Administrative Agent promptly of the
presentment for payment of any Letter of Credit issued by such Issuer, together
with notice of the date (the "DISBURSEMENT DATE") such payment shall be made
(each such payment, a "DISBURSEMENT"). Subject to the terms and provisions of
such Letter of Credit, the applicable Issuer shall make such payment to the
beneficiary (or its designee) of such Letter
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of Credit. Prior to 11:00 a.m. on the first Business Day following the later of
the receipt of such notice by such Borrower and the Administrative Agent and the
Disbursement Date (the "DISBURSEMENT DUE DATE"), the applicable Borrower will
reimburse the Administrative Agent, for the account of the applicable Issuer,
for all amounts which such Issuer has disbursed under such Letter of Credit,
together with interest thereon at a rate per annum equal to the rate per annum
then in effect for Base Rate Loans (with the then Applicable Margin for
Revolving Loans accruing on such amount) pursuant to SECTION 3.2 for the period
from the Disbursement Date through the date of such reimbursement; PROVIDED,
HOWEVER, that, if no Specified Default shall have then occurred and be
continuing, unless the applicable Borrower has notified the Administrative Agent
no later than one Business Day prior to the Disbursement Due Date that it will
reimburse such Issuer for the applicable Disbursement, then the making of such
Disbursement shall be deemed to be a Borrowing of Revolving Loans constituting
Base Rate Loans and following the giving of notice thereof by the Administrative
Agent to the Lenders, each Lender with a Revolving Loan Commitment (other than
the Issuer) will deliver to the Issuer on the Disbursement Due Date immediately
available funds in an amount equal to such Lender's Percentage of such
Borrowing. Without limiting in any way the foregoing and notwithstanding
anything to the contrary contained herein or in any separate application for any
Letter of Credit, each Borrower hereby acknowledges and agrees that it shall be
obligated to reimburse the applicable Issuer upon each Disbursement of a Letter
of Credit, and it shall be deemed to be the obligor for purposes of each such
Letter of Credit issued hereunder (whether the account party on such Letter of
Credit is such Borrower, the other Borrower or a Subsidiary of either such
Borrower).
SECTION 2.6.3. REIMBURSEMENT. The obligation (a "REIMBURSEMENT OBLIGATION")
of each Borrower under SECTION 2.6.2 to reimburse an Issuer with respect to each
Disbursement (including interest thereon), and, upon the failure of such
Borrower to reimburse an Issuer, each Revolving Loan Lender's obligation under
SECTION 2.6.1 to reimburse an Issuer, shall be absolute and unconditional under
any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which such Borrower or such Revolving Loan Lender, as the
case may be, may have or have had against such Issuer or any Lender, including
any defense based upon the failure of any Disbursement to conform to the terms
of the applicable Letter of Credit (if, in such Issuer's good faith opinion,
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such Disbursement is determined to be appropriate) or any nonapplication or
misapplication by the beneficiary of the proceeds of such Letter of Credit;
PROVIDED, HOWEVER, that after paying in full its Reimbursement Obligation
hereunder, nothing herein shall adversely affect the right of such Borrower or
such Lender, as the case may be, to commence any proceeding against an Issuer
for any wrongful Disbursement made by such Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of such Issuer.
SECTION 2.6.4. DEEMED DISBURSEMENTS. Upon the occurrence and during the
continuation of any Default under SECTION 8.1.9 or upon notification by the
Administrative Agent (acting at the direction of the Required Lenders) to each
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
(a) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to such Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuers of such Letters of
Credit (notwithstanding that such amount may not in fact have been paid or
disbursed); and
(b) such Borrower shall be immediately obligated to reimburse the
Issuers for the amount deemed to have been so paid or disbursed by such
Issuers.
Amounts payable by each Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as collateral
security for the Reimbursement Obligations. When all Defaults giving rise to the
deemed disbursements under this Section have been cured or waived the
Administrative Agent shall return to such Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section which have not been
applied to the satisfaction of the Reimbursement Obligations.
SECTION 2.6.5. NATURE OF REIMBURSEMENT OBLIGATIONS. Each Borrower, each
other Obligor, the Seller and, to the extent set forth in SECTION 2.6.1, each
Revolving Loan Lender shall assume all risks of the acts, omissions or misuse of
any Letter of Credit by the beneficiary thereof. No Issuer (except to the extent
of its own gross negligence or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any Letter of Credit or
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any document submitted by any party in connection with the application for
and issuance of a Letter of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged;
(b) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any instrument transferring or assigning or purporting to
transfer or assign a Letter of Credit or the rights or benefits thereunder
or the proceeds thereof in whole or in part, which may prove to be invalid
or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, telecopier, cable, telegraph, telex or
otherwise; or
(e) any loss or delay in the transmission or otherwise of any document
or draft required in order to make a Disbursement under a Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Revolving Loan Lender hereunder.
In furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon each
Obligor, the Seller and each such Secured Party, and shall not put such Issuer
under any resulting liability to any Obligor, the Seller or any Secured Party,
as the case may be. Notwithstanding the foregoing, the Lenders (other than the
applicable Issuer in its capacity as such) shall not be liable for any
obligation resulting from the gross negligence or willful misconduct (as
determined by a court of competent jurisdiction) of the applicable Issuer with
respect to any Letter of Credit.
SECTION 2.7. REGISTER; NOTES. (a) Each Lender may maintain in accordance
with its usual practice an account or accounts evidencing the Indebtedness of
each Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to such Lender
from time to time hereunder. In the case of a Lender that does not request,
pursuant to CLAUSE (c) below, execution and delivery of a Note
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evidencing the Loans made by such Lender to the Borrowers, such account or
accounts shall, to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on each Borrower
absent manifest error; PROVIDED, HOWEVER, that the failure of any Lender to
maintain such account or accounts shall not limit or otherwise affect any
Obligations of either Borrower, any other Obligor or the Seller.
(b) Each Borrower hereby designates the Administrative Agent to serve as
such Borrower's agent, solely for the purpose of this CLAUSE (b), to maintain a
register (the "REGISTER") in which the Administrative Agent will record each
Lender's Commitments, the Loans made by each Lender and each repayment in
respect of the principal amount of the Loans of each Lender and annexed to which
the Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to SECTION 11.11.1. Failure to
make any recordation, or any error in such recordation, shall not affect either
Borrower's obligation in respect of such Loans. The entries in the Register
shall be conclusive, in the absence of manifest error, and each Borrower, each
Agent and each Lender shall treat each Person in whose name a Loan (and as
provided in CLAUSE (c) below the Note evidencing such Loan, if any) is
registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender's
Commitment and the Loans made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer in the Register. Any assignment or transfer of a Lender's Commitment
and/or the Loans made pursuant thereto shall be registered in the Register only
upon delivery to the Administrative Agent of a Lender Assignment Agreement duly
executed by the assignor and assignee thereof. No assignment or transfer of a
Lender's Commitment or the Loans made pursuant thereto shall be effective unless
such assignment or transfer shall have been recorded in the Register by the
Administrative Agent as provided in this Section. The Administrative Agent
agrees to record in the Register any such assignment or transfer of a Lender's
Commitment or the Loans made pursuant thereto promptly upon its receipt of a
Lender Assignment Agreement duly executed by the assignor and assignee thereof
in accordance with SECTION 11.11.1.
(c) Each Borrower agrees that, upon the request to the Administrative Agent
by any Lender, such Borrower will execute and deliver to such Lender, as
applicable, a Revolving Note, a Term A Note, a Term B Note and/or a Swing
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Line Note evidencing the Loans made by such Lender. Each Borrower hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender's Notes (or on any continuation of
such grid), which notations, if made, shall evidence, INTER ALIA, the date of,
the outstanding principal amount of, and the interest rate and Interest Period
applicable to the Loans evidenced thereby. Such notations shall, to the extent
not inconsistent with the notations made by the Administrative Agent in the
Register, be conclusive and binding on each Borrower absent manifest error;
PROVIDED, HOWEVER, that the failure of any Lender to make any such notations or
any error in any such notations shall not limit or otherwise affect any
Obligations of either Borrower, any other Obligor or the Seller. The Loans
evidenced by any such Note and interest thereon shall at all times (including
after assignment pursuant to SECTION 11.11.1) be represented by one or more
Notes payable to the order of the payee named therein and its registered
assigns. A Note and the obligation evidenced thereby may be assigned or
otherwise transferred in whole or in part only by registration of such
assignment or transfer of such Note and the obligation evidenced thereby in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of an obligation evidenced by a Note shall be registered in the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such obligation, accompanied by a Lender Assignment Agreement
duly executed by the assignor thereof, and thereupon, if requested by the
assignee, one or more new Notes shall be issued to the designated assignee and
the old Note shall be returned by the Administrative Agent to the Borrowers
marked "exchanged". No assignment of a Note and the obligation evidenced thereby
shall be effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. REPAYMENTS AND PREPAYMENTS; APPLICATION. Each Borrower jointly
and severally agrees that the Loans shall be repaid and prepaid pursuant to the
following terms.
SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS. The Borrowers shall jointly and
severally repay in full the unpaid principal amount of each Loan upon the
applicable Stated Maturity Date therefor. Prior thereto, payments and
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prepayments of Loans shall or may be made jointly and severally by the
Borrowers as set forth below.
(a) From time to time on any Business Day, each Borrower may make
a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any
(i) Loans (other than Swing Line Loans); PROVIDED, HOWEVER,
that (A) any such prepayment of the Term Loans shall be made PRO
RATA among Term A Loans and Term B Loans, and PRO RATA among Term
A Loans and Term B Loans of the same type and, if applicable,
having the same Interest Period of all Lenders that have made
such Term A Loans or Term B Loans (to be applied as set forth in
Section 3.1.2) and any such prepayment of Revolving Loans shall
be made PRO RATA among the Revolving Loans of the same type and,
if applicable, having the same Interest Period of all Lenders
that have made such Revolving Loans; (B) all such voluntary
prepayments shall require at least one but no more than five
Business Days' prior written notice to the Administrative Agent;
and (C) all such voluntary partial prepayments shall be, in the
case of LIBO Rate Loans, in an aggregate minimum amount of
$1,000,000 and an integral multiple of $1,000,000 and, in the
case of Base Rate Loans, in an aggregate minimum amount of
$500,000 and an integral multiple of $100,000; and
(ii) Swing Line Loans; PROVIDED, that (A) all such voluntary
prepayments shall require prior telephonic notice to the Swing
Line Lender on or before 1:00 p.m. on the day of such prepayment
(such notice to be confirmed in writing within 24 hours
thereafter); and (B) all such voluntary partial prepayments shall
be in an aggregate minimum amount of $100,000 and an integral
multiple of $50,000.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans and (ii)
the aggregate amount of all Letter of Credit Outstandings exceeds the
Revolving Loan Commitment Amount (as it may be reduced from time to
time pursuant to this Agreement), the Borrowers shall jointly and
severally make a mandatory prepayment of Revolving Loans or Swing Line
Loans (or both) and, if necessary, deposit cash collateral with
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the Administrative Agent or its designee pursuant to an agreement
satisfactory to the Administrative Agent to collateralize Letter of
Credit Outstandings, in an aggregate amount equal to such excess.
(c) On the Stated Maturity Date for Term A Loans and on each
Quarterly Payment Date occurring during any period set forth below,
the Borrowers shall jointly and severally make a scheduled repayment
of the aggregate outstanding principal amount, if any, of all Term A
Loans in an amount equal to the amount set forth below opposite such
Stated Maturity Date or such Quarterly Payment Date, as applicable:
Amount of Required
Period Principal Repayment
------ -------------------
Effective Date through (and
including) 09/30/00 $387,500.00
10/01/00 through (and
including) 09/30/01 $775,000.00
10/01/01 through (and
including) 09/30/02 $1,162,500.00
10/01/02 through (and
including) 09/30/03 $1,550,000.00
10/01/03 through (and
including) 09/30/04 $1,937,500.00
10/01/04 through (and
including) 09/30/05 $1,550,000.00
Stated Maturity Date for $1,550,000.00 or the
Term A Loans then outstanding
principal amount of all
Term A Loans, if
different.
(d) On the Stated Maturity Date for Term B Loans and on each
Quarterly Payment Date occurring during any period set forth below,
the Borrowers shall jointly and severally make a scheduled repayment
of the aggregate outstanding principal amount, if any, of all Term B
Loans in an amount equal to the amount set forth below opposite such
Stated Maturity Date or such Quarterly Payment Date, as applicable:
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Amount of Required
Period Principal Repayment
------ -------------------
Effective Date through (and
including) 09/30/00 $250,000.00
10/01/00 through (and
including) 09/30/01 $250,000.00
10/01/01 through (and
including) 09/30/02 $250,000.00
10/01/02 through (and
including) 09/30/03 $250,000.00
10/01/03 through (and
including) 09/30/04 $250,000.00
10/01/04 through (and
including) 09/30/05 $250,000.00
10/01/05 through (and
including) 09/30/06 $18,800.000.00
Stated Maturity Date for $18,800,000.00 or the
Term B Loans then outstanding
principal amount of
all Term B Loans, if
different.
(e) The Borrowers shall, following the receipt by Holdings,
either Borrower or any of their respective Subsidiaries of any
Casualty Proceeds in excess of $250,000 (individually or in the
aggregate (when taken together with all other Casualty Proceeds and
all Net Disposition Proceeds)) over the course of a Fiscal Year,
deliver to the Agents a calculation of the amount of such Casualty
Proceeds and jointly and severally make a mandatory prepayment of the
Term Loans in an amount equal to 100% of such Casualty Proceeds within
30 days of the receipt thereof to be applied as set forth in SECTION
3.1.2; PROVIDED, HOWEVER, that no mandatory prepayment on account of
Casualty Proceeds shall be required under this clause if the Borrowers
inform the Agents in writing no later than 30 days following the
occurrence of the Casualty Event resulting in such Casualty Proceeds
of their or such Subsidiary's good faith intention to apply such
Casualty Proceeds to (x) the rebuilding or replacement of the damaged,
destroyed or condemned assets or property or (y) the acquisition of
long-term assets that are necessary or useful in the operation of the
Borrowers' and their respective Subsidiaries' business
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activities in accordance with SECTION 7.2.1, and the Borrowers or such
Subsidiary in fact uses such Casualty Proceeds to rebuild or replace
such assets or property or acquire such long-term assets within 360
days following the receipt of such Casualty Proceeds, with the amount
of such Casualty Proceeds unused after such 360-day period being
applied to the Term Loans pursuant to SECTION 3.1.2; PROVIDED,
FURTHER, HOWEVER, that (i) at any time when any Specified Default
shall have occurred and be continuing, all Casualty Proceeds (together
with Net Disposition Proceeds not applied as provided in CLAUSE (f)
below) shall be deposited in an account maintained with the
Administrative Agent to pay for such rebuilding, replacement or
acquisition whenever no Specified Default is then continuing or except
as otherwise agreed to by the Agents for disbursement at the request
of the Borrowers or such Subsidiary, as the case may be, or (ii) if
all such Casualty Proceeds (together with Net Disposition Proceeds not
applied as provided in CLAUSE (f) below) aggregating in excess of
$250,000 have not yet been applied as described in the notice required
above (or in accordance with CLAUSE (f) below), all such Casualty
Proceeds and Net Disposition Proceeds shall be deposited in an account
maintained with the Administrative Agent for disbursement at the
request of the Borrowers or such Subsidiary, as the case may be, to be
used for the purpose(s) set forth in such written notice(s).
(f) The Borrowers shall, following the receipt by Holdings,
either Borrower or any of their respective Subsidiaries of any Net
Disposition Proceeds in excess of $250,000 (individually or in the
aggregate (when taken together with all other Net Disposition Proceeds
and all Casualty Proceeds)) over the course of a Fiscal Year, deliver
to the Agents a calculation of the amount of such Net Disposition
Proceeds and jointly and severally make a mandatory prepayment of the
Term Loans in an amount equal to 100% of such Net Disposition Proceeds
within one Business Day of the receipt thereof to be applied as set
forth in SECTION 3.1.2; PROVIDED, HOWEVER, that no mandatory
prepayment on account of Net Disposition Proceeds shall be required
under this clause if the Borrowers inform the Agents in writing no
later than one Business Day following the receipt of such Net
Disposition Proceeds of their or such Subsidiary's good faith
intention to apply such Net Disposition Proceeds to (x) the
replacement of the assets or property that was the subject of the
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Disposition that resulted in such Net Disposition Proceeds or (y) the
acquisition of long-term assets that are necessary or useful in the
operation of the Borrowers' and their respective Subsidiaries'
business activities in accordance with SECTION 7.2.1, and the
Borrowers or such Subsidiary in fact uses such Net Disposition
Proceeds to replace such assets or property or acquire such long-term
assets within 360 days following the receipt of such Net Disposition
Proceeds, with the amount of such Net Disposition Proceeds unused
after such 360-day period being applied to the Term Loans pursuant to
SECTION 3.1.2; PROVIDED, FURTHER, HOWEVER, that (i) at any time when
any Specified Default shall have occurred and be continuing, all Net
Disposition Proceeds (together with Casualty Proceeds not applied as
provided in CLAUSE (e) above) shall be deposited in an account
maintained with the Administrative Agent to pay for such replacement
or acquisition whenever no Specified Default is then continuing or
except as otherwise agreed to by the Agents for disbursement at the
request of the Borrowers or such Subsidiary, as the case may be, or
(ii) if all such Net Disposition Proceeds (together with Casualty
Proceeds not applied as provided in CLAUSE (e) above) aggregating in
excess of $250,000 have not been applied as described in the notice
required above (or in accordance with CLAUSE (e) above), all such Net
Disposition Proceeds and Casualty Proceeds shall be deposited in an
account maintained with the Administrative Agent for disbursement at
the request of the Borrowers or such Subsidiary, as the case may be,
to be used for the purpose(s) set forth in such written notice(s).
(g) The Borrowers shall, no later than five Business Days
following the delivery by Holdings of its annual audited financial
reports required pursuant to CLAUSE (c) of SECTION 7.1.1 (beginning
with the financial reports delivered in respect of the 2000 Fiscal
Year), deliver to the Agents a calculation of the Excess Cash Flow for
the Fiscal Year last ended and jointly and severally make a mandatory
prepayment of the Term Loans in an amount equal to 50% of the Excess
Cash Flow (if any) for such Fiscal Year, to be applied as set forth in
SECTION 3.1.2.
(h) Concurrently with the receipt by Holdings, either Borrower or
any of their respective Subsidiaries of any Net Debt Proceeds or Net
Equity Proceeds, the Borrowers shall deliver to the Agents a
calculation of
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the amount of such Net Debt Proceeds or Net Equity Proceeds, as the
case may be, and jointly and severally make a mandatory prepayment of
the Term Loans in an amount equal to 100% of such Net Debt Proceeds or
50% of such Net Equity Proceeds, as the case may be, to be applied as
set forth in SECTION 3.1.2.
(i) Immediately upon any acceleration of the Stated Maturity Date
of any Loans pursuant to SECTION 8.2 or SECTION 8.3, the Borrowers
shall jointly and severally repay all the Loans, unless, pursuant to
SECTION 8.3, only a portion of all the Loans is so accelerated (in
which case the portion so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by SECTION 3.1.3 and SECTION 4.4.
SECTION 3.1.2. APPLICATION. Amounts prepaid pursuant to SECTION 3.1.1 shall
be applied as set forth in this Section.
(a) Subject to CLAUSE (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such
prepayment or repayment, FIRST, to the principal amount thereof being
maintained as Base Rate Loans, and SECOND, subject to the terms of
SECTION 4.4, to the principal amount thereof being maintained as LIBO
Rate Loans.
(b) Each prepayment of Term Loans made pursuant to CLAUSES (a),
(e), (f), (g) and (h) of SECTION 3.1.1 shall be applied PRO RATA to a
mandatory prepayment of the outstanding principal amount of all Term A
Loans and Term B Loans (with the amount of such prepayment of the Term
A Loans and the Term B Loans being applied to the remaining Term A
Loan or Term B Loan, as the case may be, amortization payments, PRO
RATA in accordance with the amount of each such remaining Term Loan
amortization payment); PROVIDED, HOWEVER, that in the case of any such
prepayment of Term B Loans made pursuant to CLAUSE (e), (f), (g) and
(h) of SECTION 3.1.1, any Lender that has Term B Loans may elect not
to have such Loans prepaid by delivering a notice to the Agents at
least one Business Day prior to the date that such prepayment is to be
made in which notice such Lender shall decline to have such Loans
prepaid with the amounts set forth above, in which case the amounts
that would have been applied to a
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prepayment of such Lender's Term B Loans shall instead be applied to a
prepayment of the principal amount (if any) of all outstanding Term A
Loans until all outstanding Term A Loans have been prepaid in full,
then applied to a prepayment of such Lender's Term B Loans.
SECTION 3.1.3. PREPAYMENT OF TERM B LOANS. In the event that either
Borrower makes a voluntary prepayment pursuant to CLAUSE (a) of SECTION 3.1.1 or
is required to make a mandatory prepayment of the Term B Loans pursuant to
CLAUSES (f) or (h) of SECTION 3.1.1 during any period set forth below, such
Borrower shall pay the amount of such prepayment plus an amount (the "PREPAYMENT
PREMIUM") equal to the percentage of the principal amount so voluntarily prepaid
or required to be prepaid during such period as follows:
Closing Date through 2.00%
and including 11/17/2000
11/18/2000 through 1.00%
and including 11/17/2001
11/18/2001 0%
and thereafter
PROVIDED, that if any Lender declines to have its Term B Loans prepaid pursuant
to the proviso to CLAUSE (b) of SECTION 3.1.2, the amount of the prepayment to
be applied to the Term A Loans and/or Revolving Loans shall not include the
Prepayment Premium.
SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable by the Borrowers jointly and
severally in accordance with the terms set forth below.
SECTION 3.2.1. RATES. Subject to SECTION 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice,
each Borrower may elect that Loans comprising a Borrowing accrue interest at a
rate per annum:
(a) on that portion maintained from time to time as a Base Rate Loan,
equal to the sum of the Alternate Base Rate from time to time in effect
plus the Applicable Margin; PROVIDED that all Swing Line Loans shall always
accrue interest at the then effective
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Applicable Margin for Revolving Loans maintained as Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. POST-DEFAULT RATES. Upon the occurrence and during the
continuance of an Event of Default, the Borrowers shall jointly and severally
pay, but only to the extent permitted by law, interest (after as well as before
judgment) in an amount equal to (a) in the case of any principal of LIBO Rate
Loans or accrued interest thereon, the rate that would otherwise be applicable
to such LIBO Rate Loans pursuant to SECTION 3.2.1 plus 2%, (b) in the case of
any principal of Base Rate Loans or accrued interest thereon, the rate that
would otherwise be applicable to such Base Rate Loans pursuant to SECTION 3.2.1
plus 2% and (c) in the case of any accrued commitment fees, letter of credit
fees or other monetary Obligations, the rate that would otherwise be applicable
to Revolving Loans that are maintained as Base Rate Loans pursuant to SECTION
3.2.1 plus 2%.
SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the date occurring on each three-month interval
occurring after the first day of such Interest Period);
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(e) with respect to any Base Rate Loans converted into LIBO Rate
Loans on a day when interest would not otherwise have been payable
pursuant to CLAUSE (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to SECTION 8.2 or SECTION 8.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. FEES. The Borrowers agree to jointly and severally pay the
fees set forth below. All such fees shall be non-refundable.
SECTION 3.3.1. COMMITMENT FEE. The Borrowers agree to jointly and severally
pay to the Administrative Agent for the account of each Lender, for the period
(including any portion thereof when any of its Commitments are suspended by
reason of either Borrower's inability to satisfy any condition of ARTICLE V)
commencing on the Effective Date and continuing through the applicable
Commitment Termination Date, a commitment fee in an amount equal to the
Applicable Commitment Fee, in each case on such Lender's Percentage of the sum
of the average daily unused portion of the applicable Commitment Amount (net of
Letter of Credit Outstandings, in the case of the Revolving Loan Commitment
Amount). All commitment fees payable pursuant to this Section shall be
calculated on a year comprised of 360 days and payable by the Borrowers jointly
and severally in arrears on the Effective Date and thereafter on each Quarterly
Payment Date, commencing with the first Quarterly Payment Date following the
Effective Date, and on the Revolving Loan Commitment Termination Date. The
making of Swing Line Loans shall not constitute usage of the Revolving Loan
Commitment with respect to the calculation of commitment fees to be paid by the
Borrowers to the Lenders. Any term or provision hereof to the contrary
notwithstanding, commitment fees payable for any period prior to the Closing
Date shall be payable in accordance with the Fee Letter.
SECTION 3.3.2. AGENTS' FEES. (a) The Borrowers agree to jointly and
severally pay to the Administrative Agent, for its own account, the fees in the
amounts and on the dates set forth in the Fee Letter.
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(b) The Borrowers agree to jointly and severally pay to the Syndication
Agent, for its own account, the fees in the amounts and on the dates set forth
in the Fee Letter.
SECTION 3.3.3. LETTER OF CREDIT FEE. The Borrowers agree to jointly and
severally pay to the Administrative Agent, for the PRO RATA account of the
applicable Issuer and each Revolving Loan Lender, a Letter of Credit fee in an
amount equal to the then effective Applicable Margin for Revolving Loans
maintained as LIBO Rate Loans, multiplied by the Stated Amount of each such
Letter of Credit, such fees being payable quarterly in arrears on each Quarterly
Payment Date following the date of issuance of each Letter of Credit and on the
Revolving Loan Commitment Termination Date. The Borrowers further agree to
jointly and severally pay in advance to the applicable Issuer on the date of
each issuance and extension of each Letter of Credit issued or extended by such
Issuer and quarterly thereafter on each Quarterly Payment Date following the
date of such issuance or extension and on the Revolving Loan Commitment
Termination Date an issuance fee in an amount equal to 1/4 of 1% per annum on
the Stated Amount of such Letter of Credit. The Borrowers further agree to
jointly and severally pay to the applicable Issuer such administrative fee and
other fees, if any, in connection with Letters of Credit in such amounts and at
such times as the applicable Issuer and the Borrowers shall agree from time to
time.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO RATE LENDING UNLAWFUL. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrowers and the
Administrative Agent, be conclusive and binding on the Borrowers) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any Governmental Authority asserts that it is unlawful, for such
Lender to make or continue any Loan as, or to convert any Loan into, a LIBO Rate
Loan, the obligations of such Lender to make, continue or convert any such LIBO
Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBO Rate Loans payable to such
Lender shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion.
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SECTION 4.2. DEPOSITS UNAVAILABLE. If the Administrative Agent shall have
determined that
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or
(b) by reason of circumstances affecting its relevant market, adequate
means do not exist for ascertaining the interest rate applicable hereunder
to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Borrowers and the
Lenders, the obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to
make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans
shall forthwith be suspended until the Administrative Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 4.3. INCREASED LIBO RATE LOAN COSTS, ETC. The Borrowers agree to
jointly and severally reimburse each Lender and Issuer for any increase in the
cost to such Lender or Issuer of, or any reduction in the amount of any sum
receivable by such Secured Party in respect of, such Secured Party's Commitments
and the making of Credit Extensions hereunder (including the making, continuing
or maintaining (or of its obligation to make or continue) any Loans as, or of
converting (or of its obligation to convert) any Loans into, LIBO Rate Loans)
that arise in connection with any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in after the date
hereof of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority, except
for any such changes with respect to increased capital costs and Taxes (which
are governed by SECTIONS 4.5 and 4.6, respectively). Each affected Secured Party
shall promptly notify the Administrative Agent and the Borrowers in writing of
the occurrence of any such event, stating the reasons therefor and the
additional amount required fully to compensate such Secured Party for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrowers jointly and severally directly to such Secured Party within five
days of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Borrowers.
SECTION 4.4. FUNDING LOSSES. In the event any Lender shall incur any loss
or expense (including any loss or
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expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to make or continue any portion of the
principal amount of any Loan as, or to convert any portion of the principal
amount of any Loan into, a LIBO Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
ARTICLE III or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor;
then, upon the written notice of such Lender to the Borrowers (with a copy to
the Administrative Agent), the Borrowers shall, within five days of its receipt
thereof, jointly and severally pay directly to such Lender such amount as will
(in the reasonable determination of such Lender) reimburse such Lender for such
loss or expense. Such written notice shall, in the absence of manifest error, be
conclusive and binding on the Borrowers.
SECTION 4.5. INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority affects
or would affect the amount of capital required or expected to be maintained by
any Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of the Commitments or the Credit Extensions made, or the Letters of Credit
participated in, by such Secured Party is reduced to a level below that which
such Secured Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then upon notice from time to time by such
Secured Party to the Borrowers, the Borrowers shall within five days following
receipt of such notice jointly and severally pay directly to such Secured Party
additional amounts sufficient to compensate such Secured Party or such
controlling Person for such reduction
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in rate of return; PROVIDED that such Secured Party shall if requested by the
Borrowers use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event or take other action so long as such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of this Section; PROVIDED,
HOWEVER, that no Borrower shall have any obligation to pay any such additional
amount under this SECTION 4.5 with respect to any such change unless such Lender
shall have notified the applicable Borrower of its demand within 120 days after
the date upon which such Lender or such controlling Person has obtained audited
financial statements with respect to the fiscal year of such Lender or such
controlling Person in which such change occurred. Nothing in the first proviso
to the immediately preceding sentence shall affect or postpone any of the
Obligations of such Borrower or the right of any Lender provided in this
Section. A statement of such Secured Party as to any such additional amount or
amounts shall, in the absence of manifest error, be conclusive and binding on
the Borrowers. In determining such amount, such Secured Party may use any method
of averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
SECTION 4.6. TAXES. Each of Holdings and each Borrower covenants and agrees
as follows with respect to Taxes.
(a) Any and all payments by Holdings and such Borrower under each Loan
Document shall be made without setoff, counterclaim or other defense, and
(subject to CLAUSE (f) below and SECTION 11.11) free and clear of, and
without deduction or withholding for or on account of, any Taxes. In the
event that any Taxes are required by law to be deducted or withheld from
any payment required to be made by Holdings or such Borrower, as the case
may be, to or on behalf of any Secured Party under any Loan Document, then:
(i) subject to CLAUSE (f) below and SECTION 11.11, if such Taxes
are NonExcluded Taxes, the amount of such payment shall be increased
as may be necessary such that such payment is made, after withholding
or deduction for or on account of such Taxes, in an amount that is not
less than the amount provided for in such Loan Document; and
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(ii) Holdings or such Borrower, as the case may be, shall
withhold the full amount of such Taxes from such payment (as increased
pursuant to CLAUSE (a) (i)) and shall pay such amount to the
Governmental Authority imposing such Taxes in accordance with
applicable law.
(b) In addition, Holdings shall, and the Borrowers shall jointly and
severally, pay any and all Other Taxes imposed to the relevant Governmental
Authority imposing such Other Taxes in accordance with applicable law.
(c) As promptly as practicable after the payment of any Taxes or Other
Taxes, and in any event within 45 days of any such payment being due,
Holdings or the Borrowers, as the case may be, shall furnish to the
Administrative Agent a copy of an official receipt (or a certified copy
thereof) evidencing the payment of such Taxes or Other Taxes. The
Administrative Agent shall make copies thereof available to any Lender upon
request therefor.
(d) Subject to CLAUSE (f) below and SECTION 11.11, Holdings shall, and
the Borrowers shall jointly and severally, indemnify each Secured Party for
any NonExcluded Taxes and Other Taxes levied, imposed or assessed on (and
whether or not paid directly by) such Secured Party (whether or not such
Non-Excluded Taxes or Other Taxes are correctly asserted by the relevant
Governmental Authority). Promptly upon having knowledge that any such
NonExcluded Taxes or Other Taxes have been levied, imposed or assessed, and
promptly upon notice thereof by any Secured Party, Holdings shall, and the
Borrowers shall jointly and severally, pay such NonExcluded Taxes or Other
Taxes directly to the relevant Governmental Authority (PROVIDED, HOWEVER,
that no Secured Party shall be under any obligation to provide any such
notice to Holdings or the Borrowers, as the case may be). In addition,
Holdings shall, and the Borrowers shall jointly and severally, indemnify
each Secured Party for any incremental Taxes that may become payable by
such Secured Party as a result of any failure of Holdings or the Borrowers,
as the case may be, to pay any Taxes when due to the appropriate
Governmental Authority or to deliver to the Administrative Agent, pursuant
to CLAUSE (c), documentation evidencing the payment of Taxes or Other
Taxes. With respect to indemnification for Non-Excluded Taxes and Other
Taxes actually paid by
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any Secured Party or the indemnification provided in the immediately
preceding sentence, such indemnification shall be made within 30 days after
the date such Secured Party makes written demand therefor. Holdings and
each Borrower acknowledges that any payment made to any Secured Party or to
any Governmental Authority in respect of the indemnification obligations of
Holdings or such Borrower, as the case may be, provided in this clause
shall constitute a payment in respect of which the provisions of CLAUSE (a)
and this clause shall apply.
(e) Each Non-Domestic Lender, on or prior to the date on which such
NonDomestic Lender becomes a Lender hereunder (and from time to time
thereafter upon the request of Holdings, the Borrowers or the
Administrative Agent, but only for so long as such Non-Domestic Lender is
legally entitled to do so), shall deliver to Holdings, the Borrowers and
the Administrative Agent either
(i) two duly completed copies of either (a) Internal Revenue
Service Form W-8BEN or (b) Internal Revenue Service Form W-8ECI, or in
either case an applicable successor form, certifying that such Lender
is entitled to an exemption from U.S. federal withholding tax on
payments of interest pursuant to an income tax treaty to which the
United States is a party or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States; or
(ii) in the case of a Non-Domestic Lender that is not legally
entitled to deliver either form listed in CLAUSE (e)(i) (with respect
to a complete exemption under an income tax treaty or that the income
is effectively connected with the conduct of a trade or business in
the United States), (x) a certificate of a duly authorized officer of
such Non-Domestic Lender to the effect that such Non-Domestic Lender
is not (a) a "bank" within the meaning of Section 881(c)(3)(a) of the
Code, (b) a "10 percent shareholder" of Holdings or either Borrower
within the meaning of Section 881(c)(3)(b) of the Code, or (c) a
controlled foreign corporation receiving interest from a related
person within the meaning of Section 881(c)(3)(c) of the Code (such
certificate, an
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"Exemption Certificate") and (y) two duly completed copies of Internal
Revenue Service Form W-8BEN (with respect to the portfolio interest
exemption) or applicable successor form, certifying that such Lender
is entitled to an exemption from U.S. federal withholding tax on
payments of interest.
(f) Notwithstanding any provision herein to the contrary, neither
Holdings nor either Borrower shall be obligated to gross up any payments to
any Lender pursuant to CLAUSE (a)(i), or to indemnify any Lender pursuant
to CLAUSE (d), in respect of United States federal withholding taxes to the
extent imposed as a result of (i) the failure of such Lender to deliver to
Holdings or the Borrowers, as the case may be, the form or forms and/or an
Exemption Certificate, as applicable to such Lender, pursuant to CLAUSE
(e), (ii) such form or forms and/or Exemption Certificate not establishing
a complete exemption from U.S. federal withholding tax or the information
or certifications made therein by the Lender being untrue or inaccurate on
the date delivered in any material respect, or (iii) the Lender designating
a successor lending office at which it maintains its Loans which has the
effect of causing such Lender to become obligated for tax payments in
excess of those in effect immediately prior to such designation; PROVIDED,
HOWEVER, that Holdings shall, and the Borrowers shall jointly and
severally, be obligated to gross up any payments to any such Lender
pursuant to CLAUSE (a)(i), and to indemnify any such Lender pursuant to
CLAUSE (d), in respect of United States federal withholding taxes if (i)
any such failure to deliver a form or forms or an Exemption Certificate or
the failure of such form or forms or Exemption Certificate to establish a
complete exemption from U.S. federal withholding tax or inaccuracy or
untruth contained therein resulted from a change in any applicable statute,
treaty, regulation or other applicable law or any official interpretation
of any of the foregoing occurring after the date hereof such Lender
acquired its interest in the Loan Documents, which change rendered such
Lender no longer legally entitled to deliver such form or forms or
Exemption Certificate or otherwise ineligible for a complete exemption from
U.S. federal withholding tax, or rendered the information or certifications
made in such form or forms or Exemption Certificate untrue or inaccurate in
a material respect or (ii) the obligation to gross up payments to any such
Lender pursuant to
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CLAUSE (a)(i) or to indemnify any such Lender pursuant to CLAUSE (d) is
with respect to an Assignee Lender that becomes an Assignee Lender as a
result of an assignment made at the request of the Borrowers.
(g) If Holdings or either Borrower, as the case may be, is required to
pay additional amounts to or for the account of a Lender pursuant to this
SECTION 4.6, then such Lender will agree to use reasonable efforts to
change the jurisdiction of its applicable lending office or take any other
action reasonably requested by Holdings or either Borrower, as the case may
be, so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change would not, in the sole good faith
determination of such Lender, be otherwise disadvantageous to such Lender
(taking into account any reimbursement of costs that Holdings or either
Borrower, as the case may be, may elect to offer).
(h) If a Secured Party receives a refund of any Taxes or Other Taxes
as to which it has been indemnified by Holdings and the Borrowers or with
respect to which Holdings or either Borrower, as the case may be, has paid
additional amounts pursuant to this SECTION 4.6, which refund in the good
faith judgment of such Secured Party is attributable to such payment made
by Holdings or either Borrower, as the case may be, shall reimburse
Holdings or either Borrower, as the case may be, for such amount as the
Secured Party determines to be the proportion of the refund as will leave
it, after such reimbursement, in no better or worse position than it would
have been in if the payment had not been required. A Secured Party shall
not be obliged to disclose information regarding its tax affairs or
computations to Holdings and the Borrowers in connection with this CLAUSE
(h) or any other provision of this SECTION 4.6.
SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided in a Loan Document, all payments by each Borrower pursuant to each Loan
Document shall be made by such Borrower to the Administrative Agent for the PRO
RATA account of the Secured Parties entitled to receive such payment. All
payments shall be made without setoff, deduction (except as permitted under
Section 4.6(f)) or counterclaim not later than 11:00 a.m. on the date due in
same day or immediately available funds to such account as the Administrative
Agent shall specify from time to time by notice to the Borrowers. Funds received
after that time
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shall be deemed to have been received by the Administrative Agent on the next
succeeding Business Day. The Administrative Agent shall promptly remit in same
day funds to each Secured Party its share, if any, of such payments received by
the Administrative Agent for the account of such Secured Party. All interest
(including interest on LIBO Rate Loans) and fees shall be computed on the basis
of the actual number of days (including the first day but excluding the last
day) occurring during the period for which such interest or fee is payable over
a year comprised of 360 days (or, in the case of interest on a Base Rate Loan
(calculated at other than the Federal Funds Rate), 365 days or, if appropriate,
366 days). Payments due on other than a Business Day shall (except as otherwise
required by CLAUSE (c) of the definition of the term "Interest Period") be made
on the next succeeding Business Day and such extension of time shall be included
in computing interest and fees in connection with that payment.
SECTION 4.8. SHARING OF PAYMENTS. If any Secured Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of SECTIONS 4.3, 4.4, 4.5 or 4.6)
in excess of its PRO RATA share of payments obtained by all Secured Parties,
such Secured Party shall purchase from the other Secured Parties such
participations in Credit Extensions made by them as shall be necessary to cause
such purchasing Secured Party to share the excess payment or other recovery
ratably (to the extent such other Secured Parties were entitled to receive a
portion of such payment or recovery) with each of them; PROVIDED, HOWEVER, that
if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Secured Party, the purchase shall be rescinded
and each Secured Party which has sold a participation to the purchasing Secured
Party shall repay to the purchasing Secured Party the purchase price to the
ratable extent of such recovery together with an amount equal to such selling
Secured Party's ratable share (according to the proportion of (a) the amount of
such selling Secured Party's required repayment to the purchasing Secured Party
TO (b) total amount so recovered from the purchasing Secured Party) of any
interest or other amount paid or payable by the purchasing Secured Party in
respect of the total amount so recovered. Each Borrower agrees that any Secured
Party purchasing a participation from another Secured Party pursuant to this
Section may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to SECTION 4.9) with respect to such
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participation as fully as if such Secured Party were the direct creditor of such
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law any Secured Party receives a secured
claim in lieu of a setoff to which this Section applies, such Secured Party
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Secured Parties entitled
under this Section to share in the benefits of any recovery on such secured
claim.
SECTION 4.9. SETOFF. Each Secured Party shall, upon the occurrence and
during the continuance of any Default described in CLAUSES (a) through (d) of
SECTION 8.1.9 or, with the consent of the Required Lenders, upon the occurrence
and during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the monetary Obligations owing to it
(whether or not then due), and (as security for such Obligations) each Borrower
hereby grants to each Secured Party a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of such Borrower then or
thereafter maintained with such Secured Party; PROVIDED, HOWEVER, that any such
appropriation and application shall be subject to the provisions of SECTION 4.8.
Each Secured Party agrees promptly to notify the applicable Borrower and the
Administrative Agent after any such setoff and application made by such Secured
Party; PROVIDED, HOWEVER, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of each Secured Party
under this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Secured Party may
have.
SECTION 4.10. REPLACEMENT OF LENDERS. If any Lender (an "AFFECTED LENDER")
(a) is a Defaulting Lender or (b) makes demand upon the Borrowers for (or if the
Borrowers are otherwise required to pay) amounts pursuant to SECTION 4.3, 4.5 or
4.6 and the payment of such additional amounts is, and is likely to continue to
be, more onerous in the reasonable judgment of the Borrowers than with respect
to the other Lenders, the Borrowers may, within 30 days of receipt by the
Borrowers of such demand, give notice (a "REPLACEMENT NOTICE") in writing to the
Agents and such Affected Lender of their intention to replace such Affected
Lender with a financial institution (a "REPLACEMENT LENDER") designated in such
Replacement Notice; PROVIDED, HOWEVER, that no Replacement Notice may be given
by the Borrowers if (i) such replacement conflicts with any applicable law or
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regulation, (ii) any Event of Default shall have occurred and be continuing at
the time of such replacement or (iii) prior to any such replacement, such Lender
shall have taken any necessary action under SECTION 4.5 or 4.6 (if applicable)
so as to eliminate the continued need for payment of amounts owing pursuant to
SECTION 4.5 or 4.6. If the Agents shall, in the exercise of their reasonable
discretion and within 10 days of their receipt of such Replacement Notice,
notify the Borrowers and such Affected Lender in writing that the designated
financial institution is satisfactory to the Agents (such consent not being
required where the Replacement Lender is already a Lender), then such Affected
Lender shall, subject to the payment of any amounts due pursuant to SECTION 4.4,
assign, in accordance with SECTION 11.11.1, all of its Commitments, Loans, Notes
(if any) and other rights and obligations under this Agreement and all other
Loan Documents (including Reimbursement Obligations, if applicable) to such
designated financial institution; PROVIDED, HOWEVER, that (i) such assignment
shall be without recourse, representation or warranty and shall be on terms and
conditions reasonably satisfactory to such Affected Lender and such designated
financial institution, (ii) the purchase price paid by such designated financial
institution shall be in the amount of such Affected Lender's Loans and its
Percentage of outstanding Reimbursement Obligations, together with all accrued
and unpaid interest and fees in respect thereof, plus all other amounts
(including the amounts demanded and unreimbursed under SECTIONS 4.3, 4.5 and
4.6), owing to such Affected Lender hereunder and (iii) the Borrowers shall pay
to the Affected Lender and the Agents all reasonable out-of-pocket expenses
incurred by the Affected Lender and the Agents in connection with such
assignment and assumption (including the processing fees described in SECTION
11.11.1). Upon the effective date of an assignment described above, the
Replacement Lender shall become a "Lender" for all purposes under this Agreement
and the other Loan Documents.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. INITIAL CREDIT EXTENSION. The obligations of the Lenders and,
if applicable, the Issuer to fund the initial Credit Extension shall be subject
to the prior or concurrent satisfaction of each of the conditions precedent set
forth in this SECTION 5.1.
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SECTION 5.1.1. RESOLUTIONS, ETC. The Agents shall have received from each
Obligor and the Seller, as applicable, (i) a copy of a good standing certificate
from the jurisdiction of its organization and each other jurisdiction where the
nature of its business requires such Obligor and the Seller to be qualified to
do business and in good standing as a foreign entity (except where the failure
to be so qualified or in good standing as a foreign entity could not reasonably
be expected to have a Material Adverse Effect), dated a date reasonably close to
the Closing Date, for each such Person and (ii) a certificate, dated the Closing
Date, duly executed and delivered by such Person's Secretary or Assistant
Secretary, managing member or general partner, as applicable, as to
(a) the fact that a complete and correct copy of the resolutions of
each such Person's Board of Directors (or other managing body, in the case
of other than a corporation) then in full force and effect authorizing, to
the extent relevant, all aspects of the Transaction applicable to such
Person and the execution, delivery and performance of each Loan Document to
be executed by such Person and the transactions contemplated hereby and
thereby is attached to such certificate and that those resolutions have not
been amended, modified or rescinded by subsequent action;
(b) the incumbency and signatures of those of its officers, managing
member or general partner, as applicable, authorized to act with respect to
each Loan Document to be executed by such Person; and
(c) the fact that a complete, correct and current copy of each Organic
Document of such Person is attached to such certificate;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of any such Person canceling
or amending the prior certificate of such Person.
SECTION 5.1.2. TRANSACTION CONSUMMATED. (a) The Financed Acquisition
shall have been consummated (or shall be concurrently consummated) and in
connection therewith, Holdings shall have acquired 94.9% of WRC pursuant to
the Purchase Agreement for an aggregate purchase price of $396,054,500.
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(b) In connection with the Financed Acquisition,
(i) Holdings shall acquire (either directly or indirectly) WRC,
PRI, AGS and Lifetime;
(ii) the Seller shall have retained the Rollover Equity;
(iii) Holdings shall continue to own all of the Capital
Securities of JLC; and
(iv) the Borrowers shall have consummated the Refinancing of
approximately $27,000,000 of existing Indebtedness of JLC.
(c) The Subordinated Note Issuance shall have been consummated on
terms (including documentation in respect thereof in form and substance)
satisfactory in all respects to the Syndication Agent and resulted in gross
cash proceeds of at least $149,900,000.
(d) The PIK Preferred Equity Issuance shall have been consummated on
terms (including documentation in respect thereof in form and substance)
satisfactory in all respects to the Syndication Agent, and shall have
resulted in net cash proceeds of at least $75,000,000 to Holdings and all
such cash proceeds shall have been used by Holdings to purchase the WRC
Mirror PIK Preferred Equity from WRC.
(e) The Common Equity Issuance shall have been consummated on terms
(including documentation in respect thereof in form and substance)
satisfactory in all respects to the Syndication Agent and shall have
resulted in cash proceeds to Holdings of at least net $95,000,000.
(f) The Borrowers shall have paid estimated fees and expenses in
connection with the Transaction in an amount not exceeding $22,800,000.
SECTION 5.1.3. TRANSACTION DOCUMENTS. The Agents shall have received (with
copies for each Lender that shall have requested in writing copies thereof)
copies of fully executed versions of the Transaction Documents, each certified
to be true and complete copies thereof by an Authorized Officer of each of
Holdings and the Borrowers. Each Transaction Document (including the Purchase
Agreement) shall be in full force and effect and shall not have been modified or
waived in any material respect, nor shall there have been any forbearance to
exercise any rights with respect to any of the material terms or provisions
relating
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to the conditions to the consummation of the Financed Acquisition set forth in
the Purchase Agreement unless otherwise agreed to by the Required Lenders.
SECTION 5.1.4. CLOSING DATE CERTIFICATE. The Agents shall have received,
with counterparts for each Lender, the Closing Date Certificate, dated the
Closing Date and duly executed and delivered by an Authorized Officer of each of
Holdings and each of the Borrowers, in which certificate each of Holdings and
each Borrower shall agree and acknowledge that the statements made therein shall
be deemed to be true and correct representations and warranties of Holdings and
each such Borrower as of such date, and, at the time each such certificate is
delivered, such statements shall in fact be true and correct. All documents and
agreements required to be appended to the Closing Date Certificate shall be in
form and substance satisfactory to the Syndication Agent.
SECTION 5.1.5. DELIVERY OF NOTES. The Agents shall have received, for the
account of each Lender that has requested a Note in writing two Business Days
prior to the Closing Date, such Lender's Notes duly executed and delivered by an
Authorized Officer of each of the Borrowers.
SECTION 5.1.6. PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness
identified in ITEM 7.2.2(b) of the Disclosure Schedule, together with all
interest, all prepayment premiums and other amounts due and payable with respect
thereto, shall have been paid in full from the proceeds of the initial Credit
Extension and the commitments in respect of such Indebtedness shall have been
terminated, and all Liens securing payment of any such Indebtedness have been
released and the Administrative Agent shall have received all Uniform Commercial
Code Form UCC-3 termination statements or other instruments as may be suitable
or appropriate in connection therewith.
SECTION 5.1.7. CLOSING FEES, EXPENSES, ETC. The Agents shall have received
for their respective accounts, or for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to SECTIONS 3.3
and 11.3, to the extent then invoiced.
SECTION 5.1.8. FINANCIAL INFORMATION, MATERIAL ADVERSE CHANGE. (a) The
Agents shall have received
(i)(A) consolidated financial statements of each Borrower and AGS
including balance sheets as of the end of each of the two Fiscal Years
ended December 31, 1998
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and December 31, 1997, and income and cash flow statements for each of the
three Fiscal Years ended December 31, 1998, December 31, 1997 and December
31, 1996, prepared in conformity with GAAP and together with reports
thereon (1) in the case of JLC, audited by PricewaterhouseCoopers LLP, and
(2) in the case of WRC and AGS, audited by Deloitte & Touche LLP, and (B)
selected financial information of each Borrower and AGS for the periods and
as of the dates set forth under the captions "Selected Historical
Consolidated Financial Information -Weekly Reader Corporation", "Selected
Historical Consolidated Financial Information -- American Guidance Service,
Inc.", and "Selected Historical Consolidated Financial Information -- JLC
Learning Corporation" in the Offering Memorandum;
(ii) (A) unaudited pro forma consolidated statements of operations of
Holdings for the year ended December 31, 1998, for the six months ended
June 30, 1998, for the six months ended June 30, 1999, and for the twelve
months ended June 30, 1999, in each case giving effect to the Transactions
as if they had occurred on January 1, 1998, and (B) the unaudited pro forma
consolidated balance sheet of Holdings as of June 30, 1999, giving effect
to the Transactions as if they had occurred on June 30, 1999 (in each case
in the form in which they are included in the Offering Memorandum, subject
to the statements under the captions "Unaudited Pro Forma Consolidated
Financial Information", "Notes to Unaudited Pro Forma Consolidated
Statements of Operations", and "Notes to Unaudited Pro Forma Consolidated
Balance Sheet Data" in the Offering Memorandum), prepared in each case in
accordance with Regulation S-X; and
(iii) projected consolidated financial statements (including balance
sheets and statements of operations, stockholders' equity and cash flows)
of each of Holdings and each Borrower for the four-year period following
the Closing Date (the "PROJECTIONS").
(b) Since December 31, 1998, there has not been any material adverse change
in the business, assets, condition (financial or otherwise), operations,
performance, properties, or Projections of Holdings, the Borrowers and their
respective Subsidiaries, taken as a whole, or WRC, JRC and their respective
Subsidiaries, taken as a whole.
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SECTION 5.1.9. OPINIONS OF COUNSEL; RELIANCE LETTERS. The Agents shall have
received
(a) opinions, dated the Closing Date and addressed to the Agents and
all of the Lenders, from
(i) Cravath, Swaine & Xxxxx, New York counsel to the Obligors, in
form and substance satisfactory to the Agents; and
(ii) local counsel to the Obligors in the following
jurisdictions, in form and substance, and from counsel, satisfactory
to the Agents:
(A) Xxxxxx & Xxxxxxx, California counsel to the Obligors;
and
(B) Xxxxxx and Xxxxxx, Minnesota counsel to the Obligors.
(b)such reliance letters as the Agents may reasonably request, which
reliance letters shall be dated the Closing Date, addressed to the Agents
and all of the Lenders and relate to each of the legal opinions (other than
"disclosure" and other similar opinions) delivered in connection with the
Transaction.
SECTION 5.1.10. FILING AGENT, ETC. All Uniform Commercial Code financing
statements or other similar financing statements and Uniform Commercial Code
(Form UCC-3) termination statements required pursuant to the Loan Documents
(collectively, the "FILING STATEMENTS") shall have been delivered to CT
Corporation System or another similar filing service company acceptable to the
Agents (the "FILING AGENT"). The Filing Agent shall have acknowledged in a
writing satisfactory to the Agents and their counsel (i) the Filing Agent's
receipt of all Filing Statements, (ii) that the Filing Statements have either
been submitted for filing in the appropriate filing offices or will be submitted
for filing in the appropriate offices within ten days following the Closing Date
and (iii) that the Filing Agent will notify the Agents and their counsel of the
results of such submissions within 30 days following the Closing Date.
SECTION 5.1.11. SUBSIDIARY GUARANTY. The Agents shall have received the
Subsidiary Guaranty, dated as of the date hereof, duly executed and delivered by
each Subsidiary Guarantor.
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SECTION 5.1.12. SOLVENCY, ETC. The Agents shall have received,
(a) a written solvency opinion of Valuation Research Corporation
addressed to the Agents and the Lenders, and their respective successors
and assigns, which opinion shall be in form and substance satisfactory to
the Agents; and
(b) a certificate duly executed and delivered by the chief financial
or accounting Authorized Officer of each of Holdings and each of the
Borrowers, dated the date of the Closing Date, in the form of EXHIBIT F
attached hereto.
SECTION 5.1.13. SECURITY AND PLEDGE AGREEMENT; SELLER PLEDGE AGREEMENT. The
Agents shall have received the Security and Pledge Agreement, dated as of the
Closing Date and duly executed and delivered by an Authorized Officer of each of
Holdings, each Borrower and each Subsidiary Guarantor and the Seller Pledge
Agreement, dated as of the Closing Date and duly executed and delivered by an
Authorized Officer of Seller, together with
(a) certificates evidencing all of the issued and outstanding Capital
Securities pledged pursuant to both the Security and Pledge Agreement and
the Seller Pledge Agreement, which certificates in each case shall be
accompanied by undated instruments of transfer executed in blank by
effective endorsement, or, if any such shares of Capital Stock pledged
pursuant to either the Security and Pledge Agreement or the Seller Pledge
Agreement are uncertificated securities, the Administrative Agent shall
have obtained "control" (as defined in the U.C.C.) over such shares of
Capital Stock) and such other instruments and documents as the
Administrative Agent shall deem necessary or in the reasonable opinion of
applicable law to perfect the security interest of the Administrative Agent
in such shares of Capital Stock so that the Administrative Agent will be a
"protected purchaser" (as defined in Section 8-303(a) of the U.C.C.).
(b) all Intercompany Notes, if any, pledged pursuant to the Security
and Pledge Agreement;
(c) executed copies of Filing Statements naming each such Obligor as a
debtor and the Administrative Agent as the secured party, or other similar
instruments or documents to be filed under the Uniform
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Commercial Code of all jurisdictions as may be necessary or, in the opinion
of the Administrative Agent, desirable to perfect the security interests of
the Administrative Agent pursuant to both the Security and Pledge Agreement
and the Seller Pledge Agreement;
(d) executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens and other
rights of any Person (other than any Liens permitted under SECTION 7.2.3)
(i) in any collateral described in either the Security and Pledge Agreement
or the Seller Pledge Agreement previously granted by any Person, and (ii)
securing any of the Indebtedness identified in ITEM 7.2.2(b) of the
Disclosure Schedule, together with such other Uniform Commercial Code Form
UCC-3 termination statements as the Administrative Agent may reasonably
request from such Obligor; and
(e) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report certified
by a party acceptable to the Administrative Agent, dated a date reasonably
near to the Closing Date, listing all effective financing statements which
name such Obligor (under its present name and any previous names of such
Obligor within the four month period preceding the date hereof) as the
debtor and which are filed in the jurisdictions in which filings are to be
made pursuant to CLAUSE (c) above, together with copies of such financing
statements.
The Agents and their counsel shall be satisfied that (i) the Lien granted to the
Administrative Agent, for the benefit of the Secured Parties in the collateral
described above is a first priority (or local equivalent thereof) security
interest subject to the Liens permitted under SECTION 7.2.3; and (ii) no Lien
exists on any of the Collateral (as defined in the Security and Pledge Agreement
and the Seller Pledge Agreement) other than the Lien created in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant to a Loan
Document and Liens permitted by SECTION 7.2.3.
SECTION 5.1.14. PATENT SECURITY AGREEMENT, TRADEMARK SECURITY AGREEMENT,
AND COPYRIGHT SECURITY AGREEMENT. The Agents shall have received the Patent
Security Agreement, the Trademark Security Agreement, and the Copyright Security
Agreement (other than the instruments or documents to be delivered pursuant to
SECTION 7.1.10) as applicable, each
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dated as of the Closing Date, duly executed and delivered by an Authorized
Officer of each Obligor that has delivered the Security and Pledge Agreement.
SECTION 5.1.15. PERFECTION CERTIFICATE. The Agents shall have received
Perfection Certificates, dated as of the Closing Date, duly executed and
delivered by an Authorized Officer of each of Holdings, each Borrower and each
other Obligor that is a party to the Security and Pledge Agreement.
SECTION 5.1.16. MORTGAGE. The Agents shall have received counterparts of
each Mortgage, dated as of the Closing Date, duly executed by an Authorized
Officer of each applicable Borrower, together with
(a) mortgagee's title insurance policies in favor of the
Administrative Agent for the benefit of the Secured Parties in amounts and
in form and substance and issued by insurers, reasonably satisfactory to
the Administrative Agent, with respect to the property purported to be
covered by each Mortgage, insuring that title to such property is
marketable and that the interests created by each Mortgage constitute valid
first Liens thereon free and clear of all defects and encumbrances other
than as approved by the Administrative Agent, and such policies shall also
include a survey reading, and, if required by the Administrative Agent and
if available, revolving credit endorsement, comprehensive endorsement,
variable rate endorsement, access and utilities endorsements, mechanic's
lien endorsement and such other endorsements as the Administrative Agent
shall reasonably request and shall be accompanied by evidence of the
payment in full of all premiums thereon; and
(b) such other approvals, opinions, or documents as the Administrative
Agent may request including consents and estoppel agreements from
landlords, a current survey of each property purported to be covered by a
Mortgage in form and substance satisfactory to the Administrative Agent and
the title insurer, and a real estate appraisal for each such property
prepared in accordance with the requirements of the Financial Institutions
Reform Recovery and Enforcement Act of 1989 and the regulations promulgated
thereunder, and otherwise in form and substance satisfactory to the
Administrative Agent.
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SECTION 5.1.17. INSURANCE. The Agents shall have received certified copies
of the insurance policies (or binders in respect thereof), from one or more
insurance companies satisfactory to the Agents, evidencing coverage required to
be maintained pursuant to each Loan Document.
SECTION 5.1.18. LITIGATION. There shall exist no pending or threatened
action, suit, investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental instrumentality which (x)
contests the consummation of the Transaction or the legality or validity of the
Credit Agreement, any other Loan Document or any Transaction Document or (y)
could reasonably be expected to have a Material Adverse Effect.
SECTION 5.1.19. MINIMUM EBITDA. Holdings' PRO FORMA EBITDA for the
consecutive twelve month period ended June 30, 1999 (including estimated
transaction related accounting adjustments, prepared and reviewed by Xxxxxx
Xxxxxxxx & Co. in accordance with Regulation S-X for Form S-1 Registration
Statements and satisfactory in form and substance to DLJ) shall have been at
least $47,300,000.
SECTION 5.1.20. CORPORATE, TAX AND CAPITAL STRUCTURE. The corporate,
capital and tax structure (including Organic Documents), the shareholders
agreements and the management of Holdings and each Borrower both immediately
before and after the Transaction shall be reasonably satisfactory to the
Syndication Agent in all respects. The corporate and capital structure of
Holdings and its Subsidiaries on the Closing Date shall be as set forth in ANNEX
I hereto.
SECTION 5.1.21. APPROVALS. All governmental, shareholder and third party
consents (including Xxxx-Xxxxx-Xxxxxx clearance) and approvals necessary or
desirable in connection with the consummation of the Transaction, and the
related financings and other transactions contemplated hereby shall have been
duly obtained (except for any such consents and approvals the failure of which
to obtain could not reasonably be expected to have a Material Adverse Effect)
and all applicable waiting periods shall have expired without any action being
taken by any competent authority that could restrain, prevent or impose any
materially adverse conditions on the Transaction, and no such law or regulation
shall be applicable which in the judgment of the Syndication Agent could have
any such effect.
SECTION 5.1.22. SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on
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behalf of either Borrower or any of its Subsidiaries or any other Obligors shall
be reasonably satisfactory in form and substance to the Agents and their
counsel; the Agents and their counsel shall have received all information,
approvals, documents or instruments as the Agents or their counsel may
reasonably request.
SECTION 5.2. ALL CREDIT EXTENSIONS. The obligation of each Lender and each
Issuer to make any Credit Extension (including the initial Credit Extension)
shall be subject to and the satisfaction of each of the conditions precedent set
forth below.
SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Concurrently
with and immediately after giving effect to any Credit Extension, the following
statements shall be true and correct:
(a) the representations and warranties set forth in each Loan Document
shall, in each case, be true and correct with the same effect as if then
made (unless stated to relate solely to an earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 5.2.2. CREDIT EXTENSION REQUEST, ETC. Subject to SECTION 2.3.2, the
Administrative Agent shall have received a Borrowing Request if Loans are being
requested, or an Issuance Request if a Letter of Credit is being requested or
extended. Each of the delivery of a Borrowing Request or Issuance Request and
the acceptance by the applicable Borrower of the proceeds of such Credit
Extension shall constitute a representation and warranty by such Borrower that
on the date of such Credit Extension (concurrently with and immediately after
giving effect to such Credit Extension and the application of the proceeds
thereof) the statements made in SECTION 5.2.1 are true and correct in all
material respects.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and to
make Credit Extensions hereunder,
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Holdings and each Borrower represents and warrants to each Secured Party as set
forth in this Article.
SECTION 6.1. ORGANIZATION, ETC. Holdings, each Borrower and each of their
respective Subsidiaries is validly organized and existing and in good standing
under the laws of the state or jurisdiction of its incorporation or
organization, is duly qualified to do business and is in good standing as a
foreign entity in each jurisdiction where the nature of its business requires
such qualification (except where the failure to be so qualified or in good
standing as a foreign entity could not reasonably be expected to have a Material
Adverse Effect), and has full power and authority and holds all requisite
governmental licenses, permits and other approvals to enter into and perform its
Obligations under each Loan Document to which it is a party and to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it (except where the failure to hold any such license, permit or
other approval could not reasonably be expected to have a Material Adverse
Effect).
SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by each Borrower of each Loan Document executed or to
be executed by it, the execution, delivery and performance by each other Obligor
of each Loan Document executed or to be executed by it, such Borrower's and each
such other Obligor's participation in the consummation of all aspects of the
Transaction, and the execution, delivery and performance by such Borrower or (if
applicable) any Obligor of the agreements executed and delivered in connection
with the Transaction are in each case within each such Person's powers, have
been duly authorized by all necessary action, and do not
(a) contravene any (i) Obligor's Organic Documents, (ii) material
contractual restriction binding on any Obligor, (iii) court decree or order
binding on any Obligor or (iv) law or governmental regulation applicable to
any Obligor; or
(b) result in, or require the creation or imposition of, any Lien on
any Obligor's properties (except as permitted by this Agreement).
SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person (other than those that have been,
or on
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the Closing Date will be, duly obtained or made and which are, or on the Closing
Date will be, in full force and effect) is required for the consummation of the
Transaction or the due execution, delivery or performance by Holdings, either
Borrower or any other Obligor of any Loan Document to which it is a party, or
for the due execution, delivery and/or performance of Transaction Documents, in
each case by the parties thereto or the consummation of the Transaction (except
where the failure to obtain or make any such authorization, approval, action,
notice or filing could not reasonably be expected to have a Material Adverse
Effect). None of Holdings, either Borrower or any of their respective
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 6.4. VALIDITY, ETC. (a) This Agreement and the Transaction
Documents to which it is a party constitute, and each other Loan Document
executed by each of Holdings and each Borrower will, on the due execution and
delivery thereof, constitute, the legal, valid and binding obligations of
Holdings and such Borrower, enforceable against Holdings and such Borrower in
accordance with their respective terms and (b) each Loan Document executed by
each other Obligor will, on the due execution and delivery thereof by such
Obligor, constitute the legal, valid and binding obligation of such Obligor
enforceable against such Obligor in accordance with its terms (except, in any
case under CLAUSE (a) or (b) above, as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally and by principles of equity).
SECTION 6.5. FINANCIAL INFORMATION.
(a) The consolidated financial statements of Holdings and each
Borrower furnished to the Agents and each Lender pursuant to SECTION
5.1.8(a)(i) have been prepared in accordance with GAAP consistently
applied, and present fairly the consolidated financial condition of the
Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended.
(b) The consolidated pro forma balance sheets furnished to the Agents
and each Lender pursuant to
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SECTION 5.1.8(a)(ii) fairly present in all material respects the pro forma
estimated financial condition of each of Holdings and each Borrower as of
such date.
(c) The Projections were prepared by Holdings in good faith on the
basis of information and assumptions that Holdings and its senior
management believed to be reasonable as of the date of the Projections and
such assumptions are reasonable as of the Closing Date.
(d) All balance sheets, all statements of operations, shareholders'
equity and cash flow and all other financial information of each of
Holdings and each Borrower and their respective Subsidiaries furnished
pursuant to SECTION 7.1.1 have been and will for periods following the
Effective Date be prepared in accordance with GAAP consistently applied,
and do or will present fairly the consolidated financial condition of the
Persons covered thereby as at the dates thereof and the results of their
operations for the periods then ended.
SECTION 6.6. NO MATERIAL ADVERSE CHANGE. There has been no material adverse
change in the business, assets, condition (financial or otherwise), operations,
performance, properties, or Projections of Holdings, the Borrowers and their
respective Subsidiaries, taken as a whole, since December 31, 1998.
SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending or,
to the knowledge of any Responsible Officer of Holdings, either Borrower or any
of their respective Subsidiaries, threatened litigation, action, proceeding or
labor controversy
(a) except as disclosed in ITEM 6.7 of the Disclosure Schedule,
affecting Holdings, such Borrower, any such Subsidiaries or any other
Obligor, or any of their respective properties, businesses, assets or
revenues, which could reasonably be expected to have a Material Adverse
Effect, and no adverse development has occurred in any labor controversy,
litigation, arbitration or governmental investigation or proceeding
disclosed in ITEM 6.7 which could reasonably be expected to have a Material
Adverse Effect; or
(b) which purports to affect the legality, validity or enforceability
of any Loan Document, the Transaction Documents or the Transaction.
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SECTION 6.8. SUBSIDIARIES. Holdings has no direct Subsidiaries other than
the Borrowers. Each Borrower has no Subsidiaries, except those Subsidiaries
(a) which are identified in ITEM 6.8 of the Disclosure Schedule; or
(b) which are permitted to have been organized or acquired in
accordance with SECTION 7.2.5 or 7.2.10.
SECTION 6.9. OWNERSHIP OF PROPERTIES. Each Borrower and each of its
Subsidiaries owns (i) in the case of owned real property, good and marketable
fee title to, and (ii) in the case of owned personal property, good and valid
title to, or, in the case of leased real or personal property, valid and
enforceable leasehold interests (as the case may be) in, all of its properties
and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for Liens
permitted pursuant to SECTION 7.2.3.
SECTION 6.10. TAXES. Holdings, each Borrower and each of their respective
Subsidiaries has filed all material tax returns and reports required by law to
have been filed by it and has paid or caused to be paid all taxes and
governmental charges thereby shown to be due and owing, except (i) any such
taxes or charges which are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books or (ii) to the extent that a failure to do so could
not reasonably be expected to have a Material Adverse Effect.
SECTION 6.11. PENSION AND WELFARE PLANS. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan, and no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by Holdings, either Borrower or any member of the Controlled Group of any
material liability, fine or penalty. Except as disclosed in ITEM 6.11 of the
Disclosure Schedule, none of Holdings, either Borrower or any member of the
Controlled Group has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA.
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SECTION 6.12. ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM 6.12 of
the Disclosure Schedule, and except as could not be reasonably expected to have
a Material Adverse Effect:
(a) the operations of Holdings, the Borrowers and their respective
Subsidiaries are in material compliance with all Environmental Laws;
(b) there is no pending or threatened litigation, action or proceeding
against Holdings, either Borrower or any of their respective Subsidiaries
arising out of an alleged violation of any Environmental Law;
(c) there have been no Releases of Hazardous Materials at, on or under
any property now owned or leased by Holdings, either Borrower or any of
their respective Subsidiaries;
(d) Holdings, each Borrower and each of their respective Subsidiaries
have been issued and are in material compliance with all permits,
certificates, approvals, licenses and other authorizations required under
Environmental Laws for the conduct of their operations;
(e) no property now owned or leased by Holdings, either Borrower or
any of their respective Subsidiaries is listed or, to the knowledge of any
Responsible Officer of Holdings or either Borrower, proposed for listing
(with respect to owned property only), on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of sites,
requiring investigation or clean-up;
(f) to the knowledge of any Responsible Officer of Holdings or either
Borrower, there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now owned or
leased by Holdings, either Borrower or any of their respective Subsidiaries
that, singly or in the aggregate, have, or could reasonably be expected to
have, a Material Adverse Effect;
(g) none of Holdings, either Borrower nor any of their respective
Subsidiaries has directly transported or directly arranged for the
transportation of any Hazardous Material to any location which is listed or
proposed for listing on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar
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state list or which is the subject of federal, state or local enforcement
actions or other investigations which may lead to material claims against
Holdings, either Borrower or any of their respective Subsidiaries for any
remedial work, damage to natural resources or personal injury, including
claims under CERCLA; and
(h) there are no polychlorinated biphenyls, and there is no friable
asbestos present at any property now or previously owned or leased by
Holdings, either Borrower or any of their respective Subsidiaries that,
singly or in the aggregate, have, or could reasonably be expected to have,
a Material Adverse Effect.
SECTION 6.13. ACCURACY OF INFORMATION. None of the factual information
heretofore or contemporaneously furnished in writing to any Secured Party by or
on behalf of any Obligor in connection with any Loan Document or any transaction
contemplated hereby (including the Transaction) contains any untrue statement of
a material fact, or omits to state any material fact necessary to make any
information not misleading, and no other factual information hereafter furnished
in connection with any Loan Document by or on behalf of any Obligor to any
Secured Party will contain any untrue statement of a material fact or will omit
to state any material fact necessary to make any information not misleading on
the date as of which such information is dated or certified.
SECTION 6.14. REGULATIONS U AND X. No Obligor is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any Credit Extensions will be used to purchase or carry margin stock
or otherwise for a purpose which violates, or would be inconsistent with, F.R.S.
Board Regulation U or Regulation X. Terms for which meanings are provided in
F.R.S. Board Regulation U or Regulation X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
SECTION 6.15. YEAR 2000. Each Obligor has reviewed the areas within its
business and operations which could be adversely affected by, and has developed
or is developing a program to address on a timely basis, the "Year 2000 Problem"
(that is, the risk that computer applications used by such Obligor may be unable
to recognize and properly perform date-sensitive functions involving certain
dates prior to and any date after December 31, 1999). Based on such review and
program, the Year 2000 Problem could not reasonably be expected to have a
Material Adverse Effect.
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SECTION 6.16. ISSUANCE OF SUBORDINATED DEBT; STATUS OF OBLIGATIONS AS
SENIOR DEBT, ETC. Each of the Borrowers and Holdings has the power and authority
to incur the Subordinated Debt evidenced by the Subordinated Notes as provided
for under the Sub Debt Documents applicable thereto and has duly authorized,
executed and delivered the Sub Debt Documents applicable to such Subordinated
Debt. Each of the Borrowers and Holdings has issued, pursuant to due
authorization, the Subordinated Debt evidenced by the Subordinated Notes under
the applicable Sub Debt Documents, and such Sub Debt Documents constitute the
legal, valid and binding obligations of each of the Borrowers and Holdings
enforceable against it in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally and by
principles of equity). The subordination provisions of the Subordinated Debt
contained in the Sub Debt Documents are enforceable against the holders of the
Subordinated Debt by the holder of any "Senior Debt" or similar term referring
to the Obligations (as defined in the Sub Debt Documents). All monetary
Obligations, including those to pay principal of and interest (including
post-petition interest, whether or not allowed as a claim under bankruptcy or
similar laws) on the Loans and Reimbursement Obligations, and fees and expenses
in connection therewith, constitute "Senior Debt" or similar term relating to
the monetary Obligations (as defined in the Sub Debt Documents) and all such
monetary Obligations are entitled to the benefits of the subordination created
by the Sub Debt Documents. Each of the Borrowers and Holdings acknowledges that
each Agent, each Lender and each Issuer is entering into this Agreement and is
extending its Commitments in reliance upon the subordination provisions of the
Sub Debt Documents.
SECTION 6.17. SOLVENCY. The Transaction (including, among other things,
the incurrence of the initial Credit Extension hereunder, the undertaking by
Holdings of its Obligations under ARTICLE X and the execution and delivery by
the Subsidiary Guarantors of the Subsidiary Guaranty) will not involve or
result in any fraudulent transfer or fraudulent conveyance under the
provisions of Section 548 of the Bankruptcy Code (11 U.S.C. Section 101 ET
SEQ.) or any applicable state law respecting fraudulent transfers or
fraudulent conveyances. On the Closing Date, after giving effect to the
Transaction (including, among other things, the incurrence of the initial
Credit Extension hereunder, the undertaking by Holdings of its Obligations
under ARTICLE X and the execution and delivery by the Subsidiary Guarantors
of the Subsidiary Guaranty), Holdings, each
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Borrower and each Subsidiary Guarantor is Solvent (taking into account rights of
indemnity, subrogation and contribution).
SECTION 6.18. CAPITALIZATION. On the Closing Date, after giving effect to
the Transaction,
(a) the authorized Capital Securities of Holdings consists of (i)
20,000,000 shares of common stock, $0.01 par value per share, of which
6,855,853 shares are issued outstanding, and (ii) 20,000,000 shares of
preferred stock, $0.01 par value per share, of which 3,000,000 shares
consist of Holdings Exchangeable Preferred Stock of which 3,000,000 shares
are issued and outstanding;
(b) the authorized Capital Securities of WRC consist of (i) 22,000,000
shares of common stock, $0.01 par value per share, of which 20,000,000
shares are classified as WRC Voting Common Stock of which 2,830,000 shares
are issued outstanding, and of which 1,000,000 shares are classified as WRC
Non-Voting Class A Common Stock and of which 1,000,000 shares are
classified as WRC Non-Voting Class B Common Stock, none of which are issued
and outstanding, (ii) 422,874 warrants to purchase shares of such WRC
Common Stock, and (iii) 20,000,000 shares of preferred stock, $0.01 par
value per share, of which no such shares are issued and outstanding.
(c) the authorized Capital Securities of JLC consist of (i) 20,000
shares of common stock, $0.01 par value per share, of which 10,000 shares
are issued outstanding, (ii) 1,495 warrants to purchase shares of such JLC
Common Stock and (iii) 10,000,000 shares of preferred stock, $0.01 par
value per share, of which no such shares are issued and outstanding.
(d) All outstanding shares of Capital Securities of Holdings, WRC and
JLC are owned by the persons and in the amounts set forth on ITEMS 6.18(a),
6.18(b) and 6.18(c) of the Disclosure Schedule, respectively.
(e) All of such outstanding Capital Securities of Holdings, WRC and
JLC have been duly and validly issued, are fully paid and nonassessable and
are free of preemptive rights, and all of the Capital Securities of WRC and
JLC (other than the WRC PIK Preferred Equity and the JLC PIK Preferred
Equity, if any) are and will be subject to drag-along rights available to
certain
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other holders of the common stock of WRC or JLC, as the case may be.
ARTICLE VII
COVENANTS
SECTION 7.1. AFFIRMATIVE COVENANTS. Holdings and each Borrower agrees with
each Lender, each Issuer and each Agent that until the Termination Date has
occurred, Holdings and such Borrower will, and will cause their respective
Subsidiaries to, perform or cause to be performed the obligations set forth in
this SECTION 7.1.
SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. Holdings and
each Borrower will furnish or cause to be furnished to the Agents (with
sufficient copies for each Lender) copies of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 50 days after the end
of each of the first three Fiscal Quarters of each Fiscal Year, unaudited
consolidated balance sheets of each of Holdings and each Borrower as of the
end of such Fiscal Quarter and consolidated statements of income and cash
flow of each of Holdings and each Borrower for such Fiscal Quarter and for
the period commencing at the end of the previous Fiscal Year and ending
with the end of such Fiscal Quarter, and including (in each case), in
comparative form the figures for the corresponding Fiscal Quarter in, and
year to date portion of, the immediately preceding Fiscal Year and as
compared to the budget for the current Fiscal Year, certified by the chief
financial or accounting Authorized Officer of Holdings as fairly presenting
the consolidated financial condition of each of Holdings and each Borrower
and as having been prepared in accordance with GAAP consistently applied;
(b) as soon as available and in any event within 95 days after the end
of each Fiscal Year, a copy of the audited consolidated balance sheets of
Holdings and the unaudited consolidated balance sheets of each Borrower,
and the related audited consolidated statements of income and cash flow of
Holdings and the related unaudited statements of income and cash flow of
each Borrower for such Fiscal Year, setting forth, in each case, in
comparative form the figures for the immediately preceding Fiscal Year and,
in the case of such consolidated balance sheets and statements of
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income and cash flow of Holdings, audited (without any Impermissible
Qualification) by Deloitte & Touche LLP or such other independent public
accountants acceptable to the Agents, which shall state that, in performing
the examination necessary to deliver the audited financial statements of
Holdings, no knowledge was obtained of any Event of Default relating to
SECTION 7.2.4 and, in the case of such unaudited consolidated balance
sheets and statements of income and cash flow of each Borrower, certified
as complete and correct by the chief financial or accounting Authorized
Officer of Holdings;
(c) concurrently with the delivery of the financial information
pursuant to CLAUSES (a) and (b), a Compliance Certificate, executed by the
chief financial or accounting Authorized Officer of Holdings, showing
compliance with the financial covenants set forth in SECTION 7.2.4 and
stating that no Default has occurred and is continuing (or, if a Default
has occurred, specifying the details of such Default and the action that
Holdings, the Borrowers or an Obligor has taken or proposes to take with
respect thereto);
(d) as soon as available and in any event no later than the earlier to
occur of (i) 30 days after the approval thereof by the Board of Directors
of Holdings and (ii) 90 days after the first day of the Fiscal Year of
Holdings, an annual budget, prepared on a monthly basis for such Fiscal
Year containing consolidated projected financial statements (including
balance sheets and statements of operations, stockholders' equity and cash
flows) of Holdings, each of the Borrowers and their respective Subsidiaries
for such succeeding Fiscal Year and each subsequent Fiscal Year, prepared
in a manner consistent with the Projections.
(e) as soon as possible and in any event within five Business Days
after any Responsible Officer of Holdings, either Borrower or any
Subsidiary Guarantor obtains knowledge of the occurrence of a Default, a
statement of an Authorized Officer of the Borrowers setting forth details
of such Default and the action which Holdings, the Borrowers or such
Obligor has taken and proposes to take with respect thereto;
(f) as soon as possible and in any event within five Business Days
after any Responsible Officer of Holdings, either Borrower or any
Subsidiary Guarantor
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obtains knowledge of (i) the occurrence of any material adverse development
with respect to any litigation, action, proceeding or labor controversy
described in ITEM 6.7 of the Disclosure Schedule or (ii) the commencement
of any litigation, action, proceeding or labor controversy of the type and
materiality described in SECTION 6.7, notice thereof and, to the extent
either Agent reasonably requests, copies of all documentation relating
thereto;
(g) promptly after the sending or filing thereof, copies of all
reports, notices, prospectuses and registration statements which any
Obligor files with the SEC or any national securities exchange;
(h) immediately upon becoming aware of (i) the institution of any
steps by any Person to terminate any Pension Plan, (ii) the failure to make
a required contribution to any Pension Plan if such failure is sufficient
to give rise to a Lien under Section 302(f) of ERISA, (iii) the taking of
any action with respect to a Pension Plan which could result in the
requirement that any Obligor furnish a bond or other security to the PBGC
or such Pension Plan, or (iv) the occurrence of any event with respect to
any Pension Plan which could result in the incurrence by any Obligor of any
material liability, fine or penalty, notice thereof and copies of all
documentation relating thereto;
(i) promptly upon receipt thereof, copies of all "management letters"
submitted to Holdings, either Borrower or any other Obligor by the
independent public accountants referred to in CLAUSE (b) in connection with
each audit made by such accountants;
(j) promptly following the mailing or receipt of any notice or report
delivered under the terms of any Subordinated Debt, copies of such notice
or report; and
(k) such other financial and other information as any Lender or Issuer
through the Administrative Agent or either Agent may from time to time
reasonably request (including information and reports in such detail as
either Agent may request with respect to the terms of and information
provided pursuant to the Compliance Certificate).
SECTION 7.1.2. MAINTENANCE OF EXISTENCE; COMPLIANCE WITH LAWS, ETC.
Holdings and each Borrower will, and will cause each of their respective
Subsidiaries to,
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(a) except as otherwise permitted by SECTION 7.2.10, preserve and
maintain its legal existence; and
(b) comply in all material respects with all applicable laws, rules,
regulations and orders (except those the failure of which to comply with
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect), including the payment (before the same become
delinquent), of all taxes, assessments and governmental charges imposed
upon Holdings, either Borrower or any of their respective Subsidiaries or
upon their property except to the extent being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside on the books of Holdings, such
Borrower or any such Subsidiary, as applicable.
SECTION 7.1.3. MAINTENANCE OF PROPERTIES. Holdings and each Borrower will,
and will cause each of their respective Subsidiaries to, maintain, preserve,
protect and keep its and their respective properties in good repair, working
order and condition (ordinary wear and tear excepted), and make necessary
repairs, renewals and replacements so that the business carried on by each
Borrower and its Subsidiaries may be properly conducted at all times, unless
such Borrower or such Subsidiary determines in good faith that the continued
maintenance of such property is no longer economically desirable.
SECTION 7.1.4. INSURANCE. Holdings and each Borrower will, and will cause
each of their respective Subsidiaries to:
(a) maintain insurance on its property with financially sound and
reputable insurance companies against loss and damage in at least the
amounts (and with only those deductibles) customarily maintained, and
against such risks as are typically insured against in the same general
area, by Persons of comparable size engaged in the same or similar business
as the Borrowers and their Subsidiaries; and
(b) all worker's compensation, employer's liability insurance or
similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section shall name the
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Administrative Agent on behalf of Secured Parties as mortgagee (in the case of
property insurance) or additional insured (in the case of liability insurance),
as applicable, and provide that no cancellation or modification of the policies
will be made without thirty days' prior written notice to the Administrative
Agent.
SECTION 7.1.5. BOOKS AND RECORDS. Holdings and each Borrower will, and will
cause each of their respective Subsidiaries to, keep books and records in
accordance with GAAP which accurately reflect all of its business affairs and
transactions and permit each Agent (or any other Secured Party if a Specified
Default has occurred and is then continuing) or any of their respective
representatives, at reasonable times and intervals upon reasonable notice to the
Borrowers, to visit Holdings, either Borrowers or any other Obligor's offices,
to discuss Holdings', such Borrower's or such other Obligor's financial matters
with its officers and employees, and its independent public accountants (and
Holdings and the Borrowers hereby authorizes such independent public accountant
to discuss Holdings', the Borrowers' and each Obligor's financial matters with
each Secured Party or their representatives whether or not any representative of
Holdings, either Borrower or such Obligor is present so long as Holdings, such
Borrower or such Obligor has been afforded a reasonable opportunity to be
present) and to examine (and photocopy extracts from) any of its books and
records; PROVIDED that, in the case of a visit by a Secured Party (other than an
Agent), such visit shall be coordinated by the Administrative Agent). Unless a
Specified Event shall have occurred and be continuing at the time of any such
visit or discussion with such independent public accountants, (a) costs of
visits by each Secured Party (other than each Agent) shall be for the account of
such Secured Party and (b) costs associated with any such discussions with such
independent public accountants shall be for the account of the applicable Agent
or such other applicable Secured Party.
SECTION 7.1.6. ENVIRONMENTAL LAW COVENANT. Holdings and each Borrower will,
and will cause each of their respective Subsidiaries to,
(a) use and operate all of its and their facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
required by applicable Environmental Laws in effect and remain in material
compliance therewith; and
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(b) (i) notify the Agents within ten Business Days after any
Responsible Officer of such Obligor receives any material written claim,
complaint or notice relating to the condition of its facilities and
properties relating to compliance with Environmental Laws, and (ii) take
reasonable steps to resolve any material non-compliance with Environmental
Laws and keep its property free of any Lien imposed by any Environmental
Law.
SECTION 7.1.7. USE OF PROCEEDS. The Borrowers shall
(a) apply the proceeds of the Loans
(i) in the case of the Term Loans, (A) to finance the
consummation of the Transaction, and (B) to pay the transaction fees
and expenses associated with the Transaction; PROVIDED, that the
aggregate amount of such transaction fees and expenses shall not
exceed $22,000,000; and
(ii) in the case of Revolving Loans and Swing Line Loans, for
post-closing working capital and general corporate purposes of the
Borrowers and their respective Subsidiaries; and
(b) use Letters of Credit (whether standby or direct pay) only for
purposes of supporting working capital and general corporate purposes of
the Borrowers and their Subsidiary Guarantors.
SECTION 7.1.8. FUTURE SUBSIDIARY GUARANTORS, SECURITY, ETC. Holdings and
each Borrower will, and will cause each of their respective Domestic
Subsidiaries and, subject to the qualifications provided herein, Foreign
Subsidiaries to, execute any documents, Perfection Certificates, Filing
Statements, agreements and instruments, and take all further action (including
filing Mortgages not relating to leaseholds of either Borrower or any
Subsidiary) that may be required under applicable law, or that either Agent may
reasonably request, in order to effectuate the transactions contemplated by the
Loan Documents and in order to grant, preserve, protect and perfect the
perfection and priority of the security interests created or intended to be
created by the Loan Documents. Holdings and each Borrower will cause any
subsequently acquired or organized Domestic Subsidiary of such Borrower to
promptly, but in no event later than 45 days following such acquisition or
organization, execute a Subsidiary Guaranty (or a supplement thereto) and each
applicable Loan Document (including a supplement to the
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Security and Pledge Agreement) in favor of the Secured Parties. In addition,
from time to time, Holdings and each Borrower will, at its cost and expense,
promptly secure the Obligations by pledging or creating, or causing to be
pledged or created, perfected security interests with respect to such of its
assets and properties as either Agent or the Required Lenders shall designate
(it being understood that it is the intent of the parties that the Obligations
shall be secured by, among other things, substantially all the assets of
Holdings, the Borrowers and their respective Domestic Subsidiaries) (including
real and other properties acquired subsequent to the Effective Date (PROVIDED
that it is the intent of the parties that neither of the Borrowers nor any of
their Subsidiaries shall be required to deliver any leasehold mortgages);
PROVIDED, HOWEVER, that neither Borrower nor any Subsidiary shall be required to
pledge more than 65% of the total voting power of all classes of Securities of a
first tier Foreign Subsidiary or any shares of any other Foreign Subsidiary
required to be pledged hereunder. Such security interests and Liens will be
created under the Loan Documents in form and substance satisfactory to the
Agents, and Holdings and the Borrowers shall deliver or cause to be delivered to
the Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Agents shall reasonably request to
evidence compliance with this Section.
SECTION 7.1.9. RATE PROTECTION AGREEMENTS. Within 170 days following the
Closing Date, Holdings and the Borrowers will enter into interest rate swaps,
caps, collars or similar agreements in a notional amount equal to at least 50%
of the aggregate principal amount of the Term Loans and on such other terms as
the Agents, Holdings and the Borrowers shall mutually agree.
SECTION 7.1.10. UNDERTAKING. The applicable Borrowers and Domestic
Subsidiaries of such Borrowers will deliver to the Agents no later than 45 days
after the Closing Date instruments or documents, in appropriate form for filing
with the United States Copyright Office, sufficient to create and perfect a
security interest in the Copyright Collateral (as defined in the Security and
Pledge Agreement) owned as of the Closing Date by the Borrowers and their
Domestic Subsidiaries and identified in ITEM 7.1.10 ("COPYRIGHTS") of the
Disclosure Schedule.
SECTION 7.1.11. LEASED PROPERTY. (a) Each of Holdings and each Borrower
shall, and shall cause each of its Subsidiaries to, use its commercially
reasonable best
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efforts (which shall not require the payment of any fee to obtain any Landlord
Waiver) to deliver to the Administrative Agent no later than 30 days after the
Closing Date a Landlord Waiver executed by the lessor of any real property that
is currently leased by Holdings, such Borrower or any such Subsidiary for a term
ending subsequent to the first anniversary of the Closing Date in any state
which by statute grants such lessor a "landlord's" (or similar) Lien which is
superior to that of the Administrative Agent and to the extent any such Landlord
Waiver is not so executed and delivered, a written explanation of Holdings as to
why Holdings, such Borrower or such Subsidiary, as the case may be, was unable
to obtain such Landlord Waiver.
(b) Prior to entering into any new lease of real property or renewing any
existing lease of real property following the Closing Date, each of Holdings and
each Borrower shall, and shall cause each of its Subsidiaries to, use its
commercially reasonable best efforts to deliver to the Administrative Agent a
Landlord Waiver executed by the lessor of any real property that is to be leased
by Holdings, such Borrower or such Subsidiary for a term in excess of one year
in any state which by statute grants such lessor a "landlord's" (or similar)
Lien which is superior to that of the Administrative Agent and to the extent any
such Landlord Waiver is not so executed and delivered, a written explanation of
Holdings as to why Holdings, such Borrower or such Subsidiary, as the case may
be, was unable to obtain such Landlord Waiver.
SECTION 7.1.12. YEAR 2000. The Borrower shall continue actions reasonably
necessary to address on a timely basis the Year 2000 Problem as contemplated by
SECTION 6.15.
SECTION 7.1.13. ADDITIONAL OPINIONS. Within 45 days following the Closing
Date, the Borrowers shall have caused to be delivered to the Agents, in form and
substance satisfactory to the Agents, letters of opinion relating to the
protection of Collateral (as defined in the Security and Pledge Agreement)
located in the states set forth in ITEM 7.1.13 of the Disclosure Schedule from
local counsel reasonably satisfactory to the Agents.
SECTION 7.2. NEGATIVE COVENANTS. Holdings and each Borrower covenants and
agrees with each Lender, each Issuer and each Agent that until the Termination
Date has occurred, Holdings and such Borrower will, and will cause each of its
respective Subsidiaries to, perform or cause to be performed the obligations set
forth in this SECTION 7.2.
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SECTION 7.2.1. BUSINESS ACTIVITIES. Holdings and each Borrower will not,
and will not permit any of their respective Subsidiaries to, engage in any
business activity except those business activities engaged in on the date of
this Agreement and activities reasonably incidental or related thereto. Holdings
will not engage in any business activity other than (a) its direct ownership of
the Capital Securities of WRC and the Capital Securities of JLC and its indirect
ownership of the Capital Securities of each Subsidiary of each Borrower and (b)
its compliance with the obligations applicable to it under the Loan Documents
and the Transaction Documents. Without limiting the generality of the
immediately preceding sentence, Holdings will not (i) create, incur, assume or
suffer to exist any Indebtedness (other than Indebtedness under this Agreement
or any other Loan Document, Indebtedness permitted to be incurred by it pursuant
to SECTION 7.2.2(d) or any Subordinated Debt pursuant to CLAUSE (h) (or (m) (but
only to the extent that it refinances any Subordinated Debt incurred under
CLAUSE (h))) of SECTION 7.2.2), (ii) create, assume, or suffer to exist any Lien
upon, or grant any options or other rights with respect to, any of its revenues,
property or other assets, whether now owned or hereafter acquired (other than
pursuant to the Loan Documents), (other than any Liens permitted by SECTION
7.2.3) (iii) wind-up, liquidate or dissolve itself (or suffer to exist any of
the foregoing), or consolidate or amalgamate with or merge into or with any
other Person, or convey, sell, transfer, lease or otherwise dispose of all or
any part of its assets, in one transaction or a series of transactions, to any
Person or Persons, (iv) create, incur, assume or suffer to exist any Investment
in any Person or (v) permit to be taken any action that would result in a Change
in Control.
SECTION 7.2.2. INDEBTEDNESS. Holdings and each Borrower will not, and will
not permit any of their respective Subsidiaries to, create, incur, assume or
permit to exist any Indebtedness, other than:
(a) Indebtedness in respect of the monetary Obligations;
(b) until the Closing Date, Indebtedness that is to be repaid in full
as further identified in ITEM 7.2.2(b) of the Disclosure Schedule;
(c) Indebtedness existing as of the Effective Date which is identified
in ITEM 7.2.2(c) of the Disclosure Schedule;
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(d) unsecured Indebtedness of Holdings, the Borrowers and their
respective Subsidiaries (i) incurred in the ordinary course of business of
Holdings, such Borrower and its Subsidiaries (including open accounts
extended by suppliers on normal trade terms in connection with purchases of
goods and services which are not overdue for a period of more than 120 days
or, if overdue for more than 120 days, as to which a dispute exists and
adequate reserves in conformity with GAAP have been established on the
books of Holdings, such Borrower or such Subsidiary) and (ii) in respect of
performance, surety or appeal bonds provided in the ordinary course of
business, but excluding (in each case), Indebtedness incurred through the
borrowing of money or Contingent Liabilities in respect thereof (PROVIDED,
HOWEVER, that the amount of outstanding unsecured Indebtedness incurred by
Holdings under this CLAUSE (d) shall not at any time exceed $50,000);
(e) Indebtedness of the Borrowers and their respective Subsidiaries
(i) in respect of industrial revenue bonds or other similar governmental or
municipal bonds, (ii) evidencing the deferred purchase price of newly
acquired property or incurred to finance the acquisition, construction or
improvement of any fixed or capital assets of such Borrower and its
Subsidiaries (pursuant to purchase money mortgages or otherwise, whether
owed to the seller or a third party) used in the ordinary course of
business of such Borrower and its Subsidiaries (PROVIDED, that such
Indebtedness is incurred within 60 days of the acquisition or the
completion of such construction or improvement of such property) and (iii)
Capitalized Lease Liabilities; PROVIDED, that the aggregate amount of all
Indebtedness outstanding pursuant to this clause shall not at any time
exceed $2,000,000;
(f) Indebtedness of any Subsidiary owing to either Borrower or any
other Subsidiary, which Indebtedness
(i) shall, if payable to either Borrower or a Domestic
Subsidiary and evidenced by one or more Intercompany Notes, be
delivered in pledge to the Administrative Agent pursuant to the
Security and Pledge Agreement, and whether or not evidenced by a
note, shall not be forgiven or otherwise discharged for any
consideration other than payment in full or in part in cash
(PROVIDED, that
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only the amount repaid in part shall be discharged); and
(ii) if incurred by a Subsidiary owing to either Borrower or
a Subsidiary Guarantor, shall not (when aggregated with the
amount of Investments made by the Borrowers and the Subsidiary
Guarantors in Foreign Subsidiaries under CLAUSE (e)(i) of SECTION
7.2.5), exceed $1,000,000;
(g) unsecured Indebtedness (not evidenced by a note or other
instrument) of either Borrower owing to a Subsidiary that has previously
executed and delivered to the Agents the Interco Subordination Agreement
(or a supplement thereto);
(h) unsecured Subordinated Debt of Holdings and the Borrowers
evidenced by the Subordinated Notes incurred pursuant to the terms of
the Sub Debt Documents in a principal amount not to exceed $150,000,000,
and unsecured Contingent Liabilities of the Subsidiary Guarantors in
respect of such Subordinated Debt, but only if such Contingent
Liabilities are subordinated to the Obligations on substantially the
same terms as such Subordinated Debt of Holdings and the Borrowers is
subordinated to the Obligations;
(i) Indebtedness of a Person existing at the time such Person became a
Subsidiary of either Borrower in an aggregate amount of all such Persons
not to exceed $5,000,000, but only to the extent that such Indebtedness was
not created or incurred in contemplation of such Person becoming a
Subsidiary;
(j) Indebtedness under Hedging Obligations entered into in the
ordinary course of business to limit risks of currency or interest rate
fluctuations and not for speculative purposes;
(k) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(l) Indebtedness consisting of guaranties of loans made to officers,
directors or employees of Holdings or any of its Subsidiaries in an
aggregate outstanding amount, when taken together with the loans
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referred to in CLAUSE (f)(iv)(B) of SECTION 7.2.5, not to exceed
$7,500,000;
(m) Indebtedness which refinances Indebtedness permitted by CLAUSES
(c), (h) and (i) above; PROVIDED, HOWEVER, that after giving effect to such
refinancing, (i) the principal amount of outstanding Indebtedness is not
increased, (ii) neither the tenor nor the average life thereof is reduced,
(iii) the respective obligor or obligors shall be the same on the
refinancing Indebtedness as on the Indebtedness being refinanced, (iv) the
security, if any, for the refinancing Indebtedness shall be the same as
that for the Indebtedness being refinanced (except to the extent that less
security is granted to holders of refinancing Indebtedness), (v) the
holders of refinancing Indebtedness are not afforded covenants, defaults,
rights or remedies more burdensome to the obligor or obligors than those
contained in the Indebtedness being refinanced and (vi) the refinancing
Indebtedness is subordinated to the same degree, if any, as the
Indebtedness being refinanced;
(n) Contingent Liabilities of Holdings and the Borrowers in respect of
Indebtedness consisting of guaranties made by Holdings and the Borrowers in
respect of Indebtedness of the Subsidiary Guarantors of the type permitted
and described in CLAUSE (d)(i) above, in an aggregate amount not to exceed
at any time outstanding $1,500,000; and
(o) other Indebtedness of the Borrowers and their respective
Subsidiaries (other than Indebtedness of Foreign Subsidiaries owing to
either Borrower or any of its Domestic Subsidiaries) in an aggregate amount
at any time outstanding not to exceed $1,000,000.
PROVIDED, HOWEVER, that no Indebtedness otherwise permitted by CLAUSES (f)(ii),
(h), (i) or (m) shall be assumed or otherwise incurred if a Specified Default
has occurred and is then continuing or would result therefrom.
SECTION 7.2.3. LIENS. Holdings and each Borrower will not, and will not
permit any of their respective Subsidiaries to, create, incur, assume or permit
to exist any Lien upon any of its property (including Capital Securities of any
Person), revenues or assets, whether now owned or hereafter acquired, except:
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(a) Liens securing payment of the monetary Obligations;
(b) until the Closing Date, Liens securing payment of Indebtedness of
the type described in CLAUSE (b) of SECTION 7.2.2;
(c) Liens existing as of the Effective Date and disclosed in ITEM
7.2.3(c) of the Disclosure Schedule securing Indebtedness described in
CLAUSE (c) of SECTION 7.2.2, and any refinancing, refunding, renewal or
extension of such Indebtedness; PROVIDED, that no such Lien shall encumber
any additional property and the amount of Indebtedness secured by such Lien
is not increased from that existing on the Effective Date (as such
Indebtedness may have been permanently reduced subsequent to the Effective
Date);
(d) Liens securing Indebtedness of the type permitted under CLAUSE (e)
of SECTION 7.2.2; PROVIDED, that (i) such Lien is granted within 90 days
after such Indebtedness is incurred, (ii) the Indebtedness secured thereby
does not exceed 80% of the cost of the applicable property, improvements or
equipment at the time of such acquisition (or construction) and (iii) such
Lien secures only the assets that are the subject of the Indebtedness
referred to in such clause;
(e) Liens securing Indebtedness permitted by CLAUSE (i) of SECTION
7.2.2; PROVIDED, that such Liens existed prior to such Person becoming a
Subsidiary, were not created in anticipation thereof and attach only to
specific tangible assets of such Person (and not assets of such Person
generally);
(f) Liens in favor of carriers, warehousemen, mechanics, materialmen
and landlords granted in the ordinary course of business for amounts not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall
have been set aside on its books;
(g) Liens incurred or deposits made in the ordinary course of business
in connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, bids, leases or other similar obligations
(other than for borrowed money) entered into in the ordinary course of
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business or to secure obligations on surety and appeal bonds or performance
bonds;
(h) judgment Liens in existence for less than 45 days after the entry
thereof or with respect to which execution has been stayed or the payment
of which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies and which do not
otherwise result in an Event of Default under SECTION 8.1.6;
(i) easements, rights-of-way, zoning restrictions, minor defects or
irregularities in title and other similar encumbrances not interfering in
any material respect with the value or use of the property to which such
Lien is attached;
(j) Liens for taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without penalty or
being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books;
(k) Liens (including financing statements that are filed as a
precautionary measure and undertakings to file such financing statements)
provided for in equipment leases under which either Borrower or any of
their respective Subsidiaries is the lessee; provided that any such Lien in
respect of any equipment lease is limited to the equipment being leased
under such lease and the proceeds thereof;
(l) leases, subleases, licenses and sublicenses granted to third
parties in the ordinary course of business, in each case not interfering in
any respect with the operations or business of any Borrower or any of its
Subsidiaries or the Liens of the Administrative Agent or the Lenders
granted by the Loan Documents;
(m) banker's liens and rights of offset of the holders of Indebtedness
of the Borrowers or their respective Subsidiaries on monies deposited by
either Borrower or any such Subsidiary with such holders of Indebtedness in
the ordinary course of business of either Borrower or any such Subsidiary;
and
(n) other Liens that do not, individually or in the aggregate, attach
to a material portion of the
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assets of the Borrowers or any Subsidiary or the Capital Securities of
either Borrower or any of their respective Subsidiaries and do not secure
obligations in an aggregate amount in excess of $2,000,000.
SECTION 7.2.4. FINANCIAL CONDITION AND OPERATIONS. Holdings and each
Borrower will not permit to occur any of the events set forth below.
(a) Holdings and each Borrower will not permit the Leverage Ratio
as of the last day of any Fiscal Quarter occurring during any period set
forth below to be greater than the ratio set forth opposite such period:
Period Leverage Ratio
------ --------------
Effective Date to 6.35:1.0
09/30/00
10/01/00 to 09/30/01 5.85:1.0
10/01/01 to 09/30/02 5.35:1.0
10/01/02 to 09/30/03 4.75:1.0
10/01/03 and 4.00:1.0.
thereafter
(b) Holdings and each Borrower will not permit the Fixed Charge
Coverage Ratio as of the last day of any Fiscal Quarter occurring during
any period set forth below to be less than the ratio set forth opposite
such period:
Fixed Charge
Period Coverage Ratio
------ --------------
Effective Date to 1.05:1.0
06/30/01
07/01/01 to 06/30/02 1.10:1.0
07/01/02 to 12/31/03 1.25:1.0
01/01/04 and 1.50:1.0.
thereafter
SECTION 7.2.5. INVESTMENTS. Holdings and each Borrower will not, and will
not permit any of their respective Subsidiaries to, purchase, make, incur,
assume or permit to exist any Investment in any other Person, except:
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(a) Investments existing on the Effective Date and identified in ITEM
7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(d) Investments made by the Borrowers and their respective
Subsidiaries that are permitted as Capital Expenditures pursuant to SECTION
7.2.7;
(e) Investments by way of contributions to capital or purchases of
Capital Securities (i) by either Borrower in any Subsidiaries or by any
Subsidiary in other Subsidiaries; PROVIDED, that the aggregate amount of
intercompany loans made pursuant to CLAUSE (f)(ii) of SECTION 7.2.2 and
Investments under this clause made by the Borrowers and Subsidiary
Guarantors in Subsidiaries that are not Subsidiary Guarantors shall not
exceed $1,000,000 at any time, or (ii) by any Subsidiary in either
Borrower;
(f) Investments made by the Borrowers and their respective
Subsidiaries that constitute (i) accounts receivable arising, (ii) trade
debt granted, or (iii) deposits made in connection with the purchase price
of goods or services, in each case in the ordinary course of business or
(iv) loans to officers, directors or employees of Holdings or any of its
Subsidiaries (a) to finance the acquisition of Capital Securities (or
securities linked to such securities) of Holdings so long as Holdings makes
a capital contribution of such proceeds to the Borrowers, or (b) in the
ordinary course of business for items such as travel, entertainment and
relocation expenses in an aggregate outstanding principal amount, when
taken together with the amount of guaranties referred to in CLAUSE (l) of
SECTION 7.2.2, not exceeding $7,500,000;
(g) Investments made by the Borrowers and their respective
Subsidiaries constituting Permitted Acquisitions in an aggregate amount not
to exceed $5,000,000 over the term of this Agreement; PROVIDED, that (i) if
any such Investment shall result in the acquisition of a wholly owned
Subsidiary, and (ii) upon
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making such Investment, the provisions of SECTION 7.1.8 are complied with;
(h) Investments consisting of any deferred portion of the sales price
received by either Borrower or any Subsidiary in connection with any
Disposition permitted under SECTION 7.2.11; and
(i) other Investments made by the Borrowers and their respective
Subsidiaries in an amount not to exceed $1,000,000 over the term of this
Agreement;
PROVIDED, HOWEVER, that
(j) any Investment which when made complies with the requirements of
CLAUSES (a), (b) or (c) of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such Investment if
made thereafter would not comply with such requirements; and
(k) no Investment otherwise permitted by CLAUSE (g) shall be permitted
to be made if any Specified Default has occurred and is continuing or would
result therefrom.
SECTION 7.2.6. RESTRICTED PAYMENTS, ETC. Holdings and each Borrower will
not, and will not permit any of their respective Subsidiaries to, declare or
make a Restricted Payment, or make any deposit for any Restricted Payment, other
than
(a) Restricted Payments made by Subsidiaries to the Borrowers or
wholly owned Subsidiaries of either Borrower;
(b) Restricted Payments made by the Borrowers and the Subsidiaries, as
applicable, to Holdings in accordance with the Tax Sharing Agreement, but
in aggregate amounts no greater than, and limited to the amount necessary
to enable Holdings to make payments in cash in respect of the aggregate
federal income tax liability then due of the "affiliated group" (within the
meaning of Section 1504(a)(1) of the Code) of which Holdings is the common
parent corporation; PROVIDED, HOWEVER, that any payment required to be made
by any Borrower or Subsidiary to Holdings in accordance with the Tax
Sharing Agreement that otherwise would be prohibited pursuant to the
preceding limitation may be paid directly to another Borrower or
Subsidiary, as
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applicable, to the extent that Holdings would have been required to make a
payment to such other Borrower or Subsidiary in accordance with the Tax
Sharing Agreement.
(c) Restricted Payments made by the Borrowers to Holdings solely to
the extent necessary to enable Holdings to pay Management Fees in an
aggregate amount of up to $1,000,000 in any Fiscal Year thereafter;
(d) Restricted Payments made by the Borrowers to Holdings solely to
the extent necessary to enable Holdings to pay for general administrative
and operating expenses of Holdings;
(e) Restricted Payments made by the Borrowers to Holdings solely to
the extent necessary to enable Holdings to repurchase, redeem or otherwise
acquire or retire for value any Capital Securities of Holdings, or any
warrant, option or other right to acquire Capital Securities of Holdings,
held by any member of management or employee of Holdings or any of its
Subsidiaries pursuant to any management equity subscription agreement or
stock option agreement as a result of the cessation of the employment such
Person (by death, disability or otherwise) in an aggregate amount of up to
$1,000,000 in the 1999 Fiscal Year and $5,000,000 in each Fiscal Year
thereafter;
(f) (i) Restricted Payments made by the Borrowers to Holdings
(including Restricted Payments made by WRC on the WRC Mirror PIK Preferred
Equity) on or subsequent to the fifth anniversary of the Closing Date
solely to the extent necessary to enable Holdings to make scheduled
payments of dividends on the PIK Preferred Equity and Holdings does in fact
make such scheduled payments thereon and (ii) Restricted Payments made by
JLC and WRC on or subsequent to the fifth anniversary of the Closing Date
to make scheduled payments of dividends on the JLC PIK Preferred Equity and
the WRC PIK Preferred Equity (other than any such Capital Securities held
by Holdings), respectively; PROVIDED, that such Restricted Payments may
only occur so long as, in each case, the conditions set forth in the
proviso to this Section are satisfied and at the time of such payments and
after giving effect to the making of each such Restricted Payment, the
Leverage Ratio for the most recently ended Fiscal Quarter for which a
Compliance Certificate was delivered by Holdings to the Agents pursuant to
CLAUSE (c) of
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SECTION 7.1.1 as calculated on a PRO FORMA basis shall be less than
3.00:1.0; and
(g) following the making of any mandatory prepayment required under
CLAUSE (h) of SECTION 3.1.1 in respect of Net Equity Proceeds, (i)
Restricted Payments made by the Borrowers to Holdings solely to the extent
necessary to enable Holdings to redeem shares of the PIK Preferred Equity
(other than any such Capital Securities held by Holdings or WRC) or (ii)
Restricted Payments made by JLC and WRC to redeem shares of the JLC PIK
Preferred Equity and the WRC PIK Preferred Equity (other than any such
Capital Securities held by Holdings), respectively, in each case, using
such Net Equity Proceeds remaining following such mandatory prepayment in
an amount not to exceed the excess of (x) the amount of Net Equity Proceeds
remaining from such mandatory prepayment over (y) the amount of any such
Net Equity Proceeds used to redeem any Subordinated Notes pursuant to
SECTION 7.2.8; PROVIDED, that such Restricted Payments may only occur so
long as the conditions set forth in the proviso to this Section are
satisfied and at the time of such payments and after giving effect to the
making of each such Restricted Payment, the Leverage Ratio for the most
recently ended Fiscal Quarter for which a Compliance Certificate was
delivered by Holdings to the Agents pursuant to CLAUSE (c) of SECTION 7.1.1
as calculated on a PRO FORMA basis shall be less than 4.25:1.0;
PROVIDED, HOWEVER, that no Restricted Payments under CLAUSE (c), (e), (f) or (g)
may be made if (a) any Specified Default shall have occurred and be continuing
on the date such Restricted Payment is declared or made, or a Specified Default
would result from the making of any such Restricted Payment and (b) after giving
effect to the making of each such Restricted Payment, the Borrower would not be
in PRO FORMA compliance with the covenants set forth in SECTION 7.2.4 for the
most recently ended Fiscal Quarter for which a Compliance Certificate was
delivered by Holdings to the Agents pursuant to CLAUSE (c) of SECTION 7.2.2;
SECTION 7.2.7. CAPITAL EXPENDITURES, ETC. Subject (in the case of
Capitalized Lease Liabilities), to CLAUSE (e) of SECTION 7.2.2, Holdings and
each Borrower will not, and will not permit any of their respective Subsidiaries
to, make or commit to make Capital Expenditures other than Capital Expenditures
made or committed to be made by the Borrowers and their respective Subsidiaries
in any Fiscal Year (or, in
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the case of the 1999 Fiscal Year, during the period from and including the
Closing Date through the end of such Fiscal Year) which in the aggregate do not
exceed the amount set forth below opposite such Fiscal Year:
Capital
Fiscal Year Expenditure Amount
----------- ------------------
1999 $2,000,000
2000 $13,000,000
2001 $15,000,000
2002 $17,000,000
2003 $18,000,000;
2004 and each $20,000,000
Fiscal Year
thereafter
PROVIDED, HOWEVER, that (i) to the extent the amount of Capital Expenditures
permitted to be made in any Fiscal Year pursuant to this Section without giving
effect to this proviso (the "BASE AMOUNT") exceeds the aggregate amount of
Capital Expenditures actually made during such Fiscal Year, such excess amount
may be carried forward to (but only to) the next succeeding Fiscal Year (any
such amount to be certified by Holdings to the Administrative Agent in the
Compliance Certificate delivered for the last Fiscal Quarter of such Fiscal
Year, and any such amount carried forward to a succeeding Fiscal Year shall be
deemed to be used prior to Holdings and its Subsidiaries using the Base Amount
for such succeeding Fiscal Year, without giving effect to such carryforward).
SECTION 7.2.8. NO PREPAYMENT OF SUBORDINATED DEBT. Holdings and each
Borrower will not, and will not permit any of their respective Subsidiaries to,
(a)make any payment or prepayment of principal of, or premium or
interest on, any Subordinated Debt (i) other than payments of interest on
the stated, scheduled date for payment of interest set forth in the
applicable Sub Debt Documents or (ii) which would violate the terms of this
Agreement or the applicable Sub Debt Documents;
(b) redeem, retire, purchase, defease or otherwise acquire any
Subordinated Debt (including, in
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the case of each Borrower and each of their respective Subsidiaries, by way
of issuing notes evidencing Subordinated Debt in exchange for Subordinated
Notes of Holdings); PROVIDED, HOWEVER, that following the making of any
mandatory prepayment required under CLAUSE (h) of SECTION 3.1.1 in respect
of Net Equity Proceeds and so long as no Specified Default shall have
occurred and be continuing on the date such redemption, retirement,
purchase, defeasance or other acquisition is declared or made, or a
Specified Default would result from the consummation thereof, Holdings and
the Borrowers may redeem, retire, purchase, defease or otherwise acquire up
to 35% of the Subordinated Notes using such Net Equity Proceeds remaining
following such mandatory prepayment in an amount not to exceed the excess
of (x) the amount Net Equity Proceeds remaining from such mandatory
prepayment over (y) the amount of any such Net Equity Proceeds used to
redeem any PIK Preferred Equity and cancel the warrants issued in
connection therewith pursuant to CLAUSE (g) of SECTION 7.2.6; or
(c) make any deposit (including the payment of amounts into a sinking
fund or other similar fund) for any of the foregoing purposes;
SECTION 7.2.9. CAPITAL SECURITIES. Holdings will not permit either
Borrower, and each Borrower will not, and will not permit any of their
respective Subsidiaries to,
(i) issue any Capital Securities (whether for value or otherwise) to
any Person other than (in the case of Subsidiaries) either Borrower or
another wholly owned Subsidiary thereof or
(ii) become liable in respect of any obligation (contingent or
otherwise) to purchase, redeem, retire, acquire or make any other payment
in respect of any Capital Securities of Holdings, either Borrower or any
Subsidiary or any option, warrant or other right to acquire any such
Capital Securities,
in each case, other than (A) in connection with any Permitted Equity Exchange of
the types described in clauses (i), (ii), (iii), (v)(A) or (vi) of the
definition thereof (PROVIDED, HOWEVER, (1) in the case of such clauses (ii) and
(v)(A), Holdings makes capital contributions of all of the Capital Securities
received by it in connection with each such exchange to WRC and WRC
contemporaneously with the receipt thereof pledges and delivers such Capital
Securities to the Administrative Agent, together with stocks powers
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duly executed in blank, all in accordance with the terms of the Security and
Pledge Agreement and (2) in the case of such clause (vi), Holdings
contemporaneously with the receipt of Capital Securities of WRC and/or JLC in
connection with such Permitted Equity Exchange pledges and delivers such Capital
Securities to the Administrative Agent, together with stocks powers duly
executed in blank, all in accordance with the terms of the Security and Pledge
Agreement) and (B) the issuance by Holdings or WRC of common stock in connection
with a Public Offering. Notwithstanding anything to the contrary herein, the
aggregate liquidation preference of all shares of Capital Securities (excluding
any common equity and the WRC Mirror PIK Preferred but including the PIK
Preferred Equity, the WRC PIK Preferred Equity, if any, and the JLC PIK
Preferred Equity, if any) held by persons other than Holdings or any of its
Subsidiaries shall not exceed the sum of (x) $75,000,000, (y) any accrued but
unpaid dividends on the PIK Preferred Equity and (z) the aggregate liquidation
preference of additional PIK Preferred Equity issued in lieu of cash dividends
on the PIK Preferred Equity.
SECTION 7.2.10. CONSOLIDATION, MERGER, ETC. Holdings and each Borrower will
not, and will not permit any of their respective Subsidiaries to, liquidate or
dissolve, consolidate with, or merge into or with, any other Person, or purchase
or otherwise acquire all or substantially all of the assets of any Person (or
any division thereof), except
(a) any Subsidiary may liquidate or dissolve voluntarily into, and may
merge with and into, either Borrower or any other Subsidiary (PROVIDED,
HOWEVER, that a Subsidiary Guarantor may only liquidate or dissolve into,
or merge with and into, either Borrower or another Subsidiary Guarantor),
and the assets or Capital Securities of any Subsidiary may be purchased or
otherwise acquired by either Borrower or any other Subsidiary (PROVIDED,
HOWEVER, that the assets or Capital Securities of any Subsidiary Guarantor
may only be purchased or otherwise acquired by either Borrower or another
Subsidiary Guarantor); PROVIDED, FURTHER, that in no event shall any
Pledged Subsidiary consolidate with or merge with and into any Subsidiary
other than another Pledged Subsidiary unless after giving effect thereto,
the Administrative Agent shall have a perfected pledge of, and security
interest in and to, at least the same percentage of the issued and
outstanding interests of Capital Securities (on a fully diluted basis) of
the surviving Person as the Administrative Agent had immediately prior to
such merger or consolidation in form and substance
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satisfactory to the Administrative Agent and its counsel, pursuant to such
documentation and opinions as shall be necessary in the opinion of the
Administrative Agent to create, perfect or maintain the collateral position
of the Secured Parties therein;
(b) a Borrower may merge with or into the other Borrower;
(c) so long as no Specified Default has occurred and is continuing or
would occur after giving effect thereto, either Borrower or any of its
Subsidiaries may (to the extent permitted by CLAUSE (g) of SECTION 7.2.5)
purchase all or substantially all of the assets or Capital Securities of
any Person (or any division thereof), or acquire such Person by merger (it
being understood that the foregoing shall not prohibit consummation of any
transaction committed to in a definitive agreement that was entered into
prior to the occurrence of any such Specified Default); and
(d) any transaction permitted under SECTION 11.12.
SECTION 7.2.11. PERMITTED DISPOSITIONS. Holdings and each Borrower will
not, and will not permit any of their respective Subsidiaries to, Dispose of
Holdings', any of such Borrower's or such Subsidiaries' assets (including
accounts receivable and Capital Securities of Subsidiaries) to any Person in one
transaction or series of transactions unless such Disposition is a Permitted
Asset Disposition or is permitted under SECTION 11.12.
SECTION 7.2.12. MODIFICATION OF CERTAIN AGREEMENTS. Holdings and each
Borrower will not, and will not permit any of their respective Subsidiaries to,
consent to any amendment, supplement, waiver or other modification of, or enter
into any forbearance from exercising any rights with respect to the terms or
provisions contained in,
(a) the Sub Debt Documents, other than any amendment, supplement,
waiver or modification for which no (or only a nominal) fee is payable to
the holders of the Subordinated Debt and which (i) extends the date or
reduces the amount of any required repayment, prepayment or redemption of
the principal of such Subordinated Debt, (ii) reduces the rate or extends
the date for payment of the interest, premium (if any) or fees payable on
such Subordinated Debt or (iii) makes the covenants, events of default or
remedies in such Sub Debt Documents less restrictive on such Borrower; or
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(b)any of the Transaction Documents.
SECTION 7.2.13. TRANSACTIONS WITH AFFILIATES. Except (a) as permitted under
CLAUSE (d), (e) or (f)(iv) of SECTION 7.2.5, SECTION 7.2.6, or CLAUSE (a) or (b)
of SECTION 7.2.10, (b) payments made by Holdings, the Borrowers and their
respective Subsidiaries in accordance with the Tax Sharing Agreement and (c) for
Permitted Asset Dispositions of the type described in clause (g) of the
definition thereof, Holdings and each Borrower will not, and will not permit any
of their respective Subsidiaries to, enter into or cause or permit to exist any
arrangement, transaction or contract (including for the purchase, lease or
exchange of property or the rendering of services) with any of its other
Affiliates, unless such arrangement, transaction or contract (i) is on fair and
reasonable terms no less favorable to such Borrower or such Subsidiary than it
could obtain in an arm's-length transaction with a Person that is not an
Affiliate and (ii) is of the kind which would be entered into by a prudent
Person in the position of such Borrower or such Subsidiary with a Person that is
not one of its Affiliates.
SECTION 7.2.14. RESTRICTIVE AGREEMENTS, ETC. Holdings and each Borrower
will not, and will not permit any of their respective Subsidiaries to, enter
into any agreement prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired;
(b) the ability of any Obligor to amend or otherwise modify any Loan
Document; or
(c) the ability of any Subsidiary to make any payments, directly or
indirectly, to either Borrower, including by way of dividends, advances,
repayments of loans, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the case of CLAUSE (a), any agreement governing any
Indebtedness permitted by CLAUSE (e) of SECTION 7.2.2 as to the assets financed
with the proceeds of such Indebtedness, or (iii) in the case of CLAUSES (a) and
(c), any agreement of a Foreign Subsidiary governing the Indebtedness permitted
by CLAUSE (f)(ii) of SECTION 7.2.2.
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SECTION 7.2.15. SALE AND LEASEBACK. Holdings and each Borrower will not,
and will not permit any of their respective Subsidiaries to, directly or
indirectly enter into any agreement or arrangement providing for the sale or
transfer by it of any property (now owned or hereafter acquired) to a Person and
the subsequent lease or rental of such property or other similar property from
such Person.
SECTION 7.2.16. DESIGNATION OF SENIOR DEBT. None of Holdings or either
Borrower will permit any Indebtedness (other than the Indebtedness incurred
hereunder or under any other Loan Document) to constitute "Designated Senior
Debt" (or any other similar term) under the Subordinated Debt Documents, without
the consent of the Required Lenders.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the following events or
occurrences described in this Article shall constitute an "EVENT OF DEFAULT".
SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS. Either Borrower shall default in
the payment or prepayment when due of
(a) any principal of any Loan, or any Reimbursement Obligation or any
deposit of cash for collateral purposes pursuant to SECTION 2.6.4; or
(b) interest on any Loan or Reimbursement Obligation, any fee
described in ARTICLE III or any other monetary Obligation, and such default
shall continue unremedied for a period of five Business Days after such
amount was due.
SECTION 8.1.2. BREACH OF WARRANTY. Any representation or warranty of any
Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to ARTICLE V) is or shall be incorrect when made
or deemed to have been made in any material respect.
SECTION 8.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.
Holdings or either Borrower shall default in the due performance or observance
of any of its obligations under SECTION 7.1.1, 7.1.7, 7.1.10 or 7.2.
SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due
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performance and observance of any other agreement contained in any Loan Document
executed by it, and such default shall continue unremedied for a period of 30
days after notice thereof shall have been given to the Borrowers by either
Agent.
SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS. A default shall occur in the
payment of any amount when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any principal or stated amount of, or interest
or fees on, any Indebtedness (other than Indebtedness described in SECTION
8.1.1) of Holdings, either Borrower or any of their respective Subsidiaries or
any other Obligor having a principal or stated amount, individually or in the
aggregate, in excess of $5,000,000, or a default shall occur in the performance
or observance of any obligation or condition with respect to such Indebtedness
if the effect of such default is to accelerate the maturity of any such
Indebtedness or such default shall continue unremedied for any applicable period
of time sufficient to permit the holder or holders of such Indebtedness, or any
trustee or agent for such holders, to cause or declare such Indebtedness to
become due and payable or to require such Indebtedness to be prepaid, redeemed,
purchased or defeased, or require an offer to purchase or defease such
Indebtedness to be made, prior to its expressed maturity.
SECTION 8.1.6. JUDGMENTS. Any judgment or order for the payment of money
individually or in the aggregate in excess of $5,000,000 (exclusive of any
amounts fully covered by insurance (less any applicable deductible) and as to
which the insurer has acknowledged its responsibility to cover such judgment or
order) shall be rendered against Holdings, either Borrower or any of their
respective Subsidiaries or any other Obligor and such judgment shall not have
been vacated or discharged or stayed or bonded pending appeal within 30 days
after the entry thereof or enforcement proceedings shall have been commenced by
any creditor upon such judgment or order.
SECTION 8.1.7. PENSION PLANS. Any of the following events shall occur with
respect to any Pension Plan
(a) the institution of any steps by either Borrower, any member of its
Controlled Group or any other Person to terminate a Pension Plan if, as a
result of such termination, such Borrower or any such member could be
required to make a contribution to such Pension Plan, or could reasonably
expect to incur a
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liability or obligation to such Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension Plan
sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8. CHANGE IN CONTROL. Any Change in Control shall occur.
SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC. Holdings, either Borrower, any
of their respective Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in writing its
inability or unwillingness generally to pay, debts as they become due;
(b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial part
of the property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent or acquiescence,
permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property of
any thereof, and such trustee, receiver, sequestrator or other custodian
shall not be discharged within 60 days; PROVIDED, that Holdings, each
Borrower, each Subsidiary and each other Obligor hereby expressly
authorizes each Secured Party to appear in any court conducting any
relevant proceeding during such 60-day period to preserve, protect and
defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law or any dissolution, winding up or liquidation
proceeding, in respect thereof, and, if any such case or proceeding is not
commenced by Holdings, either Borrower, any Subsidiary or any Obligor, such
case or proceeding shall be consented to or acquiesced in by Holdings, such
Borrower, such Subsidiary or such Obligor, as the case may be, or shall
result in the entry of an order for relief or shall remain for 60 days
undismissed; PROVIDED, that Holdings, each Borrower, each Subsidiary and
each Obligor hereby
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expressly authorizes each Secured Party to appear in any court conducting
any such case or proceeding during such 60-day period to preserve, protect
and defend their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document or any Lien
granted thereunder shall (except in accordance with its terms), in whole or in
part, terminate, cease to be effective or cease to be the legally valid, binding
and enforceable obligation of any Obligor party thereto; any Obligor shall,
directly or indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability; or, except as permitted under any Loan
Document, any Lien securing any Obligation shall, in whole or in part, cease to
be a perfected first priority Lien (subject only to Liens permitted by SECTION
7.2.3).
SECTION 8.1.11. FAILURE OF SUBORDINATION. Unless otherwise waived or
consented to by the Agents, each Lender and the Issuers in writing, the
subordination provisions relating to any Subordinated Debt (the "SUBORDINATION
PROVISIONS") shall fail to be enforceable by the Agents, the Lenders and the
Issuers in accordance with the terms thereof, or the monetary Obligations shall
fail to constitute "Senior Debt" (or similar term) referring to the Obligations;
or Holdings, either Borrower or any of their respective Subsidiaries shall,
directly or indirectly, disavow or contest in any manner (i) the effectiveness,
validity or enforceability of any of the Subordination Provisions, (ii) that the
Subordination Provisions exist for the benefit of the Agents, the Lenders and
the Issuers or (iii) that all payments of principal of or premium and interest
on the Subordinated Debt, or realized from the liquidation of any property of
any Obligor, shall be subject to any of such Subordination Provisions.
SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) through (d) of SECTION 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other monetary Obligations
(including Reimbursement Obligations) shall automatically be and become
immediately due and payable jointly and
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severally by the Borrowers, without notice or demand to any Person and each
Borrower shall automatically and immediately be obligated jointly and severally
to Cash Collateralize all Letter of Credit Outstandings.
SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in CLAUSES (a) through (d) of SECTION
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrowers declare all or any portion of the
outstanding principal amount of the Loans and other monetary Obligations
(including Reimbursement Obligations) to be due and payable jointly and
severally by the Borrowers and/or the Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans and
other monetary Obligations which shall be so declared due and payable shall be
and become immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, the Commitments shall terminate and the
Borrowers shall automatically and immediately be obligated jointly and severally
to Cash Collateralize all Letter of Credit Outstandings.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. ACTIONS. Each Lender hereby appoints DLJ as its Syndication
Agent and BofA as its Administrative Agent under and for purposes of each Loan
Document. Each Lender authorizes each Agent to act on behalf of such Lender
under each Loan Document and, in the absence of other written instructions from
the Required Lenders received from time to time by the Agents (with respect to
which each Agent agrees that it will comply, except as otherwise provided in
this Section or as otherwise advised by counsel in order to avoid contravention
of applicable law), to exercise such powers hereunder and thereunder as are
specifically delegated to or required of such Agent by the terms hereof and
thereof, together with such powers as may be reasonably incidental thereto. Each
Lender hereby indemnifies (which indemnity shall survive any termination of this
Agreement) each Agent, PRO RATA according to such Lender's proportionate Total
Exposure Amount, from and against any and all liabilities, obligations, losses,
damages, claims, costs or expenses of any kind or nature whatsoever which may at
any time be imposed on, incurred by, or asserted against, such Agent in any way
relating to or arising out of any Loan Document, including reasonable attorneys'
fees, to the extent the same shall not have been reimbursed by the
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Borrowers; PROVIDED, HOWEVER, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted from such Agent's gross negligence or wilful
misconduct. Neither Agent shall be required to take any action under any Loan
Document, or to prosecute or defend any suit in respect of any Loan Document,
unless it is indemnified hereunder to its satisfaction. If any indemnity in
favor of either Agent shall be or become, in such Agent's determination,
inadequate, such Agent may call for additional indemnification from the Lenders
and cease to do the acts indemnified against hereunder until such additional
indemnity is given.
SECTION 9.2. FUNDING RELIANCE, ETC. Unless the Administrative Agent shall
have been notified in writing by any Lender by 3:00 p.m. on the Business Day
prior to a Borrowing that such Lender will not make available the amount which
would constitute its Percentage of such Borrowing on the date specified
therefor, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent and, in reliance upon such
assumption, make available to the applicable Borrower a corresponding amount. If
and to the extent that such Lender shall not have made such amount available to
the Administrative Agent, such Lender and the Borrowers severally agree (and the
Borrowers as among themselves jointly and severally agree) to repay the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date the Administrative Agent made such
amount available to the applicable Borrower to the date such amount is repaid to
the Administrative Agent, at the interest rate applicable at the time to Loans
comprising such Borrowing (in the case of either Borrower) and (in the case of a
Lender), at the Federal Funds Rate (for the first two Business Days after which
such amount has not been repaid, and thereafter at the interest rate applicable
to Loans comprising such Borrowing).
SECTION 9.3. EXCULPATION. Neither Agent nor any of its respective
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under any Loan Document, or in
connection herewith or therewith, except for its own wilful misconduct or gross
negligence, nor responsible for any recitals or warranties herein or therein,
nor for the effectiveness, enforceability, validity or due execution
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of any Loan Document, nor for the creation, perfection or priority of any Liens
purported to be created by any of the Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by any Obligor or
the Seller of its Obligations. Any such inquiry which may be made by either
Agent shall not obligate it to make any further inquiry or to take any action.
The Administrative Agent shall be entitled to rely upon advice of counsel
concerning legal matters and upon any notice, consent, certificate, statement or
writing which the Administrative Agent believes to be genuine and to have been
presented by a proper Person.
SECTION 9.4. SUCCESSOR. The Syndication Agent may resign as such upon one
Business Day's notice to the Borrowers and the Administrative Agent. The
Administrative Agent may resign as such at any time upon at least 30 days' prior
notice to the Borrowers and all Lenders. If the Administrative Agent at any time
shall resign, the Required Lenders, with the prior consent of Holdings (which
consent of Holdings shall not be required upon the occurrence and during the
continuation of a Specified Default) may appoint another Lender as a successor
Administrative Agent which shall thereupon become the Administrative Agent
hereunder. If no successor Administrative Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the U.S. (or any State thereof) or a
U.S. branch or agency of a commercial banking institution, and having a combined
capital and surplus of at least $250,000,000; PROVIDED, HOWEVER, that if, such
retiring Administrative Agent is unable to find a commercial banking institution
which is willing to accept such appointment and which meets the qualifications
set forth in above, 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 as provided for above. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall be entitled to
receive from the retiring Administrative Agent such documents of transfer and
assignment as such successor Administrative Agent may reasonably request, and
shall
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thereupon succeed to and become vested with all rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
the Administrative Agent, the provisions of this ARTICLE shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under the Loan Documents, and SECTIONS 11.3 and 11.4 shall
continue to inure to its benefit.
SECTION 9.5. CREDIT EXTENSIONS BY EACH AGENT. Each Agent and each Issuer
shall have the same rights and powers with respect to (x)(i) in the case of an
Agent, the Credit Extensions made by it or any of its Affiliates and (ii) in the
case of an Issuer, the Loans made by it or any of its Affiliates, and (y) the
Notes held by it or any of its Affiliates as any other Lender and may exercise
the same as if it were not an Agent or Issuer. Each Agent, each Issuer and each
Lender and each of their respective Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with Holdings, either
Borrower or any Subsidiary or Affiliate of Holdings or either Borrower as if
such Agent, Issuer or Lender were not an Agent, Issuer or Lender hereunder.
SECTION 9.6. CREDIT DECISIONS. Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender's
review of the financial information of Holdings, the Borrowers and their
respective Subsidiaries, the Loan Documents (the terms and provisions of which
being satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments. Each Lender also acknowledges that it will,
independently of each Agent and each other Lender, and based on such other
documents, information and investigations as it shall deem appropriate at any
time, continue to make its own credit decisions as to exercising or not
exercising from time to time any rights and privileges available to it under the
Loan Documents.
SECTION 9.7. COPIES, ETC. The Administrative Agent shall give prompt notice
to each Lender of each notice or request required or permitted to be given to
the Administrative Agent by Holdings or either Borrower pursuant to the terms of
the Loan Documents (unless concurrently delivered to the Lenders by the
Borrowers). The Administrative Agent will distribute to each Lender each
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document or instrument received for its account and copies of all other
communications received by the Administrative Agent from Holdings or either
Borrower for distribution to the Lenders by the Administrative Agent in
accordance with the terms of the Loan Documents.
SECTION 9.8. RELIANCE BY AGENTS. Each Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telecopy, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by such Agent. As to any matters not expressly provided for by
the Loan Documents, each Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder or thereunder in accordance with
instructions given by the Required Lenders or all of the Lenders as is required
in such circumstance, and such instructions of such Lenders and any action taken
or failure to act pursuant thereto shall be binding on all Secured Parties. For
purposes of applying amounts in accordance with this Section, each Agent shall
be entitled to rely upon any Secured Party that has entered into a Secured
Hedging Agreement with any Obligor or the Seller for a determination (which such
Secured Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding monetary Obligations owed to such
Secured Party under any Secured Hedging Agreement. Unless it has actual
knowledge evidenced by way of written notice from any such Secured Party and
either Borrower to the contrary, each Agent, in acting in such capacity under
the Loan Documents, shall be entitled to assume that no Secured Hedging
Agreements or Obligations in respect thereof are in existence or outstanding
between any Secured Party and any Obligor or the Seller.
SECTION 9.9. DEFAULTS. Neither Agent shall be deemed to have knowledge or
notice of the occurrence of a Default unless such Agent has received a written
notice from a Lender or either Borrower specifying such Default and stating that
such notice is a "Notice of Default". In the event that either Agent receives
such a notice of the occurrence of a Default, such Agent shall give prompt
notice thereof to the Lenders. Each Agent shall (subject to SECTION 11.1) take
such action with respect to such Default as shall be directed by the Required
Lenders; PROVIDED, that unless and until such Agent shall have received such
directions, such Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with
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respect to such Default as it shall deem advisable in the best interest of the
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all Lenders, as applicable.
SECTION 9.10. DOCUMENTATION AGENT. The Person identified on the signature
pages of this Agreement as the "Documentation Agent" shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement (or
any other Loan Document) other than those applicable to it in its capacity as a
Lender to the extent it is a Lender hereunder. Without limiting the foregoing,
the Lender so identified as the "Documentation Agent" shall not have or be
deemed to have any fiduciary relationship with any Lender. Each Person
acknowledges that it has not relied, and will not rely, on the Person so
identified as the "Documentation Agent" in deciding to enter into this Agreement
and each other Loan Document to which it is a party or in taking or not taking
action hereunder or thereunder.
ARTICLE X
HOLDINGS GUARANTY
SECTION 10.1. GUARANTY. Holdings hereby absolutely, unconditionally and
irrevocably
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand
or otherwise, of all monetary Obligations of each Borrower and each other
Obligor now or hereafter existing, whether for principal, interest, fees,
expenses or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of the
United States Bankruptcy Code, 11 U.S.C. Section 362(a), and the operation
of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
U.S.C. Section 502(b) and Section 506(b)), and
(b) indemnifies and holds harmless each Secured Party and each holder
of a Note for any and all costs and expenses (including reasonable
attorney's fees and expenses) incurred by such Secured Party or such
holder, as the case may be, in enforcing any rights under the guaranty set
forth in this ARTICLE X.
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The guaranty set forth in this ARTICLE X constitutes a guaranty of payment when
due and not of collection, and Holdings specifically agrees that it shall not be
necessary or required that any Secured Party or any holder of any Note exercise
any right, assert any claim or demand or enforce any remedy whatsoever against
either Borrower or any other Obligor (or any other Person) before or as a
condition to the obligations of Holdings under the guaranty set forth in this
ARTICLE X.
SECTION 10.2. ACCELERATION OF HOLDINGS GUARANTY. Holdings agrees that, in
the event of the dissolution or insolvency of either Borrower, any other Obligor
or Holdings, or the inability or failure of either Borrower, any other Obligor
or Holdings to pay debts as they become due, or an assignment by either
Borrower, any other Obligor or Holdings for the benefit of creditors, or the
commencement of any case or proceeding in respect of either Borrower, any other
Obligor or Holdings under any bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the monetary Obligations of each
Borrower and each other Obligor may not then be due and payable, Holdings agrees
that it will pay to the Administrative Agent for the account of the Secured
Parties forthwith the full amount which would be payable under the guaranty set
forth in this ARTICLE X by Holdings if all such monetary Obligations were then
due and payable.
SECTION 10.3. GUARANTY ABSOLUTE, ETC. The guaranty set forth in this
ARTICLE X shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force and effect until
all monetary Obligations of each Borrower and each other Obligor have been paid
in full in cash, all obligations of Holdings under the guaranty set forth in
this ARTICLE X shall have been paid in full in cash, all Letters of Credit have
been terminated or expired and all Commitments shall have terminated. Holdings
guarantees that the monetary Obligations of each Borrower and each other Obligor
will be paid strictly in accordance with the terms of this Agreement and each
other Loan Document under which they arise, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Secured Party or any holder of any Note with respect
thereto. The liability of Holdings under the guaranty set forth in this ARTICLE
X shall be absolute, unconditional and irrevocable irrespective of:
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(a) any lack of validity, legality or enforceability of this
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any right or
remedy against either Borrower, any other Obligor, the Seller or any
other Person (including any other guarantor (including Holdings))
under the provisions of this Agreement, any Note, any other Loan
Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
(including Holdings) of, or collateral securing, any Obligations of
either Borrower, any other Obligor or the Seller;
(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of either Borrower or any
other Obligor (other than Holdings), or any other extension, compromise or
renewal of any Obligation of either Borrower or any other Obligor (other
than Holdings);
(d) any reduction, limitation, impairment or termination of any
Obligations of either Borrower for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be
subject to (and Holdings hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations of either Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or
any consent to departure from, any of the terms of this Agreement, any Note
or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of
any collateral, or any amendment to or waiver or release or addition of, or
consent to departure from, any other guaranty, held by any Secured Party or
any holder of any Note securing any of the Obligations of either Borrower;
or
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(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, either Borrower, any
surety or any guarantor.
SECTION 10.4. REINSTATEMENT, ETC. Holdings agrees that the guaranty set
forth in this ARTICLE X shall continue to be effective or be reinstated, as the
case may be, if at any time any payment (in whole or in part) of any of the
Obligations is rescinded or must otherwise be restored by any Secured Party or
any holder of any Note, upon the insolvency, bankruptcy or reorganization of
either Borrower or otherwise, all as though such payment had not been made.
SECTION 10.5. WAIVER, ETC. Holdings hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
of either Borrower and the guaranty set forth in this ARTICLE X and any
requirement that the Administrative Agent, any other Secured Party or any holder
of any Note protect, secure, perfect or insure any security interest or Lien, or
any property subject thereto, or exhaust any right or take any action against
either Borrower, any other Obligor or any other Person (including the Seller or
any other guarantor (including Holdings)) or entity or any collateral securing
the Obligations of either Borrower.
SECTION 10.6. POSTPONEMENT OF SUBROGATION, ETC. Holdings agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation under the guaranty set forth in this ARTICLE X, by any payment made
under the guaranty set forth in this ARTICLE X or otherwise, until the prior
payment in full in cash of all monetary Obligations of each Borrower and each
other Obligor, the termination or expiration of all Letters of Credit and the
termination of all Commitments. Any amount paid to Holdings on account of any
such subrogation rights prior to the payment in full in cash of all monetary
Obligations of each Borrower and each other Obligor shall be held in trust for
the benefit of the Secured Parties and each holder of a Note and shall
immediately be paid to the Administrative Agent for the benefit of the Secured
Parties and each holder of a Note and credited and applied against the monetary
Obligations of each Borrower and each other Obligor, whether matured or
unmatured, in accordance with the terms of this Agreement; PROVIDED, HOWEVER,
that if
(a) Holdings has made payment to the Secured Parties and each holder
of a Note of all or any part of the monetary Obligations of either
Borrower, and
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(b) all monetary Obligations of each Borrower and each other Obligor
have been paid in full in cash, all Letters of Credit have been terminated
or expired and all Commitments have been permanently terminated,
each Secured Party and each holder of a Note agrees that, at Holdings' request,
the Administrative Agent, on behalf of the Secured Parties and the holders of
the Notes, will execute and deliver to Holdings appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to Holdings of an interest in the monetary Obligations
of the applicable Borrower resulting from such payment by Holdings. In
furtherance of the foregoing, for so long as any Obligations or Commitments
remain outstanding, Holdings shall refrain from taking any action or commencing
any proceeding against either Borrower (or its successors or assigns, whether in
connection with a bankruptcy proceeding or otherwise) to recover any amounts in
the respect of payments made under the guaranty set forth in this ARTICLE X to
any Secured Party or any holder of a Note.
SECTION 10.7. SUCCESSORS, TRANSFEREES AND ASSIGNS; TRANSFERS OF NOTES, ETC.
The guaranty set forth in this ARTICLE X shall:
(a) be binding upon Holdings, and its successors, transferees and
assigns;
(b) inure to the benefit of and be enforceable by each Agent and each
other Secured Party; and
(c) shall not constitute a novation.
Without limiting the generality of the foregoing CLAUSE (b), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all rights and benefits in respect thereof granted
to such Lender under any Loan Document (including the guaranty set forth in this
ARTICLE X) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of SECTION 11.11 and ARTICLE IX.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. WAIVERS, AMENDMENTS, ETC. The provisions of each Loan
Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by Holdings,
the Borrowers and the Required Lenders; PROVIDED, HOWEVER, that no such
amendment, modification or waiver shall:
(a) modify this Section without the consent of all Lenders;
(b) increase the aggregate amount of any Credit Extensions required to
be made by a Lender pursuant to its Commitments, extend the final
Commitment Termination Date of Credit Extensions made (or participated in)
by a Lender or reduce any fees described in ARTICLE III payable to any
Lender without the consent of such Lender;
(c) extend any date of payment of principal for any Lender's Loan, or
reduce the principal amount of, rate of interest or fees on any Loan or
Reimbursement Obligations (which shall in each case include the conversion
of all or any part of the Obligations into equity of any Obligor), or
extend the date on which interest or fees are payable in respect of such
Loan or Reimbursement Obligation, in each case, without the consent of the
Lender which has made such Loan or, in the case of a Reimbursement
Obligation, the Issuer owed, and those Lenders participating in, such
Reimbursement Obligation (it being understood and agreed, however, that any
vote to rescind any acceleration made pursuant to SECTION 8.2 and SECTION
8.3 of amounts owing with respect to the Loans and other Obligations shall
only require the vote of the Required Lenders);
(d) reduce the percentage set forth in the definition of "Required
Lenders" or modify any requirement hereunder that any particular action be
taken by all Lenders without the consent of all Lenders;
(e) except as otherwise expressly provided in a Loan Document, release
(i) either Borrower from its Obligations under the Loan Documents, Holdings
from its Obligations under ARTICLE X or any Subsidiary Guarantor from its
Obligations under the Subsidiary Guaranty or
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(ii) all or substantially all of the collateral under the Loan Documents,
in each case without the consent of all Lenders;
(f)(i) amend, modify or waive CLAUSE (b) of SECTION 3.1.1 or (ii) have
the effect (either immediately or at some later time) of enabling the
Borrowers to satisfy a condition precedent to the making of a Revolving
Loan or the issuance of a Letter of Credit unless such amendment,
modification or waiver shall have been consented to by the holders of at
least 51% of the Revolving Loan Commitments.
(g) amend, modify or waive the provisions of CLAUSE (a)(i) of SECTION
3.1.1 or CLAUSE (b) of SECTION 3.1.2 or effect any amendment, modification
or waiver that by its terms adversely affects the rights of Lenders
participating in any Tranche differently from those of Lenders
participating in other Tranches, unless such amendment, modification or
waiver shall have been consented to by the holders of at least 51% of the
aggregate amount of Loans outstanding under the Tranche or Tranches
affected by such modification, or, in the case of a modification affecting
the Revolving Loan Commitments, the Lenders holding at least 51% of the
Revolving Loan Commitments;
(h) change any of the terms of CLAUSE (b) of SECTION 2.3.2 or SECTION
2.3.2 without the consent of the Swing Line Lender; or
(i) affect adversely the interests, rights or obligations of either
Agent (in its capacity as an Agent) or any Issuer (in its capacity as an
Issuer), unless consented to by such Agent or such Issuer, as the case may
be.
No failure or delay on the part of either Agent, any Issuer or any Lender in
exercising any power or right under any Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. No notice to or demand on any Obligor or the Seller in any case
shall entitle it to any notice or demand in similar or other circumstances. No
waiver or approval by either Agent, any Issuer or any Lender under any Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or
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approval hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.
For purposes of this SECTION 11.1, the Syndication Agent, if any, in
coordination with the Administrative Agent, shall have primary responsibility,
together with the Borrowers, in the negotiation, preparation and documentation
relating to any amendment, modification or waiver under this Agreement, any
other Loan Document or any other agreement or document related hereto or thereto
contemplated pursuant to this Section.
SECTION 11.2. NOTICES; TIME. All notices and other communications provided
under each Loan Document shall be in writing or by facsimile and addressed,
delivered or transmitted, if to either Agent or either Borrower, at its address
or facsimile number set forth below its signature in this Agreement, and if to a
Lender or Issuer to the applicable Person at its address or facsimile number set
forth below its signature in this Agreement or set forth in the Lender
Assignment Agreement pursuant to which it became a Lender hereunder, or at such
other address or facsimile number as may be designated by any such party in a
notice to the other parties. Any notice, if mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any notice, if transmitted by facsimile,
shall be deemed given when the confirmation of transmission thereof is received
by the transmitter. Unless otherwise indicated, all references to the time of a
day in a Loan Document shall refer to New York City time.
SECTION 11.3. PAYMENT OF COSTS AND EXPENSES. The Borrowers jointly and
severally agree to pay on demand all expenses of each Agent (including the fees
and out-of-pocket expenses of Xxxxx, Xxxxx & Xxxxx, counsel to the Agents and of
local counsel, if any, who may be retained by or on behalf of the Agents) in
connection with
(a) the negotiation, preparation, execution and delivery of each Loan
Document, including schedules and exhibits, and any amendments, waivers,
consents, supplements or other modifications to any Loan Document as may
from time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated; and
(b) the filing or recording of any Loan Document (including the Filing
Statements) and all amendments, supplements, amendment and restatements and
other
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modifications to any thereof, searches made following the Closing Date in
jurisdictions where Filing Statements (or other documents evidencing Liens
in favor of the Secured Parties) have been recorded and any and all other
documents or instruments of further assurance required to be filed or
recorded by the terms of any Loan Document; and
(c) the preparation and review of the form of any document or
instrument relevant to any Loan Document.
The Borrowers further agree to jointly and severally pay, and to save each
Secured Party harmless from all liability for, any stamp or other taxes which
may be payable in connection with the execution or delivery of each Loan
Document, the Credit Extensions or the issuance of the Notes. The Borrowers also
agree to jointly and severally reimburse each Secured Party upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses of counsel to each Secured Party) incurred by such Secured Party
in connection with (x) the negotiation of any restructuring or "work-out" with
either Borrower, whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.
SECTION 11.4. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Secured Party, the Borrowers hereby jointly
and severally indemnify, exonerate and hold each Secured Party and each of their
respective officers, directors, employees and agents (collectively, the
"INDEMNIFIED PARTIES") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements, whether incurred in
connection with actions between or among the parties hereto or the parties
hereto and third parties (collectively, the "INDEMNIFIED LIABILITIES"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of any Credit Extension,
including all Indemnified Liabilities arising in connection with the
Transaction;
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(b) the entering into and performance of any Loan Document by any of
the Indemnified Parties (including any action brought by or on behalf of
either Borrower as the result of any determination by the Required Lenders
pursuant to ARTICLE V not to fund any Credit Extension, provided that any
such action is resolved in favor of such Indemnified Party);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor or any Subsidiary
thereof of all or any portion of the Capital Securities or assets of any
Person, whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to the
protection of the environment or the Release by any Obligor or any
Subsidiary thereof of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Obligor or any Subsidiary thereof of any
Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, such Obligor or
Subsidiary; or
(f) each Lender's Environmental Liability (the indemnification herein
shall survive repayment of the monetary Obligations and any transfer of the
property of any Obligor or its Subsidiaries by foreclosure or by a deed in
lieu of foreclosure for any Lender's Environmental Liability, regardless of
whether caused by, or within the control of, such Obligor or such
Subsidiary);
except for Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or wilful misconduct (as determined by a court having jurisdiction in a final
proceeding) or disputes between Indemnified Parties. Each Obligor and its
successors and assigns hereby waive, release and agree not to make any claim or
bring any cost recovery action against, any Indemnified Party under CERCLA or
any state equivalent, or any similar law now existing or hereafter enacted. It
is expressly understood and agreed
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that to the extent that any Indemnified Party is strictly liable under any
Environmental Laws, each Obligor's obligation to such Indemnified Party under
this indemnity shall likewise be without regard to fault on the part of any
Obligor with respect to the violation or condition which results in liability of
an Indemnified Party. If and to the extent that the foregoing undertaking may be
unenforceable for any reason, each Obligor agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
It is understood and agreed that, to the extent not precluded by a conflict
of interest, each Indemnified Party shall endeavor to make reasonable efforts to
minimize the legal and other expenses associated with any defense and any
potential settlement or judgment (including the use of single counsel selected
by such Indemnified Parties). Settlement of any such claim or litigation
involving any material indemnified amount will require the approval of the
relevant Obligor (such approval not to be unreasonably withheld or delayed).
SECTION 11.5. SURVIVAL. The obligations of each Borrower under SECTIONS
4.3, 4.4, 4.5, 4.6, 11.3 and 11.4, the obligations of Holdings under Article X
in respect of such obligations of each such Borrower and the obligations of the
Lenders under SECTION 9.1, shall in each case survive any assignment from one
Lender to another (in the case of SECTIONS 11.3 and 11.4) and the occurrence of
the Termination Date. The representations and warranties made by each Obligor
and the Seller in each Loan Document shall survive the execution and delivery of
such Loan Document.
SECTION 11.6. SEVERABILITY. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 11.7. HEADINGS. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of such Loan Document or any provisions thereof.
SECTION 11.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This Agreement
may be executed by the
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parties hereto in several counterparts, each of which shall be an original and
all of which shall constitute together but one and the same agreement. This
Agreement shall become effective when counterparts hereof executed on behalf of
each Borrower, each Agent and each Lender (or notice thereof satisfactory to the
Agents), shall have been received by the Agents.
SECTION 11.9. GOVERNING LAW; ENTIRE AGREEMENT. EACH LOAN DOCUMENT (OTHER
THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH STANDBY LETTER OF CREDIT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED
IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE
INTERNATIONAL STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NUMBER 590 (THE "ISP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE
ISP RULES, THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH OTHER LETTER OF
CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE
UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, 1993 REVISION, ICC
PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT GOVERNED BY
THE UNIFORM CUSTOMS, THE INTERNAL LAWS OF THE STATE OF NEW YORK. The Loan
Documents constitute the entire understanding among the parties hereto with
respect to the subject matter thereof and supersede any prior agreements,
written or oral, with respect thereto.
SECTION 11.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that neither Borrower may assign or
transfer its rights or obligations hereunder without the consent of all of the
Lenders.
SECTION 11.11. SALE AND TRANSFER OF CREDIT EXTENSIONS; PARTICIPATIONS IN
CREDIT EXTENSIONS NOTES. Each Lender may assign, or sell participations in, its
Loans, Letters of Credit and Commitments to one or more other Persons in
accordance with this the terms set forth below.
SECTION 11.11.1. ASSIGNMENTS. Any Lender (an "ASSIGNOR LENDER"),
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(a) with the written consent of Holdings, the Agents and (in the case
of any assignment of Revolving Loan Commitments and related participations
in Letters of Credit, Letter of Credit Outstandings and Swing Line Loans)
the Issuers (which consents (i) shall not be unreasonably delayed or
withheld, (ii) of Holdings shall not be required upon the occurrence and
during the continuance of any Event of Default and (iii) of the Agents and
the Issuers shall not be required in the case of any assignment made by DLJ
or any of its Affiliates), may at any time assign and delegate to one or
more commercial banks, funds that are regularly engaged in making,
purchasing or investing in loans or securities, or other financial
institutions, and
(b) with notice to Holdings, the Agents, and (in the case of any
assignment of Revolving Loan Commitments and related participations in
Letters of Credit, Letter of Credit Outstandings and Swing Line Loans) the
Issuers, but without the consent of Holdings, the Agents or the Issuers,
may assign and delegate to any of its Affiliates or Related Funds or to any
other Lender or any Affiliate or Related Fund of any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "ASSIGNEE LENDER"), all or any fraction of such Assignor Lender's Loans
and Commitments (and in the case of any assignment of Revolving Loan
Commitments, related participations in Letters of Credit, Letter of Credit
Outstandings and Swing Line Loans) (which assignment and delegation shall be, as
among Revolving Loan Commitments, Revolving Loans and participations in Letters
of Credit, Letter of Credit Outstandings and Swing Line Loans of a constant, and
not a varying, percentage) is in a minimum aggregate amount of (i) $1,000,000
(PROVIDED that (1) assignments that are made on the same day to funds that (x)
invest in commercial loans and (y) are managed or advised by the same investment
advisor or any Affiliate of such investment advisor may be treated as a single
assignment for purposes of the minimum amount and (2) no minimum amount shall be
required in the case of any assignment between two Lenders so long as the
Assignor Lender has an aggregate amount of Loans and Commitments of at least
$1,000,000 following such assignment) unless Holdings and the Agents otherwise
consent or (ii) the then remaining amount of such Assignor Lender's Loans and
Commitments; PROVIDED, HOWEVER, that any such Assignee Lender will comply, if
applicable, with the
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provisions contained in SECTION 4.6 and the Borrowers, each other Obligor, the
Seller and the Agents shall be entitled to continue to deal solely and directly
with such Assignor Lender in connection with the interests so assigned and
delegated to an Assignee Lender until
(A) written notice of such assignment and delegation, together with
payment instructions, addresses and related information with respect to
such Assignee Lender, shall have been given to Holdings and the Agents by
such Assignor Lender and such Assignee Lender;
(B) such Assignee Lender shall have executed and delivered to Holdings
and the Agents a Lender Assignment Agreement, accepted by the Agents;
(C) the processing fees described below shall have been paid; and
(D) the Administrative Agent shall have registered such assignment and
delegation in the Register pursuant to CLAUSE (b) of SECTION 2.7.
From and after the date that the Agents accept such Lender Assignment Agreement
and such assignment and delegation is registered pursuant to CLAUSE (b) of
SECTION 2.7, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in connection
with such Lender Assignment Agreement, shall have the rights and obligations of
a Lender hereunder and under the other Loan Documents, and (y) the Assignor
Lender, to the extent that rights and obligations hereunder have been assigned
and delegated by it in connection with such Lender Assignment Agreement, shall
be released from its obligations hereunder and under the other Loan Documents.
Any Assignor Lender that shall have previously requested and received any Note
or Notes in respect of any Tranche to which any such assignment applies shall,
upon the acceptance by the Administrative Agent of the applicable Lender
Assignment Agreement, xxxx such Note or Notes "exchanged" and deliver them to
the Borrowers (against, if the Assignor Lender has retained Loans or Commitments
with respect to the applicable Tranche and has requested replacement Notes
pursuant to CLAUSE (b)(ii) of SECTION 2.7, its receipt from the Borrowers of
replacement Notes in the principal amount of the Loans and Commitments of the
applicable Tranche retained by it). Such Assignor Lender or such Assignee Lender
(unless the Assignor Lender
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or the Assignee Lender is DLJ or one of its Affiliates) must also pay a
processing fee to the Administrative Agent upon delivery of any Lender
Assignment Agreement in the amount of $3,500, unless such assignment and
delegation is by a Lender to its Affiliate or Related Fund or if such assignment
and delegation is by a Lender to a Federal Reserve Bank, as provided below or is
otherwise consented to by the Administrative Agent. Any attempted assignment and
delegation not made in accordance with this SECTION 11.11.1 shall be null and
void. Nothing contained in this SECTION 11.11.1 shall prevent or prohibit any
Lender from pledging its rights (but not its obligations to make Loans or
participate in Letters of Credit, Letter of Credit Outstandings or Swing Line
Loans) under this Agreement and/or its Loans hereunder to a Federal Reserve Bank
in support of borrowings made by such Lender from such Federal Reserve Bank and
any Lender that is a fund that invests in bank loans may pledge all or any
portion of its rights (but not its obligations to make Loans or participate in
Letters of Credit or Letter of Credit Outstandings) hereunder to any trustee or
holders of obligations owed, or securities issued by, such fund as security for
such obligations or securities or to any other representative of such holders.
In the event that S&P, Xxxxx'x or Xxxxxxxx'x BankWatch (or InsuranceWatch
Ratings Service, in the case of Lenders that are insurance companies (or Best's
Insurance Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender with a Commitment to
make Revolving Loans or participate in Letters of Credit, Letter of Credit
Outstandings or Swing Line Loans becomes a Lender, downgrade the long-term
certificate of deposit rating or long-term senior unsecured debt rating of such
Lender, and the resulting rating shall be below BBB-, Baa3 or C (or BB, in the
case of Lender that is an insurance company (or B, in the case of an insurance
company not rated by InsuranceWatch Ratings Service)) respectively, then the
applicable Issuer or Holdings shall have the right, but not the obligation, upon
notice to such Lender and the Agents, to replace such Lender with an Assignee
Lender in accordance with and subject to the restrictions contained in this
Section, and such Lender hereby agrees to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in this Section)
all its interests, rights and obligations in respect of its Revolving Loan
Commitment under this Agreement to such Assignee Lender; PROVIDED, HOWEVER, that
(i) no such assignment shall conflict with any law, regulation or order of any
governmental authority and (ii) such Assignee Lender shall pay to such Lender in
immediately available funds on the date of such assignment
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the principal of and interest and fees (if any) accrued to the date of payment
on the Loans made, and Letters of Credit participated in, by such Lender
hereunder and all other amounts accrued for such Lender's account or owed to it
hereunder.
SECTION 11.11.2. PARTICIPATIONS. Any Lender may sell to one or more
commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "PARTICIPANT") participating interests in any
of the Loans, Commitments, or other interests of such Lender hereunder;
PROVIDED, HOWEVER, that
(a) no participation contemplated in this Section shall relieve
such Lender from its Commitments or its other obligations under any
Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) each Obligor, the Seller and the Agents shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under each Loan Document;
(d) no Participant, unless such Participant is an Affiliate of
such Lender or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action under any Loan
Document, except that such Lender may agree with any Participant that
such Lender will not, without such Participant's consent, take any
actions of the type described in CLAUSES (a), (b), (c) or (f) of
SECTION 11.1 with respect to Obligations participated in by such
Participant; and
(e) neither Holdings nor either Borrower shall be required to pay
any amount under this Agreement that is greater than the amount which
it would have been required to pay had no participating interest been
sold.
Each Borrower and Holdings acknowledges and agrees that each Participant, for
purposes of SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 11.3 and 11.4, shall
be considered a Lender. Each Participant shall only be indemnified for increased
costs pursuant to SECTION 4.3, 4.5 or 4.6 if and to the extent that the Lender
which sold such participating interest to such Participant concurrently is
entitled to
-147-
make, and does make, a claim on such Borrower or (with respect to any claim
under SECTION 4.6) Holdings for such increased costs and, in the case of SECTION
4.6, such Participant complies therewith as if it were a Lender. Any Lender that
sells a participating interest in any Loan, Commitment or other interest to a
Participant under this Section shall indemnify and hold harmless Holdings, each
Borrower and the Administrative Agent from and against any taxes, penalties,
interest or other costs or losses (including reasonable attorneys' fees and
expenses) incurred or payable by Holdings, such Borrower or the Administrative
Agent as a result of the failure of such Borrower or the Administrative Agent to
comply with its obligations to deduct or withhold any Taxes from any payments
made pursuant to this Agreement to such Lender or the Administrative Agent, as
the case may be, which Taxes would not have been incurred or payable if such
Participant had been a Non-Domestic Lender that was entitled to deliver to the
Borrowers, the Administrative Agent or such Lender, and did in fact so deliver,
a duly completed and valid Form W-8BEN or W-8ECI (or applicable successor form)
entitling such Participant to receive payments under this Agreement without
deduction or withholding of any United States federal Taxes.
Each Lender shall, as agent of Holdings and the Borrowers solely for the
purpose of this Section, record in book entries maintained by such Lender the
name and the amount of the participating interest of each Participant entitled
to receive payments in respect of any participating interests sold pursuant to
this Section.
SECTION 11.12. REORGANIZATION TRANSACTION. Notwithstanding any provision in
this Agreement or any other Loan Document to the contrary, so long as there
shall not exist any pending or threatened action, suit, investigation,
litigation or proceeding pending or threatened in any court or before any
arbitrator or governmental instrumentality which contests the consummation of
any of the following transactions, upon an election by Holdings,
(a) Holdings, at any time, in its sole discretion may,
contemporaneously with the assumption and issuances referred to in CLAUSES
(b) and (c) below, contribute all of its assets (including the Capital
Securities of WRC) to WRC; PROVIDED that the Administrative Agent shall
have a perfected pledge of, and security interest in and to all such assets
so contributed as it had immediately prior to such contribution pursuant to
such documentation and opinions in form and substance reasonably
satisfactory
-148-
to the Administrative Agent and its counsel as shall be necessary in the
opinion of the Administrative Agent to create, perfect or maintain the
collateral position of the Secured Parties therein;
(b) WRC may, contemporaneously with the contribution referred to in
CLAUSE (a) above and the issuances referred to in CLAUSE (c) below, assume
substantially all of the liabilities of Holdings so long as (i) no
Specified Default shall have occurred and be continuing on the date any
such liabilities are to be assumed, nor would a Specified Default result
from any such assumption and (ii) after giving effect to any such
assumption, Holdings and the Borrowers shall be in PRO FORMA compliance
with the covenants set forth in SECTION 7.2.4 for the most recent fully
ended Fiscal Quarter preceding the date of such assumption;
(c) WRC may, contemporaneously with the contribution and assumption
referred to in CLAUSES (a) and (b) above, issue its common stock and its
WRC XXX XX Preferred Equity to Holdings so long as
(A) no Specified Default shall have occurred and be continuing on
the date of such issuance, nor would a Specified Default result from
any such issuance;
(B) after giving effect to such issuance, the Borrowers shall be
in PRO FORMA compliance with the covenants set forth in SECTION 7.2.4
for the most recent fully ended Fiscal Quarter preceding the date of
such issuance; and
(C) after giving effect to such issuance, the Administrative
Agent shall have a perfected pledge of, and security interest in and
to all of the issued and outstanding interests of Capital Securities
of each Borrower (including the WRC XXX XX Preferred Equity) as the
Administrative Agent had immediately prior to such issuance in form
and substance reasonably satisfactory to the Administrative Agent and
its counsel, pursuant to such documentation and opinions as shall be
necessary in the opinion of the Administrative Agent to create,
perfect or maintain the collateral position of the Secured Parties
therein; and
-149-
(d) Holdings may distribute all of the WRC XXX XX Preferred
Equity to the PIK Preferred Equity Holders in exchange for all of the
PIK Preferred Equity and distribute up to 3% of the outstanding WRC
common stock held by Holdings in exchange for all or the remainder of
the Holdings (Unit) Common Stock.
The parties hereto agree to cooperate with each other in connection with
any such contribution or assumption or related transaction described in this
SECTION 11.12 to amend the Loan Documents to the extent reasonably necessary to
adjust for the effect of any such contribution, assumption or related
transaction described in this SECTION 11.12; PROVIDED that such amendments could
not reasonably be expected to have a material adverse effect on the rights or
remedies of any Secured Party under any Loan Document as in effect immediately
prior to any such amendment.
SECTION 11.13. CONFIDENTIALITY. Each of the Agents and the Lenders agrees
to maintain the confidentiality of the Confidential Information (as defined
below), except that Confidential Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors on a need-to-know basis (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Confidential Information and instructed to keep such
Confidential Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to any assignee or participant
of, or any successor to, any of its rights or obligations under this Agreement,
or to any direct or indirect contractual counterparties in agreements relating
to Hedging Obligations or such contractual counterparties' professional
advisors, (g) with the consent of Holdings or (h) to the extent such
Confidential Information (i) becomes publicly available other than as a result
of a breach of this Section or (ii) becomes available to any Agent or any Lender
on a nonconfidential basis from a source other than Holdings or any of its
Subsidiaries. For the purposes of this Section, "Confidential Information" means
all information received from Holdings or any of its Subsidiaries relating to
its business, other than any such information that is available to the
Administrative Agent or
-150-
any Lender on a nonconfidential basis prior to disclosure by Holdings or any of
its Subsidiaries; PROVIDED that, in the case of information received from
Holdings or any of its Subsidiaries after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Confidential Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Confidential Information as such Person would accord to
its own confidential information.
SECTION 11.14. OTHER TRANSACTIONS. Nothing contained herein shall preclude
the Administrative Agent, any Issuer or any other Lender from engaging in any
transaction, in addition to those contemplated by the Loan Documents, with
Holdings, either Borrower or any of their respective Affiliates in which
Holdings, such Borrower or such Affiliate is not restricted hereby from engaging
with any other Person.
SECTION 11.15. INDEPENDENCE OF COVENANTS. All covenants contained in this
Agreement and each other Loan Document shall be given independent effect such
that, in the event a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not, unless
expressly so provided in such first covenant, avoid the occurrence of a Default
or an Event of Default if such action is taken or such condition exists.
SECTION 11.16. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS, ANY ISSUER, HOLDINGS OR
EITHER BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND
MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE AGENTS' OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. HOLDINGS AND EACH BORROWER
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR
-151-
WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION
11.2. HOLDINGS AND EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT HOLDINGS OR EITHER BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, HOLDINGS AND SUCH BORROWER HEREBY IRREVOCABLY WAIVE TO THE FULLEST
EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE
LOAN DOCUMENTS.
SECTION 11.17. WAIVER OF JURY TRIAL. EACH AGENT, EACH LENDER, EACH ISSUER,
HOLDINGS AND EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH AGENT, SUCH
LENDER, SUCH ISSUER, HOLDINGS OR SUCH BORROWER IN CONNECTION THEREWITH. HOLDINGS
AND EACH BORROWER ACKNOWLEDGE AND AGREE THAT THEY HAVE RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR EACH AGENT, EACH LENDER AND EACH ISSUER ENTERING INTO
THE LOAN DOCUMENTS.
-152-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
WEEKLY READER CORPORATION,
as a Borrower
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Title:
Address: c/o Ripplewood Holdings, LLC
Xxx Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
JLC LEARNING CORPORATION,
as a Borrower
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Title:
Address: c/o Ripplewood Holdings, LLC
Xxx Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
WRC MEDIA INC., as a Guarantor
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Title:
Address: c/o Ripplewood Holdings, LLC
Xxx Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx Xxxxxx
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent
By: /s/ Xxxxxx Xxxxxx
-------------------------
Title:
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
-155-
BANK OF AMERICA, N.A.,
as the Administrative Agent
By: /s/ Xxxxx Xxxx
-------------------------
Title:
Address: 000 Xxxxx Xxxxx Xx.
XX0-000-00-00
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxx
GENERAL ELECTRIC CAPITAL CORPORATION,
as the Documentation Agent
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------
Title: Authorized Signatory
Address: 00 XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxxxx
-156-
LENDERS:
DLJ CAPITAL FUNDING, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------
Title: Senior Vice President
-158-
Bank of America, N.A.
By: /s/ Xxxxx Xxxx
-------------------------
Title:
-159-
SCHEDULE I
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
ITEM 6.7. Litigation.
ITEM 6.8. Existing Subsidiaries.
ITEM 6.11. Employee Benefit Plans.
ITEM 6.12. Environmental Matters.
ITEM 6.18(a) WRC Media Share Ownership.
ITEM 6.18(b) Weekly Reader Share Ownership.
ITEM 6.18(c) JLC Learning Corporation Share Ownership.
ITEM 7.1.10. Copyrights
ITEM 7.1.13. States with more than $1,000,000 Collateral
ITEM 7.2.2(b) Indebtedness to be Paid.
CREDITOR OUTSTANDING PRINCIPAL AMOUNT
-------- ----------------------------
ITEM 7.2.2(c) Existing Indebtedness
ITEM 7.2.3(c) Ongoing Liens.
ITEM 7.2.5(a) Ongoing Investments.
SCHEDULE II
PERCENTAGES
Revolving Loan Commitment Term A
------------------------- ------
Loans Term B Loans
----- ------------
-ii-
Section Page
------- ----
SCHEDULE II
ADMINISTRATIVE INFORMATION
-iii-
2
SCHEDULE 6.7
Litigation
----------
None.
3
SCHEDULE 6.8
Existing Subsidiaries
---------------------
WRC MEDIA INC.
- JLC Learning Corporation (a Delaware corporation)
- Weekly Reader Corporation (a Delaware corporation)
- Lifetime Learning Systems, Inc. (a Delaware corporation)
- American Guidance Service, Inc. (a Minnesota corporation)
- AGS International Sales, Inc. (a Minnesota corporation)
- Primedia Reference Inc. (a Delaware corporation)
- Funk & Wagnalls Yearbook Corporation (a Delaware
corporation)
- Xxxxxx Xxxxxxx, Inc. (a Wisconsin corporation)
4
SCHEDULE 6.11
Employee Benefit Plans
----------------------
American Guidance Service, Inc. is obligated to provide disability and life
insurance benefits until December 31, 2000 to Xxxxx Xxxxxxxxx, Xxxxxx Xxxxx,
Xxxxxx Xxxxxxx and Xxxxxxx Xxxxxxx pursuant to their employment agreements.
5
SCHEDULE 6.12
Environmental Matters
---------------------
None.
6
SCHEDULE 6.18(a)
WRC Media Share Ownership
-------------------------
WRC MEDIA COMMON STOCK
- EAC III L.L.C. (4,848,635 shares)
- SGC Partners II LLC (1,694,039 shares)
- Certain executives of WRC Media, Weekly Reader and JLC Learning
Corporation (107,523 shares)
- Holders of Unit Common Stock (205,656 shares)
WRC MEDIA PREFERRED STOCK (3,000,000 SHARES)
- DLJ Merchant Banking Partners and affiliated entities as set
forth in the Offering Memorandum
- The Northwestern Mutual Life Insurance Company
- Certain other investors
7
SCHEDULE 6.18(b)
Weekly Reader Share Ownership
-----------------------------
WEEKLY READER VOTING COMMON STOCK
- WRC Media Inc. (2,685,670 shares)
- PRIMEDIA, Inc. (144,330 shares)
WEEKLY READER PREFERRED STOCK
- WRC Media Inc. (3,000,000 shares)
8
SCHEDULE 6.18(c)
JLC Learning Corporation Share Ownership
----------------------------------------
JLC LEARNING CORPORATION COMMON STOCK
- WRC Media Inc. (10,000 shares)
9
SCHEDULE 7.1.10
JLC LEARNING CORPORATION
------------------------
COPYRIGHTS
----------
All copyrights for JLC Learning Corporation are filed in the United States.
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
Advantage Mgmt Sys. 1.1 March 23, 1998 TX-4-620-089
Advantage Mgmt. Sys. 1.2 March 23, 1998 TX-4-620-087
Advantage Mgmt. Sys. 2.0 March 20, 1998 TX-4-613-682
Advantage Mgmt. Sys. 2.1 March 20, 1998 TX-4-613-679
AIMS 2.2.4 Adv. Instruc. Mgmt. Sys. March 20, 1998 TX-4-613-680
Compass 2.2 for Windows/MacIntosh March 23, 1998 TX-4-620-090
Compass 2.2 for XXX April 7, 1998 TX-4-634-221
Compass 2.3 for Windows/MacIntosh March 23, 1998 TX-620-094
Compass 3.0 for Windows/MacIntosh March 20, 1998 TX-4-613-681
LMS 3.15 April 7, 1998 TX-4-634-220
Peer to Peer Install Compass/Tomorrow's Promise 3.1 September 30, 1998 TX-4-626-266
Personal Compass 1.0 for Windows/ MacIntosh March 23, 1998 TX-4-620-099
Worldware 2.0 March 27, 1998 TX-4-623-250
Worldware 2.01 March 20, 1998 TX-4-620-084
RIMS I April 7, 1998 TX-4-634-224
RIMS II 1.72 for MAC March 27, 1998 TX-4-623-266
Jostens Comprehensive Assessment Tests/Compass March 23, 1998 TX-4-620-091
Jostens Comprehensive Assessment Tests/Advantage March 23, 1998 TX-4-620-088
Learning Expedition Language Arts March 27, 1998 TX-4-623-253
Learning Expedition Mathematics Level 1-3 March 27, 1998 TX-4-623-256
Learning Expedition Mathematics Level 4-8 March 27, 1998 TX-4-623-248
Learning Expedition Math Higher Level Activities March 27, 1998 TX-4-623-252
Learning Expedition Reading Levels 1-3 March 27, 1998 TX-4-623-255
Learning Expedition Reading Levels 4-8 March 27, 1998 TX-4-623-247
Learning Expedition Written Expression March 27, 1998 TX-4-623-251
Learning First Elementary Mathematics March 23, 1998 TX-4-620-095
Learning First Skills and Employability Skills March 23, 1998 TX-4-620-102
Learning First Foundations in Mathematics March 27, 1998 TX-4-623-259
Learning First Middle School Mathematics March 27, 1998 TX-4-623-258
Learning First Foundations in Reading March 27, 1998 TX-4-623-260
Learning First New Edition: Elementary Mathematics March 23, 1998 TX-4-620-103
Learning First New Edition: Elementary Reading March 23, 1998 TX-4-623-106
Integrated Language Arts - Primary Level March 25, 1998 TX-4-623-208
Tomorrow's Promise Biology March 23, 1998 TX-4-620-092
Tomorrow's Promise Chemistry March 23, 1998 TX-4-620-096
Tomorrow's Promise Earth Science March 23, 1998 TX-4-620-097
Tomorrow's Promise Language Arts Level 3 March 20, 1998 TX-4-613-670
Tomorrow's Promise Language Arts Level 4 March 20, 1998 TX-4-613-672
Tomorrow's Promise Language Arts Level 5 March 20, 1998 TX-4-613-676
Tomorrow's Promise Language Arts Level 6 March 20, 1998 TX-4-613-674
Tomorrow's Promise Language Arts Level 7 March 20, 1998 TX-4-613-671
-----------------------------------------------------------------------------------------------------------------------
10
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
Tomorrow's Promise Language Arts Level 8 March 20, 1998 TX-4-613-677
Tomorrow's Promise Language Arts Essay Levels 6-8 March 27, 1998 TX-4-623-246
Tomorrow's Promise Mathematics Level K March 20, 1998 TX-4-613-675
Tomorrow's Promise Mathematics Level 1 March 20, 1998 TX-4-613-687
Tomorrow's Promise Mathematics Level 2 March 20, 1998 TX-4-613-690
Tomorrow's Promise Mathematics Level 3 March 20, 1998 TX-4-613-685
Tomorrow's Promise Mathematics Level 4 March 20, 1998 TX-4-613-688
Tomorrow's Promise Mathematics Level 5 March 20, 1998 TX-4-613-686
Tomorrow's Promise Mathematics Level 6 March 20, 1998 TX-4-613-683
Tomorrow's Promise Mathematics Level 7 March 20, 1998 TX-4-613-693
Tomorrow's Promise Mathematics Level 8 March 20, 1998 TX-4-613-689
Tomorrow's Promise Physical Science March 23, 1998 TX-4-620-093
Tomorrow's Promise Problem Solving Strategies 6-8 March 27, 1998 TX-4-623-245
Tomorrow's Promise Reading Level K March 20, 1998 TX-4-613-697
Tomorrow's Promise Reading Level 1 March 20, 1998 TX-4-613-684
Tomorrow's Promise Reading Level 2 March 20, 1998 TX-4-613-673
Tomorrow's Promise Reading Level 3 March 20, 1998 TX-4-613-696
Tomorrow's Promise Reading Level 4 March 20, 1998 TX-4-613-691
Tomorrow's Promise Reading Level 5 March 20, 1998 TX-4-613-695
Tomorrow's Promise Reading Level 6 March 20, 1998 TX-4-613-692
Tomorrow's Promise Reading Level 7 March 20, 1998 TX-4-613-698
Tomorrow's Promise Reading Level 8 March 20, 1998 TX-4-613-694
Tomorrow's Promise Spelling Level 1 March 23, 1998 TX-4-620-098
Tomorrow's Promise Spelling Level 2 March 20, 1998 TX-4-613-678
Action Math March 27, 1998 TX-4-623-265
Community Exploration April 7, 1998 TX-4-634-223
English Language Development - Primary March 25, 1998 TX-4-623-213
Steps to English Language Development - Beginner Level March 25, 1998 TX-4-623-215
Steps to English Language Development - March 25, 1998 TX-4-623-214
Intermediate/Advanced
Explorations in Science, Earth, Physical, Biology March 27, 1998 TX-4-623-267
Friday Afternoon April 7, 1998 TX-4-634-222
Learning With Literature March 23, 1998 TX-4-620-101
Literature Based Mathematics March 27, 1998 TX-4-623-257
Middle School Mathematics March 23, 1998 TX-4-620-100
Reading Skills Collection Reading All Around You April 7, 1998 TX-4-634-226
Reading Skills Collection Read to Imagine April 7, 1998 TX-4-634-227
Reading Skills Collection Reading for Meaning April 7, 1998 TX-4-634-228
Reading Skills Collection Read to Think April 7, 1998 TX-4-634-229
Spanish Language Arts March 27, 1998 TX-4-623-264
Stems April 7, 1998 TX-4-634-225
Tapestry March 27, 1998 TX-4-623-244
Writing Expedition 1.1 for Mac/Windows March 20, 1998 TX-4-613-669
8th Grade Math Course Outline March 27, 1998 TX-1-912-790
Grade 8 Math Support Materials March 27, 1998 TX-1-920-115
8th Grade Math Teaching Aide March 27, 1998 TX-1-920-450
Integrated Classroom Learning System
Mathematics Documentation March 27, 1998 TX-1-922-225
Spanish I Teachers' Guide March 27, 1998 TX-2-680-774
Spanish I: Course Outline, Answer Keys, Worksheets, Tests March 27, 1998 TX-2-686-570
ICLS: Spanish Courseware Sample March 27, 1998 TX-2-723-547
-----------------------------------------------------------------------------------------------------------------------
11
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
Language Arts 3: Teachers' Guide March 27, 1998 TX-2-671-312
Language Arts 3 Course Outline, Answer Keys, Worksheets, March 27, 1998 TX-2-671-313
Tests
Calculus: Teachers' Guide March 27, 1998 TX-2-125-878
Calculus: Course Outline, Answers Keys, Worksheets, Tests March 27, 1998 TX-2-125-879
Calculus: I C L S courseware sample March 27, 1998 XX-0-000-000
Xxxxxxx I: Teachers' Guide March 27, 1998 XX-0-000-000
Xxxxxxx I: Support materials sample March 27, 1998 XX-0-000-000
Xxxxxxx I: Integrated classroom learning system: course March 27, 1998 TX-2-179-056
outline, answer keys, worksheets, tests
Integrated Classroom Learning System: Mathematics: Grade 7: March 27, 1998 TX-2-289-047
Support materials sample
Integrated Classroom Learning System: Trig/Analysis: March 27, 1998 TX-2-289-047
Teachers' Guide
Integrated Classroom Learning System: Trig/Analysis: Course March 27, 1998 TX-2-289-049
outline, answer keys, worksheets, tests
Integrated Classroom Learning System: Mathematics: Grade 7: March 27, 1998 TX-2-289-050
course outline, answers keys, worksheets, tests
Integrated Classroom Learning System: Mathematics: Grade 7: March 27, 1998 TX-2-289-051
Teachers' Guide
Geometry: course outline, answer keys worksheets, tests March 27, 1998 TX-2-311-453
Geometry: Teachers' Guide March 27, 1998 TX-2-311-454
Integrated Classroom Learning System: Algebra II, Teachers' March 27, 1998 TX-2-326-534
Guide
Trigonometry/math analysis: support material's sample March 27, 1998 XX-0-000-000
Xxxxxxx II: support material sample March 27, 1998 XX-0-000-000
Xxxxxxx II: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-351-931
Geometry: support material sample March 27, 1998 TX-2-400-824
ICLS courseware sample: Language Arts 6 March 27, 1998 TX-2-582-332
Integrated Classroom Learning System, Language Arts 6: March 27, 1998 TX-2-582-333
course outline, answer keys, worksheets, tests
ICLS courseware sample: Language Arts March 27, 1998 TX-2-582-334
Integrated Classroom Learning System Language Arts 5: March 27, 1998 TX-2-582-335
course outline, answer keys, worksheets, test
Integrated Classroom Learning System: Language Arts 5: March 27, 1998 TX-2-582-336
Teachers' Guide
Integrated Classroom Learning System: Language Arts 6: March 27, 1998 TX-2-582-337
Teachers' Guide
Language Arts 4: Teachers' Guide March 27, 1998 TX-2-582-936
Language Arts 4: course outline, answer keys, worksheets tests March 27, 1998 TX-2-582-937
ICLS courseware sample March 27, 1998 TX-2-584-925
ICLS courseware sample March 27, 1998 TX-2-584-928
Secondary Language Arts: course outline, answer keys, March 27, 1998 TX-2-593-770
worksheets, tests
Math - Level 5: Teachers' Guide March 27, 1998 TX-2-671-309
German 1: Teachers' Guide March 27, 1998 TX-2-671-310
Physics: course outline, answer keys, worksheets, tests March 27, 1998 TX 0-000-000
ICLS courseware sample: 6th Grade Math March 27, 1998 TX-2-672-548
Physics: Teachers' Guide March 27, 1998 TX-2-672-549
German March 27, 1998 TX-2-672-555
Physics March 27, 1998 TX-2-672-556
Math, Level 5 March 27, 1998 TX-2-672-557
-----------------------------------------------------------------------------------------------------------------------
12
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
ICLS courseware sample: 4th Grade Math March 27, 1998 TX-2-678-479
Math - Level 6: Teachers' Guide March 27, 1998 TX-2-680-775
German 1: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-686-566
ICLS courseware sample: 5th Grade Math March 27, 1998 TX-2-686-567
Math - Level 6: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-686-568
Math - Level 4: course outline, answer keys, worksheets, tests March 27, 1998 TX-2-686-569
Mathematics: Grade 4: Teachers' Guide March 27, 1998 TX-2-686-571
ICLS Spanish 1: courseware sample March 27, 1998 TX-2-723-547
ICLS courseware sample: Language Arts 3 Ideal Learning: a March 27, 1998 TX-2-455-456
preschool curriculum for home use/created by Xxxxx X. Xxxxxx
-----------------------------------------------------------------------------------------------------------------------
Copyrights transferred from Xxxxxxx
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
Homonyms September 14, 1998 TX-1-919-673
Antonyms/Synonyms September 14, 1998 TX-1-923-273
Consonants September 14, 1998 TX-1-923-274
Vowels Tutorial September 14, 1998 TX-1-923-582
Number Words Level 2 September 14, 1998 TX-1-925-907
Create Your Own - Vocabulary French September 14, 1998 TX-1-926-180
Adjectives September 14, 1998 TX-1-926-189
Student Word Study September 14, 1998 TX-1-926-372
Super Wordfind September 14, 1998 TX-1-926-444
Create Intermediate September 14, 1998 TX-1-926-933
Create Vocabulary September 14, 1998 TX-1-926-934
Create Your Own - Vocabulary Spanish September 14, 1998 TX-1-927-484
Print Your Own - Bingo September 14, 1998 TX-1-928-566
Vocabulary Controlled September 14, 1998 TX-1-928-661
Presidents Physical Fitness September 14, 1998 TX-1-928-664
Letter Recognition September 14, 1998 TX-1-928-811
Create Your Own - Elementary September 14, 1998 TX-1-929-475
Parent Reporting September 14, 1998 TX-1-929-605
Fact Sheets September 14, 1998 TX-1-931-540
Word - a - Tech September 14, 1998 TX-1-940-789
Create Your Own - CCD Lessons September 14, 1998 TX-1-956-151
Metric Skills I & II September 14, 1998 TX-1-951-715
Adverbs September 14, 1998 TX-1-965-834
Wordsearch September 14, 1998 TX-1-965-935
The Medalist Series: Continents September 14, 1998 TX-2-012-225
Vowels September 14, 1998 TX-2-013-525
Prescriptive Math Drill September 14, 1998 TX-2-023-375
Analogies Tutorial I and II September 14, 1998 TX-2-025-231
Chariots, Cougars, and Kings September 14, 1998 TX-2-025-232
Kittens, Kids and a Frog September 14, 1998 TX-2-025-233
Scuffy and Friends September 14, 1998 TX-2-025-234
The Medalist Series: Presidents September 14, 1998 TX-2-025-245
Analogies Advanced I and II September 14, 1998 TX-2-026-237
The Medalist Series: Women in History September 14, 1998 TX-2-026-763
Famous Scientists September 14, 1998 TX-2-026-764
Number Words Level 1 September 14, 1998 TX-2-026-823
Create You Own - Spell It September 14, 1998 TX-2-027-287
Perplexing Puzzles September 14, 1998 TX-2-027-420
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13
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PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
Temperature Experiments September 14, 1998 TX-2-029-315
Create Your Own - Medalists September 14, 1998 TX-2-029-641
Chemical Elements September 14, 1998 TX-2-029-797
The Medalist Series: States September 14, 1998 TX-2-029-798
Integers/Equations I & II September 14, 1998 TX-2-030-245
Match Espanol September 14, 1998 TX-2-030-375
Reading For Meaning Level 1 Fairy Tales and Rhymes September 14, 1998 TX-2-030-397
Compound Words and Contractions September 14, 1998 TX-2-030-398
Early Skills September 14, 1998 TX-2-030-399
Expanded Notation September 14, 1998 TX-2-031-150
Expanded Notation September 14, 1998 TX-2-031-151
Fact or Opinion September 14, 1998 TX-2-031-425
Cause and Effect September 14, 1998 TX-2-031-444
Match Francais September 14, 1998 TX-2-031-613
Figurative Language I and II September 14, 1998 TX-2-031-654
The Medalist Series: Black Americans September 14, 1998 TX-2-033-164
Binary Math September 14, 1998 TX-2-038-700
Create Your Own - Lessons September 14, 1998 TX-2-038-794
What's First? What's Next? September 14, 1998 TX-2-057-107
Sense or Nonsense September 14, 1998 TX-2-057-108
Little Riddles September 14, 1998 TX-2-057-109
Word Families II September 14, 1998 TX-2-057-110
U.S. History September 14, 1998 TX-2-057-111
Xxxxxx and Sellers - A Guide to the Classics: Macbeth September 14, 1998 TX-2-080-883
Xxxxxx and Sellers - A Guide to the Classics: The Adventures September 14, 1998 TX-2-081-007
of Huckleberry Xxxx
Reading For Meaning Level 2: Fairy Tales and Rhymes September 14, 1998 TX-2-159-771
Double 'N' Trouble September 14, 1998 TX-2-180-698
Word Ladders September 14, 1998 TX-2-212-911
Capitalization Practice and Test September 14, 1998 TX-2-219-871
Print Your Own Bingo Plus September 14, 1998 TX-2-240-339
Create Your Own Lessons Advanced September 14, 1998 TX-2-242-832
Shakespeare September 14, 1998 TX-2-243-374
Opposites September 14, 1998 TX-2-247-992
Milt's Math Drills September 14, 1998 TX-2-249-310
Drawing Conclusions and Problem Solving September 14, 1998 TX-2-258-394
Verb Usage III September 14, 1998 TX-2-279-559
Verb Usage I September 14, 1998 TX-2-315-676
Brick by Brick Xxxxx 0 Xxxxxxxx Xxxxx Skills September 14, 1998 TX-2-369-842
Brick by Brick Xxxxx 0 Xxxxxxxx Xxxxx Skills September 14, 1998 TX-2-370-451
Brick by Brick Level 1 Building Comprehension September 14, 1998 TX-2-373-860
Brick by Brick Xxxxx 0 Xxxxxxxx Xxxxx Skills September 14, 1998 TX-2-375-505
Brick by Brick Level 2 Building Vocabulary September 14, 1998 TX-2-378-720
Brick by Brick Level 4 Building Comprehension September 14, 1998 TX-2-384-016
Vocabulary Dolch September 14, 1998 TX-2-398-411
Brick by Brick Level 5 Building Comprehension September 14, 1998 TX-2-400-368
-----------------------------------------------------------------------------------------------------------------------
Copyrights being transferred from Ideal
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
Calculus: Teacher's Guide Transfer Application Pending TX-2-125-878
as of June 18, 1998
-----------------------------------------------------------------------------------------------------------------------
14
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
Calculus: Outline, Answer Keys, Worksheets, Tests Transfer Application Pending TX-2-125-879
as of June 18, 1998
Calculus: Support Materials Sample Transfer Application Pending TX-2-172-445
as of June 18, 0000
Xxxxxxx I: Teacher's Guide Transfer Application Pending TX-2-178-697
as of June 18, 0000
Xxxxxxx I: Support Materials Sample Transfer Application Pending TX-2-178-698
as of June 18, 0000
Xxxxxxx I: Outline, Answer Keys, Worksheets, Tests Transfer Application Pending TX-2-179-056
as of June 18, 1998
Mathematics Grade 7: Support Materials Sample Transfer Application Pending TX-2-289-047
as of June 18, 1998
Trigonometry/Math Analysis: Teacher's Guide Transfer Application Pending TX-2-289-048
as of June 18, 1998
Trigonometry/Math Analysis: Outline, Answer Keys, Transfer Application Pending TX-2-289-049
Worksheets, Tests as of June 18, 1998
Mathematics Grade 7: Outline, Answer Keys, Transfer Application Pending TX-2-289-050
Worksheets, Tests as of June 18, 1998
Mathematics Grade 7: Teacher's Guide Transfer Application Pending TX-2-289-051
as of June 18, 1998
Geometry: Course Outline, Answer Keys, Transfer Application Pending TX-2-311-453
Worksheets, Tests as of June 18, 1998
Geometry: Teacher's Guide Transfer Application Pending TX-2-311-454
as of June 18, 0000
Xxxxxxx II: Teacher's Guide Transfer Application Pending TX-2-326-534
as of June 18, 1998
Trigonometry/Math Analysis: Support Materials Transfer Application Pending TX-2-326-535
Sample as of June 18, 1998
Algebra II: Support Materials Sample Transfer Application Pending TX-2-345-457
as of June 18, 0000
Xxxxxxx II: Outline, Answer Keys, Worksheets, Tests Transfer Application Pending TX-2-351-931
as of June 18, 1998
Geometry: Support Materials Sample Transfer Application Pending TX-2-400-824
as of June 18, 1998
ICLS Courseware Sample Language Arts 6 Transfer Application Pending TX-2-582-332
as of June 18, 0000
Xxxxxxxx Xxxx 6 Course Outline, Answer Keys, Transfer Application Pending TX-2-582-333
Worksheets, Tests as of June 18, 1998
ICLS Courseware Sample: Language Arts 5 Transfer Application Pending TX-2-582-334
as of June 18, 1998
ICLS Courseware Sample: Language Arts 5 Transfer Application Pending TX-2-582-334
as of June 18, 0000
Xxxxxxxx Xxxx 5: Course Outline, Answer Keys, Transfer Application Pending TX-2-582-335
Worksheets, Tests as of June 18, 0000
Xxxxxxxx Xxxx 5: Teacher's Guide Transfer Application Pending TX-2-582-336
as of June 18, 0000
Xxxxxxxx Xxxx 6: Teacher's Guide Transfer Application Pending TX-2-582-337
as of June 18, 0000
Xxxxxxxx Xxxx 4: Teacher's Guide Transfer Application Pending TX-2-582-936
as of June 18, 0000
Xxxxxxxx Xxxx 4: Course Outline, Answer Keys, Transfer Application Pending TX-2-582-937
Worksheets, Tests as of June 18, 1998
-----------------------------------------------------------------------------------------------------------------------
15
-----------------------------------------------------------------------------------------------------------------------
PRODUCT NAME DATE FILED/ISSUED COPYRIGHT NUMBER
------------ ----------------- ----------------
ICLS Courseware Sample: Secondary Language Arts Transfer Application Pending TX-2-584-925
as of June 18, 1998
ICLS Courseware Sample: Language Arts 4 Transfer Application Pending TX-2-593-770
as of June 18, 1998
Secondary Language Arts: Course Outline, Answer Transfer Application Pending TX-2-686-566
Keys, Worksheets, Tests as of June 18, 1998
Math - Level 5: Teacher's Guide Transfer Application Pending TX-2-671-309
as of June 18, 1998
German I: Teacher's Guide Transfer Application Pending TX-2-671-310
as of June 18, 1998
Physics: Course Outlines, Answer Keys, Worksheets, Transfer Application Pending TX-2-671-315
Tests as of June 18, 1998
ICLS Courseware Sample: 6th Grade Math Transfer Application Pending TX-2-672-548
as of June 18, 1998
Physics: Teacher's Guide Transfer Application Pending TX-2-672-549
as of June 18, 1998
ICLS Courseware Sample: German Transfer Application Pending TX-2-672-555
as of June 18, 1998
ICLS Courseware Sample: Physics Transfer Application Pending TX-2-672-556
as of June 18, 1998
Math - Level 5: Course Outline, Answer Keys, Transfer Application Pending TX-2-672-557
Worksheets, Tests as of June 18, 1998
ICLS Courseware Sample: 4th Grade Math Transfer Application Pending TX-2-678-479
as of June 18, 1998
Math - Level 6: Teacher's Guide Transfer Application Pending TX-2-680-775
as of June 18, 1998
German I: Course Outline, Answer Keys, Worksheets, Transfer Application Pending TX-2-686-566
Tests as of June 18, 1998
ICLS Courseware Sample: 5th Grade Math Transfer Application Pending TX-2-686-567
as of June 18, 1998
Math - Level 6: Course Outline, Answer Keys, Transfer Application Pending TX-2-686-568
Worksheets, Tests as of June 18, 1998
Math - Level 4: Course Outline, Answer Keys, Transfer Application Pending TX-2-686-569
Worksheets, Tests as of June 18, 1998
Mathematics Grade 4: Teacher's Guide Transfer Application Pending TX-2-686-571
as of June 18, 1998
ICLS Courseware Sample: Language Arts 3 Transfer Application Pending TX-2-739-191
as of June 18, 1998
-----------------------------------------------------------------------------------------------------------------------
16
PRIMEDIA REFERENCE INC.
-----------------------
COPYRIGHTS
----------
All copyrights for Primedia Reference Inc. are filed in the United States.
--------------------------------------------------------------------------------
PRODUCT NAME COPYRIGHT NUMBER
------------ ----------------
The 1999 World Almanac TX-4-898-925
--------------------------------------------------------------------------------
* Copyright registration submitted every November, upon publication, for
each new edition of The World Almanac. Copyright registration will be
submitted shortly for the 2000 World Almanac (publication date:
11/30/99)
FUNK & WAGNALLS YEARBOOK CORPORATION
-------------------------------------
COPYRIGHTS
----------
All copyrights for Funk & Wagnalls Yearbook Corporation are filed in the
United States.
--------------------------------------------------------------------------------
PRODUCT NAME COPYRIGHT NUMBER
------------ ----------------
Funk & Wagnalls New Encyclopedia TX-4-860-036
(full text as of 12/31/98)
--------------------------------------------------------------------------------
* Copyright registration submitted every 3 months for the updated and
expanded Funk & Wagnalls New Encyclopedia full text database. Because
of the slowness of the copyright office, Funk & Wagnalls has not yet
received any of the copyright registration certificates for any of the
first three quarters of 1999.
AMERICAN GUIDANCE SERVICE, INC.
-------------------------------
COPYRIGHTS
----------
All copyrights for American Guidance Service Inc. are filed in the United
States.
--------------------------------------------------------------------------------
PRODUCT NAME COPYRIGHT NUMBER
------------ ----------------
PPVT TX4-531-097
K-TEA TX4-737-590
DIAL TX2-907-985
BASC TX4-172-450
Vineland TX3-431-949
WRMT XX0-000-000
XxxXxxx Test TX2-380-291
OWLS (LC/OE Version) TX3-803-842
--------------------------------------------------------------------------------
17
--------------------------------------------------------------------------------
OWLS (WE Version) TX4-198-026
PIAT TX2-624-349
GFTA TX1-856-134
K-BIT TX3-003-231
K-ABC (Easel 1) TX1-563-401
K-ABC (Easel 2) TX1-499-140
K-ABC (Easel 3) TX1-452-750
K-ABC (Test Record Form) TX1-499-139
K-ABC (Manual) TX1-458-788
K-ABC (Photo Cards) TX-176-650
K-ABC (ASSIST) TX1-412-461
K-ABC (Scoring Manual) TX1-458-787
K-ABC (Supplemental Forms) TX2-268-847
--------------------------------------------------------------------------------
* Copyrights are for educational tests. Information provided above is
for the 10 most valuable tests of an approximate total of 40.
Information for the remaining tests will be provided as it is
received.
Other Copyrights
----------------
WRC and its subsidiaries (including those listed above) generate numerous
copyrights each week in connection with numerous ongoing publishing activities.
None of these copyrights are individually material and they are not listed
above.
18
SCHEDULE 7.1.13
States with more than $1,000,000 Collateral
-------------------------------------------
- Connecticut
- Minnesota
- New Jersey
- Ohio
- Wisconsin
19
SCHEDULE 7.2.2(b)
Indebtedness to be Paid
-----------------------
JLC LEARNING CORPORATION
- Existing Bank of America, N.A. credit facility
- SGC Partners II LLC Senior Subordinated 13.375% Note
- The Northwestern Mutual Life Insurance Company Senior Subordinated
13.375% Note
20
SCHEDULE 7.2.2(c)
Existing Indebtedness
---------------------
Weekly Reader Corporation, Xxxxxx Xxxxxxx, Inc. and American Guidance Service,
Inc. have indebtedness secured by the liens set forth on Schedule 7.2.3 (c).
21
SCHEDULE 7.2.3(c)
ONGOING LIENS
----------------------------------------------------------------------------------------------------------------
UCC-1
-----
DEBTOR SECURED PARTY FILING OFFICE/FILE NUMBER DESCRIPTION SUMMARY
------ ------------- ------------------------- -------------------
----------------------------------------------------------------------------------------------------------------
Weekly WAM!NET, Inc. Connecticut State A WAM!NET Network
Reader 0000 Xxxx 000xx Xxxxxx 0001895389 Access Device, comprising
Corporation Minneapolis, MN 12/15/98 a case containing a Silicone
55438 Graphics central processing
unit, router, a Channel
Service Unit and Data Service
Unit modem and uninterrupted
power source.
----------------------------------------------------------------------------------------------------------------
Weekly Oce' Printing Systems New Jersey SoS 2090 LED Printer
Reader USA, Inc. 1804287 (refurbished)
Corporation 0000 Xxxxxx Xxxxx 00/00/00
Xxxx.
Xxxx Xxxxx, XX 00000
----------------------------------------------------------------------------------------------------------------
Gareth The Brewery Works, Wisconsin SoS All equipment, fixtures,
Xxxxxxx, Inc. Inc. 1095127 inventory, documents
000 Xxxx Xxxxxx Xxxxxx 11/20/89 relating to inventory,
Xxxxxxxxx, XX 00000 general intangibles,
1095128 accounts, contract rights,
11/20/89 chattel paper and
instruments, all additions
and accessions to, all spare
1460562 and repair parts, special
10/10/94 tools, equipment and
replacements for, all
returned or repossessed
1460561 goods, and all proceeds and
10/10/94 products.
----------------------------------------------------------------------------------------------------------------
American Screen Actors Guild, Minnesota SoS Debtor(s) grant a continuing
Guidance Inc. 1996213 security interest in all right,
Service, Inc. 0000 Xxxxxxxx Xxxx. 12/15/97 title and interest of
Los Angeles, CA Debtor(s) in the television
AGS Media 90036-3600 project currently entitled,
"Xxxx Animation" and all
properties and things of
value pertaining thereto.
----------------------------------------------------------------------------------------------------------------
American Screen Actors Guild, Kentucky, Jefferson County Debtor(s) grant a continuing
Guidance Inc. 97-10362 security interest in all right,
Service, Inc. 0000 Xxxxxxxx Xxxx. 12/16/97 title and interest of
Los Angeles, CA Debtor(s) in the television
AGS Media 90036-3600 project currently entitled,
"Xxxx Animation" and all
properties and things of
value pertaining thereto.
----------------------------------------------------------------------------------------------------------------
22
SCHEDULE 7.2.5(a)
Ongoing Investments
-------------------
- JLC Learning Corporation is a shareholder of 640 preferred shares
of ESI Inc., d/b/a Elemental Software, a California corporation,
with offices at 0000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX,
00000
- JLC Learning Corporation is a shareholder of 5619 shares of
common stock in PictureTel Corporation, a Delaware corporation
with offices at 000 Xxxxxxxxx Xxxx, Xxxxxxx, XX, 00000. The
shares are held in escrow as a result of the sale of Starlight
Network.
- JLC Learning Corporation is a limited partner in Basics
Partnership, a Utah limited partnership formed November 30, 1982.
