EXHIBIT 10.150
CREDIT AGREEMENT
DATED AS OF FEBRUARY 15, 2002
AMONG
INSURANCE AUTO AUCTIONS, INC.,
AS THE BORROWER
THE LENDERS FROM TIME TO TIME PARTIES HERETO,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS......................................................................... 1
1.1. Certain Defined Terms......................................................... 1
1.2. References.................................................................... 17
1.3. Supplemental Disclosure....................................................... 17
ARTICLE II THE CREDITS......................................................................... 18
2.1. Description of Facility; Commitment........................................... 18
2.2. Required Payments; Termination Date........................................... 18
2.2.1. Required Payments......................................................... 18
2.2.2. Termination Date.......................................................... 18
2.2.3. Conversion to Term Loan................................................... 18
2.3. Ratable Loans................................................................. 19
2.4. Types of Advances............................................................. 19
2.5. Commitment Fee; Reductions in Aggregate Commitment........................... 19
2.5.1. Commitment Fee............................................................ 19
2.5.2. Reductions in Aggregate Commitment........................................ 19
2.5.3. Increase of Aggregate Commitment.......................................... 19
2.6. Minimum Amount of Each Advance................................................ 20
2.7. Optional Principal Payments; Mandatory Principal Prepayments.................. 20
2.7.1. Optional Principal Payments............................................... 20
2.7.2. Mandatory Principal Prepayments........................................... 20
2.8. Method of Selecting Types and Interest Periods for New Advances............... 20
2.9. Conversion and Continuation of Outstanding Advances........................... 21
2.10. Interest Rates................................................................ 21
2.11. Rates Applicable After Default................................................ 22
2.12. Method of Payment............................................................. 22
2.13. Noteless Agreement; Evidence of Indebtedness.................................. 22
2.14. Telephonic Notices............................................................ 23
2.15. Interest Payment Dates; Interest and Fee Basis................................ 23
2.16. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions; Availability of Loans............................................. 24
2.17. Lending Offices............................................................... 24
2.18. Non-Receipt of Funds by the Administrative Agent.............................. 24
2.19. Replacement of Lender......................................................... 25
ARTICLE III YIELD PROTECTION; TAXES............................................................. 25
3.1. Yield Protection.............................................................. 25
3.2. Changes in Capital Adequacy Regulations....................................... 26
3.3. Availability of Types of Advances............................................. 27
3.4. Funding Indemnification....................................................... 27
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3.5. Taxes......................................................................... 27
3.6. Lender Statements; Survival of Indemnity...................................... 29
ARTICLE IV CONDITIONS PRECEDENT................................................................ 29
4.1. Initial Advance............................................................... 29
4.2. Each Advance.................................................................. 30
ARTICLE V REPRESENTATIONS AND WARRANTIES...................................................... 31
5.1. Existence and Standing........................................................ 31
5.2. Authorization and Validity.................................................... 31
5.3. No Conflict; Government Consent............................................... 31
5.4. Financial Statements.......................................................... 32
5.5. Material Adverse Change; No Default........................................... 32
5.6. Taxes......................................................................... 32
5.7. Litigation and Contingent Obligations......................................... 32
5.8. Subsidiaries.................................................................. 33
5.9. Accuracy of Information....................................................... 33
5.10. Regulation U.................................................................. 33
5.11. Material Agreements........................................................... 33
5.12. Compliance With Laws.......................................................... 33
5.13. Ownership of Properties....................................................... 34
5.14. ERISA; Foreign Pension Matters................................................ 34
5.15. Plan Assets; Prohibited Transactions.......................................... 34
5.16. Environmental Matters......................................................... 34
5.17. Investment Company Act: Other Regulation...................................... 34
5.18. Indebtedness.................................................................. 35
5.19. Insurance..................................................................... 35
5.20. Solvency...................................................................... 35
5.21. Permits; Intellectual Property................................................ 35
5.22. Labor Matters................................................................. 35
ARTICLE VI COVENANTS........................................................................... 35
6.1. Financial Reporting........................................................... 35
6.2. Use of Proceeds............................................................... 37
6.3. Notice of Default............................................................. 38
6.4. Conduct of Business; Charter Amendments; Accounting Changes................... 38
6.4.1. Conduct of Business....................................................... 38
6.4.2. Charter Amendments........................................................ 38
6.4.3. Accounting Changes........................................................ 38
6.5. Taxes; Claims, Judgments, Etc................................................. 38
6.6. Insurance..................................................................... 39
6.7. Compliance with Laws.......................................................... 39
6.8. Maintenance of Properties..................................................... 39
6.9. Further Assurances............................................................ 40
6.10. Restricted Payments........................................................... 40
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6.11. Indebtedness.................................................................. 40
6.12. Merger........................................................................ 41
6.13. Sale of Assets................................................................ 41
6.14. Investments and Acquisitions.................................................. 41
6.15. Liens......................................................................... 42
6.16. Consolidated Rentals.......................................................... 43
6.17. Affiliates.................................................................... 43
6.18. ERISA......................................................................... 43
6.19. Financial Covenants........................................................... 43
6.19.1. Fixed Charge Coverage Ratio............................................... 43
6.19.2. Leverage Ratio............................................................ 44
6.19.3. Minimum Net Worth......................................................... 45
6.19.4. 2002 Capital Expenditures................................................. 45
6.19.5. Liquidity................................................................. 45
6.20. Addition of Guaranty; Guarantors.............................................. 45
6.21. Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities....... 45
ARTICLE VII DEFAULTS............................................................................ 45
7.1. Breach of Representations or Warranties....................................... 45
7.2. Failure to Make Payments When Due............................................. 46
7.3. Breach of Covenants........................................................... 46
7.4. Other Breaches................................................................ 46
7.5. Default as to Other Indebtedness.............................................. 46
7.6. Voluntary Bankruptcy; Appointment of Receiver; Etc............................ 46
7.7. Involuntary Bankruptcy; Appointment of Receiver; Etc.......................... 47
7.8. Custody or Control of Property................................................ 47
7.9. Judgments..................................................................... 47
7.10. Unfunded Liabilities.......................................................... 47
7.11. Other ERISA Liabilities....................................................... 47
7.12. Environmental Matters......................................................... 48
7.13. Change in Control............................................................. 48
7.14. Other Default................................................................. 48
7.15. Rate Management Obligation.................................................... 48
7.16. Loss of Licenses.............................................................. 48
7.17. Material Adverse Change. The Borrower or its Subsidiaries have
a Material Adverse Change..................................................... 48
7.18. Guaranty...................................................................... 48
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...................................... 48
8.1. Acceleration.................................................................. 48
8.2. Amendments.................................................................... 49
8.3. Preservation of Rights........................................................ 50
ARTICLE IX GENERAL PROVISIONS.................................................................. 50
9.1. Survival of Representations................................................... 50
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9.2. Governmental Regulation....................................................... 50
9.3. Headings...................................................................... 50
9.4. Entire Agreement.............................................................. 50
9.5. Several Obligations; Benefits of this Agreement............................... 50
9.6. Expenses; Indemnification..................................................... 51
9.7. Numbers of Documents.......................................................... 51
9.8. Accounting.................................................................... 52
9.9. Severability of Provisions.................................................... 52
9.10. Nonliability of Lenders....................................................... 52
9.11. Confidentiality............................................................... 52
9.12. Lenders Not Utilizing Plan Assets............................................. 53
9.13. Nonreliance................................................................... 53
9.14. Disclosure.................................................................... 53
9.15. Subordination of Intercompany Indebtedness.................................... 53
ARTICLE X THE AGENT........................................................................... 54
10.1. Appointment; Nature of Relationship........................................... 54
10.2. Powers........................................................................ 54
10.3. General Immunity.............................................................. 55
10.4. No Responsibility for Loans, Recitals, etc.................................... 55
10.5. Action on Instructions of Lenders............................................. 55
10.6. Employment of the Administrative Agent and Counsel............................ 55
10.7. Reliance on Documents; Counsel................................................ 56
10.8. Administrative Agent's Reimbursement and Indemnification...................... 56
10.9. Notice of Default............................................................. 56
10.10. Rights as a Lender............................................................ 56
10.11. Lender Credit Decision........................................................ 57
10.12. Successor Administrative Agent................................................ 57
10.13. Agent and Arranger Fees....................................................... 58
10.14. Delegation to Affiliates...................................................... 58
ARTICLE XI SETOFF; RATABLE PAYMENTS............................................................ 58
11.1. Setoff........................................................................ 58
11.2. Ratable Payments.............................................................. 58
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS................................... 58
12.1. Successors and Assigns........................................................ 59
12.1.1. Successors and Assigns.................................................... 59
12.2. Participations................................................................ 59
12.2.1. Permitted Participants; Effect............................................ 59
12.2.2. Voting Rights............................................................. 59
12.2.3. Benefit of Setoff......................................................... 60
12.3. Assignments................................................................... 60
12.3.1. Permitted Assignments..................................................... 60
12.3.2. Effect; Effective Date.................................................... 60
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12.3.3. The Register.............................................................. 61
12.4. Dissemination of Information.................................................. 61
12.5. Tax Treatment................................................................. 61
ARTICLE XIII NOTICES............................................................................. 61
13.1. Notices....................................................................... 61
13.2. Change of Address............................................................. 62
ARTICLE XIV COUNTERPARTS........................................................................ 62
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL........................ 62
15.1. CHOICE OF LAW................................................................. 62
15.2. CONSENT TO JURISDICTION....................................................... 62
15.3. WAIVER OF JURY TRIAL.......................................................... 63
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EXHIBITS
Exhibit A - Form of Borrower's Counsel's Opinion
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Assignment Agreement
Exhibit D - Form of Promissory Note (if requested)
Exhibit E - Form of Guaranty
Exhibit F - List of Closing Documents
SCHEDULES
Pricing Schedule
Commitment Schedule
Schedule 1- Investments
Schedule 2- Indebtedness
Schedule 3- Liens
Schedule 4- Subsidiaries
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CREDIT AGREEMENT
This Agreement, dated as of February 15, 2002, is among INSURANCE AUTO
AUCTIONS, INC., an Illinois corporation, the institutions from time to time
parties hereto as Lenders (whether by execution of this Agreement or an
assignment pursuant to Section 12.3), and LASALLE BANK NATIONAL ASSOCIATION, a
national banking association, as Administrative Agent. The parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
1.1. Certain Defined Terms. As used in this Agreement:
"ACCOUNTING CHANGES" is defined in Section 9.8 hereof.
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which the Borrower or
any of its Subsidiaries (i) acquires any going business or all or substantially
all of the assets of any firm, corporation or limited liability company, or
division thereof, whether through purchase of assets, merger or otherwise or
(ii) directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage of voting
power) of the outstanding ownership interests of a partnership or limited
liability company.
"ADMINISTRATIVE AGENT" means LaSalle Bank in its capacity as
contractual representative of the Lenders pursuant to Article X, and not in its
individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article X.
"ADVANCE" means a borrowing hereunder consisting of the aggregate
amount of several Revolving Loans (i) made by the Lenders on the same Borrowing
Date, or (ii) converted or continued by the Lenders on the same date of
conversion or continuation, consisting, in either case, of the aggregate amount
of the several Revolving Loans of the same Type and, in the case of LIBOR Loans,
for the same Interest Period.
"AFFECTED LENDER" is defined in Section 2.19.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of ten percent (10%) or more of any class of voting securities (or
other voting interests) of the controlled Person or possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of voting
securities, by contract or otherwise.
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"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all
the Lenders, as may be adjusted from time to time pursuant to the terms hereof.
The initial Aggregate Commitment is Twenty Million and 00/100 Dollars
($20,000,000).
"AGGREGATE OUTSTANDING CREDIT EXPOSURE" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"AGREEMENT" means this Credit Agreement, as it may be amended,
restated, supplemented or otherwise modified and as in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Borrower referred to in Section 5.4; provided, however, that except as provided
in Section 9.8, with respect to the calculation of financial ratios and other
financial tests required by this Agreement, "Agreement Accounting Principles"
means generally accepted accounting principles as in effect in the United States
as of the date of this Agreement, applied in a manner consistent with that used
in preparing the financial statements of the Borrower referred to in Section 5.4
hereof.
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of
interest per annum equal to the higher of (i) the Prime Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"APPLICABLE COMMITMENT FEE RATE" means, at any time, the percentage
rate per annum at which Commitment Fees are accruing on the unused portion of
the Aggregate Commitment at such time as set forth in the Pricing Schedule.
"APPLICABLE MARGIN" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"ARRANGER" means LaSalle Bank.
"ARTICLE" means an article of this Agreement unless another document is
specifically referenced.
"ASSET SALE" is defined in Section 6.13.
"ASSIGNMENT AGREEMENT" is defined in Section 12.3.1.
"AUTHORIZED OFFICER" means any of the chief executive officer,
president, chief operating officer, chief financial officer, chief accounting
officer or treasurer of the Borrower, acting singly.
"AVAILABLE AGGREGATE COMMITMENT" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
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"BORROWER" means Insurance Auto Auctions, Inc., an Illinois
corporation, and its permitted successors and assigns (including, without
limitation, a debtor-in-possession on its behalf).
"BORROWING DATE" means a date on which an Advance is made hereunder.
"BORROWING NOTICE" is defined in Section 2.8.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago, Illinois for the conduct of substantially
all of their commercial lending activities, interbank wire transfers can be made
on the Fedwire system and dealings in Dollars are carried on in the London
interbank market and (ii) for all other purposes, a day (other than a Saturday
or Sunday) on which banks generally are open in Chicago, Illinois for the
conduct of substantially all of their commercial lending activities and
interbank wire transfers can be made on the Fedwire system.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including
Capitalized Leases and purchase money Indebtedness) by the Borrower and its
consolidated Subsidiaries during that period that, in conformity with Agreement
Accounting Principles, are required to be included in or reflected by the
property, plant, equipment or similar fixed asset accounts reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries.
"CAPITALIZED LEASE" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CASH EQUIVALENT INVESTMENTS" means, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) time deposits and certificates
of deposit of any investment grade commercial bank having, or which is the
principal banking subsidiary of an investment grade bank holding company
organized under the laws of the United States, any State thereof, the District
of Columbia or any foreign jurisdiction having capital, surplus and undivided
profits aggregating in excess of $500,000,000, with maturities of not more than
one year from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than ninety (90) days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (ii) above, provided that such
repurchase obligations are secured by a first priority security interest in such
underlying securities which have, on the date of purchase thereof, a fair market
value of at least 100% of the amount of the repurchase obligations, (iv)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 by S&P or P-1 by Xxxxx'x and in
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3
each case maturing not more than one year after the date of acquisition by such
Person, (v) investments in money market funds substantially all of the assets of
which are comprised of securities of the types described in clauses (i) through
(iv) above, (vi) investment in variable rate demand obligations rated at least A
by S&P or A2 by Xxxxx'x and (vii) demand deposit accounts maintained in the
ordinary course of business.
"CHANGE" is defined in Section 3.2.
"CHANGE IN CONTROL" means (i) the acquisition by any Person, or two or
more Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934), directly or indirectly, of thirty percent (30%) or more
(provided, however, that ValueAct Capital Partners, L.P., shall be permitted to,
directly or indirectly, acquire a beneficial ownership of not more than
thirty-nine percent (39%) in the aggregate) of the outstanding shares of voting
stock of the Borrower; or (ii) the majority of the Board of Directors of the
Borrower fails to consist of Continuing Directors; or (iii) except as expressly
permitted under the terms of this Agreement, the Borrower consolidates with or
merges into another Person or conveys, transfers or leases all or substantially
all of its property to any Person, or any Person consolidates with or merges
into the Borrower, in either event pursuant to a transaction in which the
outstanding capital stock of the Borrower is reclassified or changed into or
exchanged for cash, securities or other property; or (iv) except as otherwise
expressly permitted under the terms of this Agreement, the Borrower shall cease
to own and control, directly or indirectly, free and clear of all Liens and
other encumbrances all of the economic and voting rights associated with all of
the outstanding capital stock of each of the Borrower's Subsidiaries or shall
cease to have the power, directly or indirectly, to elect all of the members of
the board of directors of each of the Borrower's Subsidiaries.
"CLOSING DATE" means February 15, 2002.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth on the Commitment Schedule or in
an Assignment Agreement executed pursuant to Section 12.3, as it may be modified
as a result of any assignment that has become effective pursuant to Section
12.3.2 or as otherwise modified from time to time pursuant to the terms hereof.
"COMMITMENT FEE" is defined in Section 2.5.1.
"COMMITMENT SCHEDULE" means the Schedule identifying each Lender's
Commitment as of the Closing Date, or as amended pursuant to Section 2.5.3,
attached hereto and identified as such.
"COMMITMENT TERMINATION DATE" means the earlier to occur of (a) the
Conversion Date, and (b) the date the Aggregate Commitments are reduced to zero
or otherwise terminated pursuant to the terms hereof, including, without
limitation, pursuant to Section 2.2 and 2.5 and Article VIII hereof.
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"CONSOLIDATED" refers to the consolidation of accounts in accordance
with Agreement Accounting Principles.
"CONSOLIDATED EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization and (v) extraordinary non-cash losses incurred other than in
the ordinary course of business, minus, to the extent included in Consolidated
Net Income, extraordinary gains realized other than in the ordinary course of
business, all calculated for the Borrower and its Subsidiaries on a consolidated
basis.
"CONSOLIDATED INDEBTEDNESS" means, at any time, the Indebtedness of the
Borrower and its Subsidiaries (exclusive of Off-Balance Sheet Liabilities)
calculated on a consolidated basis as of such time.
"CONSOLIDATED INTEREST EXPENSE" means, with reference to any period,
the interest expense of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
after-tax income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
"CONSOLIDATED NET WORTH" means at any time the consolidated
stockholders' equity of the Borrower and its Subsidiaries calculated on a
consolidated basis as of such time in accordance with Agreement Accounting
Principles.
"CONSOLIDATED RENTALS" means, with reference to any period, the Rentals
of the Borrower and its Subsidiaries calculated on a consolidated basis for such
period.
"CONTINGENT OBLIGATIONS" of a Person means any agreement, undertaking
or arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"CONTINUING DIRECTOR" means, with respect to any Person as of any date
of determination, any member of the board of directors of such Person who (a)
was a member of such board of directors on the Closing Date, or (b) was
nominated for election or elected to such board of directors with the approval
of the required majority of the Continuing Directors who were members of such
board at the time of such nomination or election; provided that any individual
who is so elected or nominated in connection with a merger, consolidation,
acquisition or similar transaction shall not be a Continuing Director unless
such individual was a Continuing Director prior thereto.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any indenture, mortgage, deed of trust, contract, undertaking, document or
other agreement,
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5
instrument or securities to which that Person is a party or by which it or any
of its properties is bound, or to which it or any of its properties is subject.
"CONTROLLED GROUP" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"CONVERSION DATE" means February 15, 2003.
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.9.
"CONVERTED LOAN TERMINATION DATE" means the date from and after the
Conversion Date that is the earlier of (a) December 31, 2006 and (b) the date on
which all of the Obligations shall become due and payable pursuant to the terms
hereof, including, without limitation, pursuant to Article VIII hereof.
"DEFAULT" means an event described in Article VII.
"DOLLAR" and "$" means the lawful currency of the United States of
America.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EXCLUDED TAXES" means, in the case of each Lender or applicable
Lending Office and the Administrative Agent, taxes imposed on its overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or Agent is incorporated or organized or any political
combination or subdivision or taxing authority thereof or (ii) the jurisdiction
in which the Administrative Agent's or Lender's principal executive office or
such Lender's applicable Lending Office is located or in which, other than as a
result of the transaction evidenced by this Agreement, the Administrative Agent
or Lender otherwise is, or at any time was, engaged in business.
"EXHIBIT" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the
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6
Federal Reserve System arranged by Federal funds brokers on such day, as
published for such day (or, if such day is not a Business Day, for the
immediately preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations at approximately 10:00 a.m. (Chicago time) on such day
on such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative Agent in its
sole discretion.
"FISCAL QUARTER" means any quarter of a Fiscal Year of the Borrower.
"FISCAL YEAR" means the annual fiscal reporting period of the Borrower
and its Subsidiaries consisting of a period of 12 consecutive months ending on
the last Sunday in December in any calendar year.
"FLOATING RATE" means, for any day, a rate per annum equal to the
Alternate Base Rate for such day, changing when and as the Alternate Base Rate
changes.
"FLOATING RATE ADVANCE" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which, except as
otherwise provided in Section 2.11, bears interest at the Floating Rate.
"FOREIGN PENSION PLAN" means any employee benefit plan as described in
Section 3(3) of ERISA for which the Borrower or any member of its Controlled
Group is a sponsor or administrator and which (i) is maintained or contributed
to for the benefit of employees of the Borrower, any of its respective
Subsidiaries or any member of its Controlled Group, (ii) is not covered by ERISA
pursuant to Section 4(b)(4) of ERISA, and (iii) under applicable local law, is
required to be funded through a trust or other funding vehicle.
"GUARANTOR" means each Material Subsidiary of the Borrower.
"GUARANTY" means each Guaranty Agreement (and any and all supplements
thereto) executed from time to time by each Guarantor, in favor of the
Administrative Agent for the benefit of itself and the Lenders, in substantially
the form of Exhibit E attached hereto, as amended, restated, supplemented or
otherwise modified from time to time.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services, including
without limitation, earn-outs and other similar forms of contingent purchase
prices (except accounts payable arising in the ordinary course of business but
only if and so long as the same are payable on customary terms in trade and in
any event no later than one year after the incurrence thereof), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all obligations of such Person created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to possession or
sale of such property), (e) all obligations of such Person constituting
Capitalized Lease Obligations, (f) all obligations, contingent or otherwise, of
such Person under acceptance, letter of credit or similar facilities, (g)
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all obligations of such Person to purchase or redeem Redeemable Preferred Stock
valued at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends, (h) all obligations of such Person in respect
of Rate Management Agreements (valued in an amount equal to the highest
termination payment, if any, that would be payable upon termination for any
reason on the date of determination), (i) all Contingent Obligations of such
Person, (j) all Off-Balance Sheet Liabilities of such Person and (k) all
Indebtedness referred to in clauses (a) through (h) above secured by (or for
which the holder of such Indebtedness has existing right, contingent or
otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness;
but in each case excluding obligations under operating leases and obligations
under employment contracts entered into in the ordinary course of business. The
amount of Indebtedness with respect to earn-outs and other similar forms of
contingent purchase prices shall be equal to the present value of the
obligation, in the case of known recurring obligations, and, in all other cases,
the maximum reasonably anticipated liability in respect of the obligation
assuming such Person is required to perform thereunder.
"INTEREST PERIOD" means, with respect to a LIBOR Advance, a period of
one, two, three or six months or such other period agreed to by the Lenders and
the Borrower, commencing on a Business Day selected by the Borrower pursuant to
this Agreement. Such Interest Period shall end on but exclude the day which
corresponds numerically to such date one, two, three or six months or such other
agreed upon period thereafter, provided, however, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month or such other succeeding period, such Interest Period shall end on the
last Business Day of such next, second, third or sixth succeeding month or such
other succeeding period. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade, or stock, securities, membership interests or other similar property
received from an account obligor in full or partial settlement of a delinquent
account receivable, only so long as such stock, securities, membership interests
or other similar property shall be held for a period of one (1) year or less) or
contribution of capital by such Person; stocks, bonds, mutual funds, partnership
interests, notes, debentures or other securities owned by such Person; any
deposit accounts and certificate of deposit owned by such Person; and structured
notes, derivative financial instruments and other similar instruments or
contracts owned by such Person, any other direct or indirect purchase or
acquisition by such Person of any assets other than assets used in the ordinary
course of business; and any non-arms length transaction by such Person with
another Person or any other transfer of assets by such Person in another Person,
with the amount of such Investment being an amount equal to the net benefit
derived by such other Person resulting from any such transactions.
"LASALLE BANK" means LaSalle Bank National Association, a national
banking association, in its individual capacity, and its successors.
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"LENDERS" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"LENDING OFFICE" means, with respect to a Lender or the Administrative
Agent, the office, branch, subsidiary or affiliate of such Lender or Agent
listed on the signature pages hereof, or on the administrative information
sheets provided to the Administrative Agent in connection herewith, or otherwise
selected by such Lender or Agent pursuant to Section 2.17.
"LEVERAGE RATIO" is defined in Section 6.19.2.
"LIBOR ADVANCE" means an Advance which, except as otherwise provided in
Section 2.11, bears interest at the applicable LIBOR Rate.
"LIBOR BASE RATE" means, with respect to a LIBOR Rate Loan for the
relevant Interest Period, the APPLICABLE London interbank offered rate for
deposits in Dollars appearing on Dow Xxxxx Markets (Telerate) Page 3750 as of
11:00 a.m. (London time) two (2) Business Days prior to the first day of such
Interest Period, and having a maturity equal to such Interest Period, provided
that, if the Dow Xxxxx Markets (Telerate) rate is not available for any reason,
the applicable LIBOR Base Rate for the relevant Interest Period shall instead be
the applicable British Bankers' Association Interest Settlement Rate for
deposits in Dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London
time) two (2) Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period. Any LIBOR Base Rate determined
on the basis of the rate displayed on Dow Xxxxx Markets (Telerate) in accordance
with the foregoing provisions of this subparagraph shall be subject to
corrections, if any, made in such rate and displayed by the Dow Xxxxx Markets
(Telerate) within one hour of the time when such rate is first displayed by such
service.
"LIBOR LOAN" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable LIBOR Rate requested by the
Borrower pursuant to Sections 2.8 and 2.9.
"LIBOR RATE" means, with respect to a LIBOR Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the then Applicable Margin, changing as and when the Applicable Margin
changes. The LIBOR Rate shall be rounded to the next higher multiple of 1/16th
of 1% if the rate is not such a multiple.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement, and, in the case of stock, stockholders agreements, voting trust
agreements and all similar agreements).
"LOAN" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
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9
"LOAN DOCUMENTS" means this Agreement, the Guaranty and all other
documents (including any other guaranties (or supplements thereto) executed
pursuant to Section 6.20), instruments, notes (including any Notes issued
pursuant to Section 2.13 (if requested)) and agreements executed in connection
herewith or therewith or contemplated hereby or thereby, as the same may be
amended, restated or otherwise modified and in effect from time to time.
"MATERIAL ADVERSE CHANGE" means a material adverse change in the
business, properties, condition (financial or otherwise), performance, results
of operations or prospects of the Borrower or its Subsidiaries, or any event or
circumstance or series of events or circumstances, which has had a Material
Adverse Effect.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), operations, performance,
results of operations or prospects of the Borrower, or the Borrower and its
Subsidiaries taken as a whole, (ii) the ability of the Borrower to perform its
obligations under the Loan Documents, or (iii) the validity or enforceability of
any of the Loan Documents or the rights or remedies of the Administrative Agent
or the Lenders thereunder.
"MATERIAL INDEBTEDNESS" is defined in Section 7.5(i).
"MATERIAL SUBSIDIARY" means any direct or indirect Subsidiary of the
Borrower that at any time has (i) assets with a total book value equal to or
greater than one percent (1%) of the aggregate book value of the Consolidated
total assets of the Borrower and its Subsidiaries or (ii) Consolidated Net Worth
that is equal to or greater than one percent (1%) of the Consolidated Net Worth
of the Borrower and its Subsidiaries, or (iii) assets that contributed one
percent (1%) or more of the Borrower's Consolidated Net Income, in each case as
reported in the most recent financial statements delivered to the Lenders
pursuant to Section 6.1.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"NET CASH PROCEEDS" means, with respect to any Asset Sale by any
Person, (a) cash or Cash Equivalent Investments (freely convertible into
Dollars) received by such Person or any Subsidiary of such Person from such
Asset Sale (including cash received as consideration for the assumption or
incurrence of liabilities incurred in connection with or in anticipation of such
Asset Sale), after (i) provision for all income or other taxes measured by or
resulting from such Asset Sale, (ii) payment of all brokerage commissions and
other fees and expenses and commissions related to such Asset Sale, and (iii)
all amounts used to repay Indebtedness (and any premium or penalty thereon)
secured by a Lien on any asset disposed of in such Asset Sale or which is or may
be required (by the express terms of the instrument governing such Indebtedness
or by applicable law) to be repaid in connection with such Asset Sale (including
payments made to obtain or avoid the need for the consent of any holder of such
Indebtedness); and (b) cash or Cash Equivalent Investments payments in respect
of any other consideration
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10
received by such Person or any Subsidiary of such Person from such Asset Sale
upon receipt of such cash payments by such Person or such Subsidiary.
"NON-U.S. LENDER" is defined in Section 3.5(iv).
"NOTE" is defined in Section 2.13.
"OBLIGATIONS" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to any of the
Administrative Agent, any Lender, the Arranger, any affiliate of the
Administrative Agent or any Lender, the Arranger, or any indemnitee under the
provisions of Section 9.6 or any other provisions of the Loan Documents, in each
case of any kind or nature, present or future, arising under this Agreement or
any other Loan Document, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason
of an extension of credit, loan, foreign exchange risk, guaranty,
indemnification, or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, paralegals' fees, and any other sum chargeable to the Borrower or
any of its Subsidiaries under this Agreement or any other Loan Document.
"OFF-BALANCE SHEET LIABILITY" of a Person means (i) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries
(calculated to include the unrecovered investment of purchasers or transferees
of accounts or any other obligation of the Borrower or such transferor to
purchasers/transferees of interests in accounts or notes receivable or the agent
for such purchasers/transferees), (ii) any liability under any sale and
leaseback transaction which is not a Capitalized Lease, (iii) any liability
under any financing lease or so-called "synthetic lease" or "tax ownership
operating lease" transaction entered into by such Person, or (iv) any obligation
arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on
the consolidated balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
"OPERATING LEASE" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"OPERATING LEASE OBLIGATIONS" means, as at any date of determination,
the amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of the
Borrower and its Subsidiaries.
"OTHER TAXES" is defined in Section 3.5(ii).
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11
"OUTSTANDING CREDIT EXPOSURE" means, as to any Lender at any time, the
aggregate principal amount of its Loans outstanding at such time.
"PARTICIPANTS" is defined in Section 12.2.1.
"PAYMENT DATE" means the last day of each March, June, September and
December, and the Converted Loan Termination Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" means any Acquisition that satisfies the
following requirements:
(i) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith;
(ii) in the case of an Acquisition of the capital stock of an
entity, the Acquisition shall be of at least eighty percent (80%) of such
capital stock of such entity, and such acquired entity shall be (x) merged with
and into the Borrower or any wholly-owned Subsidiary of the Borrower immediately
following such Acquisition, with the Borrower or such wholly-owned Subsidiary
being the surviving corporation following such merger or (y) the results of
operations of such entity shall be reported on a consolidated basis with the
Borrower and its consolidated Subsidiaries;
(iii) the purchase is consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis and approved by the target
company's board of directors (and shareholders, if necessary) prior to the
consummation of the Acquisition;
(iv) the businesses being acquired shall be substantially similar,
related or incidental to the businesses or activities engaged in by the Borrower
and its Subsidiaries on the Closing Date;
(v) effective as of the date of each such Acquisition (taking into
account the effect of such purchase and any Indebtedness incurred in connection
therewith), the Borrower shall deliver to the Administrative Agent a certificate
executed by an Authorized Officer, which certificate shall demonstrate that sum
of (a) all cash and Cash Equivalent Investments as of such date plus (b) the
Available Aggregate Commitment as of such date shall not be less than
$10,000,000;
(vi) prior to such Acquisition, the Borrower shall deliver to the
Administrative Agent and the Lenders a certificate from one of the Authorized
Officers, demonstrating to the satisfaction of the Administrative Agent that
after giving effect to such Acquisition and the incurrence of any Indebtedness
permitted by Section 6.12 in connection therewith, on a pro forma basis using
historical audited (if any) or reviewed unaudited financial statements obtained
from the seller(s) in respect of each such Acquisition as if the Acquisition and
such incurrence of Indebtedness had occurred on the first day of the
twelve-month period ending on the last day of the Borrower's most recently
completed fiscal quarter, the Borrower would have been in compliance with the
financial covenants in Section 6.21 and not otherwise in Default, provided,
SIDLEY XXXXXX XXXXX & XXXX
12
however, no such certificate demonstrating the foregoing shall be required for
Permitted Acquisitions for which the purchase price paid (taking into account
any Indebtedness incurred in connection therewith) is equal to or less than
$1,000,000; and
(vii) after giving effect to all Indebtedness consisting of seller
financing incurred in connection with such Acquisition, the Borrower and its
Subsidiaries shall be in compliance with Section 6.11.
"PERMITTED INVESTMENTS" means Investments existing on the Closing Date
and described on Schedule 1 hereto and other Investments consisting of: (i)
loans or advances in the ordinary course of business to suppliers, officers,
directors and employees incidental to carrying on the business of the Borrower
or any Subsidiary (including employee relocation loans); (ii) receivables
arising from the sale of goods and services in the ordinary course of business
of the Borrower and its Subsidiaries; (iii) loans to Subsidiaries and loans by a
Subsidiary to the Borrower or another Subsidiary to the extent permitted under
Section 6.11, in each case in the ordinary course of business and (iv) Permitted
Acquisitions.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means, with respect to any
Person, any Indebtedness, whether secured or unsecured, including Capitalized
Leases, incurred by such Person to finance the acquisition of fixed assets, so
long as (1) at the time of such incurrence, no Default or Unmatured Default has
occurred and is continuing or would result from such incurrence, (2) such
Indebtedness has a scheduled maturity and is not due on demand and (3) such
Indebtedness does not exceed the lower of the fair market value or the cost of
the applicable fixed assets on the date acquired.
"PERMITTED SALE AND LEASEBACK TRANSACTIONS", means any Sale and
Leaseback Transaction, (i) that is a Sale and Leaseback Transaction of computers
and loaders of the Borrower or its Subsidiaries consummated pursuant to
documentation reasonably acceptable to the Administrative Agent, (ii) that is
consummated not later than December 31, 2002, (iii) in respect of which the
value of the assets for all Permitted Sale and Leaseback Transactions does not
exceed $1,000,000 in the aggregate at any time and (iv) in respect of which no
Default or Unmatured Default shall have occurred and be continuing or would
result from such transaction or the incurrence of any Indebtedness in connection
therewith.
"PERSON" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"PLAN" means an employee benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
as to which the Borrower or any member of the Controlled Group may have
liability.
"PRICING SCHEDULE" means the Schedule identifying the Applicable Margin
and Applicable Commitment Fee Rate attached hereto and identified as such.
"PRIME RATE" means a rate per annum equal to the prime rate of interest
announced from time to time by LaSalle Bank or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.
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13
"PROPERTY" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"PRO RATA SHARE" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment at such time (in
each case, as adjusted from time to time in accordance with the provisions of
this Agreement) and the denominator of which is the Aggregate Commitment at such
time, or, if the Aggregate Commitment has been terminated, a fraction the
numerator of which is such Lender's Outstanding Credit Exposure at such time and
the denominator of which is the sum of the aggregate outstanding amount of all
Loans at such time.
"PURCHASERS" is defined in Section 12.3.1.
"PREFERRED STOCK" means, with respect to any corporation, capital stock
issued by such corporation that is entitled to a preference or priority over any
other capital stock issued by such corporation upon any distribution of such
corporation's assets, whether by dividend or upon liquidation.
"RATE MANAGEMENT OBLIGATIONS" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"RATE MANAGEMENT TRANSACTION" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between
the Borrower and any Lender or Affiliate thereof which is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"REDEEMABLE" means, with respect to any capital stock, Indebtedness or
other right or obligation, any such capital stock, Indebtedness or other right
or obligation that (a) the issuer has undertaken to redeem at a fixed or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the occurrence of a condition not solely within the control of the
issuer, or (b) is redeemable at the option of the holder.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks, non-banks and non-broker lenders for the purpose
of purchasing or carrying margin stocks applicable to member banks of the
Federal Reserve System.
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14
"REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"REPORTABLE EVENT" means a reportable event, as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation or
otherwise waived the requirement of Section 4043(a) of ERISA that it be notified
within thirty (30) days of the occurrence of such event, provided, however, that
a failure to meet the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"REQUIRED LENDERS" means Lenders in the aggregate having equal to or
greater than sixty-seven percent (67%) of the Aggregate Commitment or, if the
Aggregate Commitment has been terminated, Lenders in the aggregate holding equal
to or greater than sixty-seven percent (67%) of the Aggregate Outstanding Credit
Exposure.
"RESERVE REQUIREMENT" means the maximum aggregate reserve requirement
(including all basic supplemental, marginal and other reserves), stated as a
decimal, as prescribed by the Board of Governors of the Federal Reserve System
(or any successor) with respect to "Eurocurrency liabilities" or in respect of
any other category of liabilities which includes deposits by reference to which
the interest rate on LIBOR Rate Loans is determined or category of extensions of
credit or other assets which includes loans by a non-United States office of any
Lender to United States residents.
"RESTRICTED PAYMENTS" has the meaning set forth in Section 6.10.
"REVOLVING LOAN" means, with respect to a Lender, such Lender's loan
made pursuant to Article II (and any conversion or continuation thereof).
"RISK BASED CAPITAL GUIDELINES" is defined in Section 3.2.
"SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"S&P" means Standard and Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SCHEDULE" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
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15
"SENIOR NOTES" means the 8.60% Senior Notes due February 15, 2002
issued by the Borrower pursuant to the Senior Note Agreement, including any
notes issued in substitution thereof or exchange therefor pursuant to the Senior
Note Agreement, as such notes may be amended, supplemented or otherwise modified
from time to time.
"SENIOR NOTE DOCUMENTS" means the Senior Note Agreement and the Senior
Notes.
"SENIOR NOTE AGREEMENT" means the Note Agreement dated as of December
1, 1994 among the Borrower and the Purchasers named in Schedule I thereto, as
such agreement may be amended, supplemented or otherwise modified from time to
time.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SOLVENT" means, when used with respect to any Person, that at the time
of determination:
(i) the fair value of its assets (both at fair valuation and at
present fair saleable value) is equal to or in excess of the total amount of its
liabilities, including, without limitation, contingent liabilities;
(ii) it is then able and expects to be able to pay its debts as
they mature; and
(iii) it has capital sufficient to carry on its business as
conducted or as proposed to be conducted.
With respect to contingent liabilities (such as litigation, guarantees
and pension plan liabilities), such liabilities shall be computed at the amount
which, in light of all the facts and circumstances existing at the time,
represent the amount which can be reasonably be expected to become an actual or
matured liability.
"SUBSIDIARY" of a Person means (i) any corporation more than fifty
percent (50%) of the outstanding securities having ordinary voting power of
which shall at the time be owned or controlled, directly or indirectly, by such
Person or by one or more of its Subsidiaries or by such Person and one or more
of its Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more than fifty
percent (50%) of the ownership interests having ordinary voting power of which
shall at the time be so owned or controlled. Unless otherwise expressly
provided, all references herein to a "Subsidiary" shall mean a Subsidiary of the
Borrower.
"SUBSTANTIAL PORTION" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than ten
percent (10%) of the consolidated tangible assets of the Borrower and its
Subsidiaries as would be shown in the consolidated financial statements of the
Borrower and its Subsidiaries as at the end of the four fiscal quarter period
ending with the fiscal quarter immediately prior to the fiscal quarter in which
such determination is made, or (ii) is responsible for more than ten percent
(10%) of the Consolidated Net Income of the Borrower and its Subsidiaries as
reflected in the financial statements referred to in clause (i) above.
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"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"TRANSFEREE" is defined in Section 12.4.
"TYPE" means, with respect to any Advance, its nature as a Floating
Rate Advance or a LIBOR Advance.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"UNMATURED DEFAULT" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
Any accounting terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
Agreement Accounting Principles.
1.2. References. Any references to the Borrower's Subsidiaries
shall not in any way be construed as consent by the Administrative Agent or any
Lender to the establishment, maintenance or acquisition of and Subsidiary,
except as may otherwise be permitted hereunder.
1.3. Supplemental Disclosure. At any time at the request of the
Administrative Agent and at such additional times as the Borrower determines,
the Borrower shall supplement each schedule or representation herein or in the
other Loan Documents with respect to any matter hereafter arising which, if
existing or occurring at the date of this Agreement, would have been required to
be set forth as an exception to such representation or which is necessary to
correct any information in such representation which has been rendered
inaccurate thereby. Notwithstanding that any such supplement to such
representation may disclose the existence or occurrence of events, facts or
circumstances which are either prohibited by the terms of this Agreement or any
other Loan Documents or which result in the breach of any representation or
warranty, such supplement to such representation shall not be deemed either an
amendment thereof or a waiver of such breach unless expressly consented to in
writing by Administrative Agent and the requisite number of Lenders under
Section 8.2, and no such amendments, except
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as the same may be consented to in a writing which expressly includes a waiver,
shall be or be deemed a waiver by the Administrative Agent or any Lender of any
Default disclosed therein. Any items disclosed in any such supplemental
disclosures shall be included in the calculation of any limits, baskets or
similar restrictions contained in this Agreement or any of the other Loan
Documents.
ARTICLE II
THE CREDITS
2.1. Description of Facility; Commitment. From and including the
date of this Agreement and prior to the Commitment Termination Date, upon the
satisfaction of the conditions precedent set forth in Section 4.1 and 4.2, as
applicable, each Lender severally and not jointly agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower from time
to time in Dollars in amounts not to exceed in the aggregate at any one time
outstanding of its Pro Rata Share of the Available Aggregate Commitment;
provided that at no time shall the Aggregate Outstanding Credit Exposure
hereunder exceed the Aggregate Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Loans at any
time prior to the Commitment Termination Date. The Commitments to lend hereunder
shall expire automatically on the Commitment Termination Date. Principal
payments made after the Commitment Termination Date may not be reborrowed.
2.2. Required Payments; Termination Date.
2.2.1. Required Payments. This Agreement shall be effective until the
Commitment Termination Date or, if the Advances hereunder are converted to a
term loan pursuant to Section 2.2.3, until the Converted Loan Termination Date.
Any outstanding Advances and all other unpaid Obligations shall be paid in full
by the Borrower on the Commitment Termination Date, or, if the Advances
hereunder shall have been converted to a term loan pursuant to Section 2.2.3, in
accordance with the terms of Section 2.2.3.
2.2.2. Termination Date. Notwithstanding the termination of this
Agreement on the Commitment Termination Date or the Converted Loan Termination
Date, until all of the Obligations (other than contingent indemnity obligations)
shall have been fully paid and satisfied and all financing arrangements among
the Borrower and the Lenders hereunder and under the other Loan Documents shall
have been terminated, all of the rights and remedies under this Agreement and
the other Loan Documents shall survive.
2.2.3. Conversion to Term Loan. On the Conversion Date, the then
outstanding aggregate principal amount of the Advances hereunder shall convert
to a term loan. Upon such conversion, (i) the Borrower's option to borrow and
reborrow Revolving Loans hereunder shall terminate, (ii) the Aggregate
Commitment shall be reduced to zero and (iii) the aggregate principal balance of
all Loans hereunder shall be repaid in sixteen (16) consecutive equal
installments, payable on each Payment Date after the Conversion Date, commencing
on March 31, 2003 and continuing thereafter until the Converted Loan Termination
Date, in an amount equal to the Aggregate Outstanding Credit Exposure on the
Conversion Date divided by sixteen (16).
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2.3. Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.4. Types of Advances. The Advances may be Loans consisting of
Floating Rate Loans or LIBOR Loans, or a combination thereof, selected by the
Borrower in accordance with Sections 2.8 and 2.9.
2.5. Commitment Fee; Reductions in Aggregate Commitment.
2.5.1. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (the
"COMMITMENT FEE") at a per annum rate equal to the Applicable Commitment Fee
Rate on the daily unused portion of such Lender's Commitment from and including
the Closing Date to and including the Commitment Termination Date, payable
quarterly in arrears on each Payment Date hereafter and until all Obligations
hereunder have been paid in full.
2.5.2. Reductions in Aggregate Commitment. Prior to the Conversion
Date, the Borrower may permanently reduce the Aggregate Commitment in whole, or
in part ratably among the Lenders in a minimum amount of $500,000 (and in
multiples of $500,000 if in excess thereof), upon at least three (3) Business
Days' prior written notice to the Administrative Agent of such reduction, which
notice shall specify the amount of any such reduction; provided, however, that
the amount of the Aggregate Commitment may not be reduced below the Aggregate
Outstanding Credit Exposure. All accrued Commitment Fees shall be payable on the
effective date of any termination of all or any part of the obligations of the
Lenders to make Revolving Loans hereunder.
2.5.3. Increase of Aggregate Commitment. At any time prior to the
Commitment Termination Date, the Borrower may, on the terms set forth below,
request that the Aggregate Commitment hereunder be increased to an amount not to
exceed $30,000,000; provided, however, that (i) an increase in the Aggregate
Commitment hereunder may only be made at a time when no Default or Unmatured
Default shall have occurred and be continuing, (ii) each Lender shall be offered
a pro rata share of any requested increase prior to the Borrower and the
Administrative Agent inviting any additional financial institutions to become a
Lender hereunder, and (iii) no Lender's Commitment shall be increased under this
Section 2.5.3 without its consent. In the event of such a requested increase in
the Aggregate Commitment, any financial institution which the Borrower and the
Administrative Agent invite to become a Lender or to increase its Commitment may
set the amount of its Commitment at a level agreed to by the Borrower and the
Administrative Agent. In the event that the Borrower and one or more of the
Lenders (or other financial institutions) shall agree upon such an increase in
the Aggregate Commitment (i) the Borrower, the Administrative Agent and each
Lender or other financial institution increasing its Commitment or extending a
new Commitment shall enter into an amendment to this Agreement setting forth the
amounts of the Commitments, as so increased, providing that the financial
institutions extending new Commitments shall be Lenders for all purposes under
this Agreement, and setting forth such additional provisions as the
Administrative Agent shall consider reasonably appropriate and (ii) the Borrower
shall furnish, if requested, a new Note to each financial institution that is
extending a new Commitment or
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increasing its Commitment. No such amendment shall require the approval or
consent of any Lender whose Commitment is not being increased. Upon the
execution and delivery of such amendment as provided above, and upon
satisfaction of such other conditions as the Administrative Agent may reasonably
specify upon the request of the financial institutions that are extending new
Commitments (including, without limitation, the Administrative Agent
administering the reallocation of any outstanding Loans ratably among the
Lenders after giving effect to each such increase in the Aggregate Commitment,
and the delivery of certificates, evidence of corporate authority and legal
opinions on behalf of the Borrower), this Agreement shall be deemed to be
amended accordingly.
2.6. Minimum Amount of Each Advance. Each LIBOR Advance shall be in
the minimum amount of $500,000 (and in multiples of $500,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$500,000 (and in multiples of $500,000 if in excess thereof), provided, however,
that any Floating Rate Advance may be in the amount of the Available Aggregate
Commitment. The Borrower shall not request a LIBOR Advance if, after giving
effect to the requested LIBOR Advance, more than three (3) Interest Periods
would be in effect (unless such limit has been waived by the Administrative
Agent in its sole discretion).
2.7. Optional Principal Payments; Mandatory Principal Prepayments.
2.7.1. Optional Principal Payments. The Borrower may from time to
time pay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $500,000 or any integral multiple of
$100,000 in excess thereof, any portion of the outstanding Floating Rate
Advances, upon not less than two Business Days' prior notice to the
Administrative Agent. The Borrower may from time to time pay, subject to the
payment of any funding indemnification amounts required by Section 3.4 but
without penalty or premium, all outstanding LIBOR Advances, or, in a minimum
aggregate amount of $500,000 or any integral multiple of $500,000 in excess
thereof, any portion of the outstanding LIBOR Advances upon three Business Days'
prior notice to the Agent Principal payments made after the Commitment
Termination Date shall be applied to the principal installments payable under
Section 2.2 in the inverse order of maturity.
2.7.2. Mandatory Principal Prepayments. If at any time the Borrower
shall, or it shall permit any Subsidiary to, consummate any Asset Sale (other
than Asset Sales permitted under Sections 6.13(a)), the Borrower shall
immediately make a mandatory prepayment of the Obligations in an amount equal to
the Net Cash Proceeds, provided, however, that the Borrower shall be permitted
to retain (i) the first $1,000,000 of Net Cash Proceeds it receives from all
such Assets Sales which occur prior to the Converted Loan Termination Date and
(ii) $1,000,000 of Net Cash Proceeds it receives from all Permitted Sale and
Leaseback Transactions.
2.8. Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case of each
LIBOR Advance, the Interest Period applicable thereto from time to time. The
Borrower shall give the Administrative Agent irrevocable notice (a "BORROWING
NOTICE") not later than 12:00 noon (Chicago time) at least one (1) Business Day
before the Borrowing Date of each Floating Rate Advance and three (3)
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Business Days before the Borrowing Date for each LIBOR Advance. A Borrowing
Notice shall specify:
(a) the Borrowing Date, which shall be a Business Day, of
such Advance,
(b) the aggregate amount of such Advance,
(c) the Type of Advance selected, and
(d) in the case of each LIBOR Advance, the Interest
Period applicable thereto.
2.9. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into LIBOR Advances pursuant to this
Section 2.9 or are repaid in accordance with Section 2.7. Each LIBOR Advance
shall continue as a LIBOR Advance until the end of the then applicable Interest
Period therefor, at which time such LIBOR Advance shall be automatically
converted into a Floating Rate Advance unless (x) such LIBOR Advance is or was
repaid in accordance with Section 2.7, (y) the Borrower shall have given the
Administrative Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such LIBOR Advance continue
as a LIBOR Advance for the same or another Interest Period or (z) upon the
occurrence and during the continuance of any Default, each LIBOR Advance, may,
at the Required Lender's direction, on the last day of the then existing
Interest Period therefor, convert into a Floating Rate Advance and the
obligations of the Lenders to make, or to convert Floating Rate Advances into
LIBOR Rate Advances shall be suspended. Subject to the terms of Section 2.6, the
Borrower may elect from time to time to convert all or any part of a Floating
Rate Advance into a LIBOR Advance. Notwithstanding anything to the contrary
contained in this Section 2.9, no Advance may be converted or continued as a
LIBOR Advance (except with the consent of the Required Lenders) when any Default
or Unmatured Default has occurred and in continuing. The Borrower shall give the
Administrative Agent irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of
each conversion of a Floating Rate Advance into a LIBOR Advance or continuation
of a LIBOR Advance not later than 10:00 a.m. (Chicago time) at least three (3)
Business Days prior to the date of the requested conversion or continuation,
specifying:
(a) the requested date, which shall be a Business Day, of
such conversion or continuation,
(b) the aggregate amount and Type of the Advance which is
to be converted or continued, and
(c) the amount of such Advance which is to be converted
into or continued as a LIBOR Advance and the duration
of the Interest Period applicable thereto.
2.10. Interest Rates. Each Floating Rate Advance shall bear interest
on the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is automatically converted from a LIBOR Advance
into a Floating Rate Advance pursuant to Section 2.9, to but excluding the date
it is paid or is converted into a LIBOR Advance pursuant
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to Section 2.9 hereof, at a rate per annum equal to the Floating Rate for such
day. Changes in the rate of interest on that portion of any Advance maintained
as a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Each LIBOR Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the LIBOR Rate for such Interest Period. With respect to each
LIBOR Advance made prior to the Commitment Termination Date, the Interest Period
applicable thereto shall expire on or prior to the Commitment Termination Date.
On or after the Commitment Termination Date, the Borrower shall have the right
and option to convert each outstanding Floating Rate Advance to a LIBOR Advance
in accordance with Section 2.9. No Interest Period may end after the Converted
Loan Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to
the contrary contained in Section 2.8 or 2.9, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a LIBOR Advance. During
the continuance of a Default the Required Lenders may, at their option, by
notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each LIBOR Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum and (ii) each Floating Rate Advance and all fees and other Obligations
hereunder shall bear interest at a rate per annum equal to the Floating Rate in
effect from time to time plus 2% per annum, provided that, during the
continuance of a Default under Section 7.6 or 7.7, the interest rates set forth
in clauses (i) and (ii) above shall be applicable to all Advances and on any
accrued but unpaid fees and other Obligations without any election or action on
the part of the Administrative Agent or any Lender.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent's
address specified pursuant to Article XIII, or at any other Lending Office of
the Administrative Agent specified in writing by the Administrative Agent to the
Borrower, by 12:00 noon (Chicago time) on the date when due and shall be applied
ratably by the Administrative Agent among the Lenders entitled thereto. Each
payment delivered to the Administrative Agent for the account of any Lender
shall be delivered promptly by the Administrative Agent to such Lender in the
same type of funds that the Administrative Agent received at such Lender's
address specified pursuant to Article XIII or at any Lending Office specified in
a notice received by the Administrative Agent from such Lender. The
Administrative Agent is hereby authorized to charge the account of the Borrower
maintained with LaSalle Bank or any of its Affiliates for each payment of
principal, interest and fees as it becomes due hereunder.
2.13. Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan
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made by such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in which
it will record (a) the date and the amount of each Loan made hereunder, the Type
thereof and the Interest Period, if any, applicable thereto, (b) the amount of
any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder, (c) the effective date and amount of each
Assignment Agreement delivered to and accepted by it and the parties thereto
pursuant to Section 12.3, (d) the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof, and (e) all other appropriate debits and credits as provided in this
Agreement, including, without limitation, all fees, charges, expenses and
interest.
(iii) The entries maintained in the accounts maintained pursuant to
clauses (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Administrative Agent or any Lender to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Obligations in accordance with their terms.
(iv) Any Lender may request that the Loans made or to be made by it
be evidenced by a promissory note in substantially the form of Exhibit D (each,
a "Note"). In such event, the Borrower shall prepare, execute and deliver to
such Lender such Note or Notes payable to the order of such Lender. Thereafter,
the Loans evidenced by each such Note and interest thereon shall at all times
(including after any assignment pursuant to Section 12.3) be represented by one
or more Notes payable to the order of the payee named therein or any assignee
pursuant to Section 12.3, except to the extent that any such Lender or assignee
subsequently returns any such Note for cancellation and requests that such Loans
once again be evidenced as described in clauses (i) and (ii) above.
2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and transfer funds based on telephonic notices
made by any person or persons the Administrative Agent or any Lender in good
faith believes to be acting on behalf of the Borrower, it being understood that
the foregoing authorization is specifically intended to allow Borrowing Notices
and Conversion/Continuation Notices to be given telephonically. The Borrower
agrees to deliver promptly to the Administrative Agent a written confirmation,
signed by an Authorized Officer, of each telephonic notice signed by an
Authorized Officer. If the written confirmation differs in any material respect
from the action taken by the Administrative Agent and the Lenders, the records
of the Administrative Agent and the Lenders shall govern absent manifest error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable in arrears on each
Payment Date, commencing with the first such date to occur after the date
hereof, on any date on which the Floating Rate Advance is prepaid, whether due
to acceleration or otherwise, and at maturity. Interest accrued on that portion
of the outstanding principal amount of any Floating Rate Advance converted into
a LIBOR Advance on a day other than a Payment Date shall be payable on the next
succeeding Payment Date. Interest
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23
accrued on each LIBOR Advance shall be payable on the last day of its applicable
Interest Period, on any date on which the LIBOR Advance is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on each LIBOR
Advance having an Interest Period longer than three (3) months shall also be
payable on the last day of each three-month interval during such Interest
Period. Interest on all Advances and fees shall be calculated for actual days
elapsed on the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to 2:00 p.m. (Chicago time) at the place of payment. If any
payment of principal of or interest on an Advance, any fees or any other amounts
payable to the Administrative Agent or any Lender hereunder shall become due on
a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest, fees and commissions in
connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions; Availability of Loans. Promptly after receipt thereof,
the Administrative Agent will notify each Lender of the contents of each
Aggregate Commitment reduction notice, Borrowing Notice, Conversion/Continuation
Notice, and repayment notice received by it hereunder. The Administrative Agent
will notify each Lender of the interest rate applicable to each LIBOR Advance
promptly upon determination of such interest rate and will give each Lender
prompt notice of each change in the Alternate Base Rate. Not later than 12:00
noon (Chicago time) on each Borrowing Date, each Lender shall make available its
Loans in funds immediately available in Chicago to the Administrative Agent at
its address specified pursuant to Article XIII. Unless the Administrative Agent
determines that any applicable condition specified in Article IV has not been
satisfied, the Administrative Agent will make the funds so received from the
Lenders available to the Borrower at the Administrative Agent's aforesaid
address.
2.17. Lending Offices. Each Lender may book its Loans at any Lending
Office selected by such Lender and may change its Lending Office from time to
time. All terms of this Agreement shall apply to any such Lending Office and the
Loans and any Notes issued hereunder shall be deemed held by each Lender for the
benefit of any such Lending Office. Each Lender may, by written notice to the
Administrative Agent and the Borrower in accordance with Article XIII, designate
replacement or additional Lending Offices through which Loans will be made by it
and for whose account Loan payments are to be made.
2.18. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the time on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the
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Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (x) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day for the first three (3) days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan,
including the interest rate applicable pursuant to Section 2.11.
2.19. Replacement of Lender. The Borrower shall have the right, in
its sole discretion, at any time and from time to time to terminate or replace
the Commitment of any Lender (an "AFFECTED LENDER"), in whole, upon at least
thirty (30) days' prior notice to the Administrative Agent and such Lender, (a)
if such Lender has failed or refused to make available the full amount of any
Loan as required by its Commitment hereunder, (b) if such Lender has been merged
or consolidated with, or transferred all or substantially all of its assets to,
or otherwise been acquired by any other Person, or (c) if such Lender has
demanded that the Borrower make any additional payment to any Lender pursuant to
Section 3.1, 3.2 or 3.5, or if such Lender's obligation to make or continue, or
convert Floating Rate Advances into, LIBOR Advances has been suspended pursuant
to Section 3.3, provided, however that no such Commitment reduction shall reduce
the Aggregate Commitment by more than fifteen percent (15%) thereof; provided
further, that no Default or Unmatured Default shall have occurred and be
continuing at the time of such termination or replacement, and that,
concurrently with such termination or replacement, (i) if the Affected Lender is
being replaced, another bank or other entity which is reasonably satisfactory to
the Borrower and the Administrative Agent shall agree, as of such date, to
purchase for cash the Advances and other Obligations due to the Affected Lender
pursuant to an Assignment Agreement substantially in the form of Exhibit C and
to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in immediately available funds on
the day of such replacement (A) all interest, fees and other amounts then
accrued but unpaid to such Affected Lender by the Borrower hereunder to and
including the date of termination, including without limitation payments due to
such Affected Lender under Sections 3.1, 3.2 and 3.5, to the extent applicable,
and (B) an amount, if any, equal to the payment which would have been due to
such Lender on the day of such replacement under Section 3.4 had the Loans of
such Affected Lender been prepaid on such date rather than sold to the
replacement Lender and (iii) if the Affected Lender is being terminated, the
Borrower shall pay to such Affected Lender all of Obligation due to such
Affected Lender (including amounts described in the immediately preceding
clauses (i) and (ii) plus the outstanding principal balance of such Lender's
Loans).
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement,
the adoption of any law or any governmental or quasi-governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law), or any change in any such law, rule, regulation, policy, guideline or
directive or in the interpretation or administration thereof by any governmental
or quasi-governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender or
applicable Lending Office with any
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25
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) subjects any Lender or any applicable Lending Office to any
Taxes, or changes the basis of taxation of payments (other
than with respect to Excluded Taxes) to any Lender in respect
of its LIBOR Loans, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending Office (other than reserves and assessments
taken into account in determining the interest rate applicable
to LIBOR Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Office of
making, funding or maintaining its Commitment or LIBOR Loans
or reduces any amount receivable by any Lender or any
applicable Lending Office in connection with its Commitment or
LIBOR Loans, or requires any Lender or any applicable Lending
Office to make any payment calculated by reference to the
amount of Commitment or LIBOR Loans held or interest received
by it, by an amount deemed material by such Lender,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Office of making or maintaining its LIBOR Loans or Commitment
or to reduce the return received by such Lender or applicable Lending Office in
connection with such LIBOR Loans or Commitment, then, within fifteen (15) days
of demand by such Lender, the Borrower shall pay such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction in amount received, provided however, such Lender shall only be
entitled to receive compensation from the Borrower for such increased costs for
a period of 90 days prior to the date such Lender made a demand for payment of
such increased costs plus such increased costs that accrue after the date of
such demand by such Lender, except that with respect to any retroactive change
in any law, rule, regulation, policy, guideline or directive giving rise to
increased costs to any such Lender, the Borrower shall pay such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in amount received for the period from and including the
effective date of such retroactive change.
3.2. Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Office of such Lender or any corporation controlling such
Lender is increased as a result of a Change, then, within fifteen (15) days of
demand by such Lender, the Borrower shall pay such Lender the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender determines is attributable to this
Agreement, its Loans or its Commitment to make Loans hereunder (after taking
into account such Lender's policies as to capital adequacy) provided however,
such Lender shall only be entitled to receive compensation from the Borrower for
such shortfall for a period of 90 days prior to the date such Lender made a
demand for payment of such shortfall plus such additional shortfalls that accrue
after the date of such demand by such Lender, provided that if such Change has a
retroactive effect, then the
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26
Lender shall be entitled to receive compensation from the Borrower for such
shortfall for the period from and including the effective date of such
retroactive Change. "CHANGE" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of, change
in, or change in the interpretation or administration of any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Office or any corporation
controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3. Availability of Types of Advances. If (x) any Lender
determines that maintenance of its LIBOR Loans at a suitable Lending Office
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or if (y) the Required Lenders determine that (i)
deposits of a type and maturity appropriate to match fund LIBOR Advances are not
available or (ii) the interest rate applicable to LIBOR Advances does not
accurately reflect the cost of making or maintaining LIBOR Advances, then the
Administrative Agent shall suspend the availability of LIBOR Advances and
require any affected LIBOR Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a LIBOR Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a LIBOR Advance is
not made on the date specified by the Borrower for any reason other than default
by the Lenders, or a LIBOR Advance is not prepaid on the date specified by the
Borrower for any reason, the Borrower will indemnify each Lender for any actual
and verifiable loss or cost incurred by it resulting therefrom, including,
without limitation, any actual and verifiable loss or cost in liquidating or
employing deposits acquired to fund or maintain such LIBOR Advance.
3.5. Taxes.
(i) All payments by the Borrower to or for the account of any
Lender or Administrative Agent hereunder or under any Note shall be made free
and clear of and without deduction for any and all Taxes. If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or Administrative Agent, (a) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.5) such
Lender or Administrative Agent (as the case may be) receives an amount equal to
the sum it would have received had no such deductions been made, (b) the
Borrower shall make such deductions, (c) the Borrower shall pay the full amount
deducted to the relevant authority in accordance with applicable law and (d) the
Borrower shall furnish to the Administrative Agent the original copy of a
receipt evidencing payment thereof within thirty (30) days after such payment is
made.
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27
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note other than any of the foregoing which constitute
Excluded Taxes ("OTHER TAXES").
(iii) The Borrower hereby agrees to indemnify the Administrative
Agent and each Lender for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on amounts payable under
this Section 3.5) paid by the Administrative Agent or such Lender and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto. Payments due under this indemnification shall be made within
thirty (30) days of the date the Administrative Agent or such Lender makes
demand therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof (each a "NON-U.S. LENDER") agrees
that it will, not more than ten (10) Business Days after the date on which it
becomes a party to this Agreement, (i) deliver to each of the Borrower and the
Administrative Agent two (2) duly completed copies of United States Internal
Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) deliver to each
of the Borrower and the Administrative Agent a United States Internal Revenue
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Lender
further undertakes to deliver to each of the Borrower and the Administrative
Agent (x) renewals or additional copies of such form (or any successor form) on
or before the date that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, such additional forms or amendments thereto as may be reasonably
requested by the Borrower or the Administrative Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form or amendment with respect to it and such Lender
advises the Borrower and the Administrative Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause (iv), above
(unless such failure is due to a change in treaty, law or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, occurring subsequent to the date on which a form originally was
required to be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Lender which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (iv), above, the
Borrower shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.
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28
(vi) Any Lender that is entitled to an exemption from or reduction
of withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Administrative Agent did not properly withhold
tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because such Lender
failed to notify the Administrative Agent of a change in circumstances which
rendered its exemption from withholding ineffective, or for any other reason),
such Lender shall indemnify the Administrative Agent fully for all amounts paid,
directly or indirectly, by the Administrative Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Administrative Agent under
this subsection, together with all costs and expenses related thereto (including
attorneys' fees and time charges of attorneys for the Administrative Agent,
which attorneys may be employees of the Administrative Agent). The obligations
of the Lenders under this Section 3.5(vii) shall survive the payment of the
Obligations and termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending Office
with respect to its Loans to reduce any liability of the Borrower to such Lender
under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of LIBOR Advances
under Section 3.3, so long as such designation is not, in the judgment of such
Lender, materially disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4
or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined the actual amount of its loss or
additional cost, and such calculation shall be final, conclusive and binding on
the Borrower in the absence of manifest error. Unless otherwise provided herein,
the amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrower of such written statement. The obligations
of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder unless (a) the representations and warranties
contained in Article V are true and correct as of such date and (b) the Borrower
or the applicable Guarantor has furnished to the Administrative Agent with
sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of the
Borrower and each of the initial Guarantors, together with all
amendments thereto, and a certificate of
SIDLEY XXXXXX XXXXX & XXXX
29
good standing, each certified by the appropriate governmental
officer in its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of
the Borrower and each of the initial Guarantors, of their
respective articles of incorporation, together with all
amendments thereto, their respective by-laws and of their
respective Board of Directors' resolutions and of resolutions
or actions of any other body authorizing the execution of the
Loan Documents to which it is a party.
(iii) Incumbency certificates, executed by the Secretary or
Assistant Secretary of the Borrower and each of the initial
Guarantors, which shall identify by name and title and bear
the signatures of the Authorized Officers and any other
officers or employees of the Borrower and each of the initial
Guarantors, respectively, authorized to sign the Loan
Documents to which it is a party and, with respect to the
Borrower, to request Loans hereunder, upon which certificates
the Administrative Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower
or the applicable Guarantor.
(iv) An opening compliance certificate in substantially the form of
Exhibit B, signed by the chief financial officer or treasurer
of the Borrower, showing the calculations necessary to
determine compliance with this Agreement on the Closing Date
and stating that on the Closing Date (a) no Default or
Unmatured Default has occurred and is continuing, (b) all of
the representations and warranties in Article V shall be true
and correct as of such date, and (c) no material adverse
change in the business, financial condition, operations or
prospects of the Borrower has occurred since December 31,
2000.
(v) A written opinion of the Borrower's counsel, in form and
substance satisfactory to the Administrative Agent and
addressed to the Lenders, in substantially the form of Exhibit
A.
(vi) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(vii) Such other documents as any Lender or its counsel may have
reasonably requested including, without limitation, each other
document identified on the list of closing documents attached
hereto as Exhibit F.
4.2. Each Advance. The Lenders shall not be required to make any
Advance unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are
true and correct as of such Borrowing Date except to the
extent any such representation or warranty is stated to relate
solely to an earlier date, in which case such representation
or warranty shall have been true and correct on and as of such
earlier date.
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30
(iii) All legal matters incident to the making of such Advance shall
be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Section 4.2(i) and (ii) have been satisfied. Any Lender may require
a duly completed compliance certificate in substantially the form of Exhibit B
as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows to each Lender and the
Administrative Agent as of the Closing Date, on the date of the initial
Revolving Loans hereunder (if different from the Closing Date) and thereafter on
each date as required by Section 4.2:
5.1. Existence and Standing. The Borrower and each of its
Subsidiaries is a corporation, partnership or limited liability company duly and
properly incorporated or organized, as the case may be, validly existing and in
good standing under the laws of its jurisdiction of incorporation or
organization and is properly qualified and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except to the extent that the failure to have such authority could not
reasonably be expected to have a Material Adverse Effect.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents and the consummation of the transactions contemplated
thereby and the performance of its obligations thereunder have been duly
authorized by the Board of Directors or similar corporate proceedings and no
other corporate proceedings are necessary to consummate such transactions, and
the Loan Documents to which the Borrower is a party constitute legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3. No Conflict; Government Consent. Neither the execution,
delivery and performance by the Borrower of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any of its
Subsidiaries or (ii) the Borrower's or any Subsidiary's articles or certificate
of incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating agreement or other management
agreement, as the case may be, or (iii) the provisions of any material
Contractual Obligations, to which the Borrower or any of its Subsidiaries is a
party or is subject, or by which it, or its Property, is bound, or conflict
with, or constitute a default under, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of the Borrower or a Subsidiary
pursuant to the terms of, any material Contractual Obligation. The execution,
delivery and performance of the Loan Documents and the
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31
consummation of the transactions contemplated thereby do not and will not
require any approval of shareholders or any approval or consent of any Person
under Contractual Obligations. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental or public
body or authority, or any subdivision thereof, which has not been obtained by
the Borrower or any of its Subsidiaries, is required to be obtained by the
Borrower or any of its Subsidiaries in connection with the execution and
delivery of the Loan Documents, the borrowings under this Agreement, the payment
and performance by the Borrower of the Obligations or the legality, validity,
binding effect or enforceability of any of the Loan Documents.
5.4. Financial Statements. The December 31, 2000 consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Administrative Agent and the Lenders, copies of which are included in the
Borrower's 2000 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
as filed with the Securities and Exchange Commission, were prepared in
accordance with generally accepted accounting principles in effect on the date
such statements were prepared and fairly present, the consolidated financial
condition and operations of the Borrower and its Subsidiaries at such date and
the consolidated results of their operations and cash flows for the fiscal year
then ended.
5.5. Material Adverse Change; No Default. Since December 31, 2000
there has been no Material Adverse Change. Neither the Borrower nor any
Subsidiary is a party to, or is otherwise subject to, any Contractual Obligation
or other restriction contained in there respective charters, bylaws or similar
governing documents, which has had a Material Adverse Effect. There exists no
Default or Unmatured Default.
5.6. Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles.
The United States income tax returns of the Borrower and its Subsidiaries have
been audited by the Internal Revenue Service through the fiscal year ended
December 31, 1997. No tax liens have been filed and no claims are being asserted
with respect to any such taxes. The charges, accruals and reserves on the books
of the Borrower and its Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending, at law
or in equity, or, to the knowledge of any of their officers, threatened against
or affecting the Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect or which seeks to prevent, enjoin or
delay the making of any Loans or otherwise question the validity of any Loan
Document. Neither the Borrower nor any of its Subsidiaries is subject to or in
default with respect to any final judgement, writ, order, injunction, decree,
rule or regulation of any court or Governmental Authority which has had or is
reasonably likely to have a Material Adverse Effect. Other than any liability
incident to any litigation, arbitration or proceeding which could not reasonably
be expected to have a Material Adverse Effect, neither the Borrower
SIDLEY XXXXXX XXXXX & XXXX
32
nor any of its Subsidiaries have any contingent obligations not provided for or
disclosed in the financial statements referred to in Section 5.4.
5.8. Subsidiaries. Schedule 4 (as supplemented from time to time by
the Borrower promptly after the formation or acquisition of any new Subsidiary,
except as permitted under this Agreement) contains a complete and accurate list
of all Subsidiaries of the Borrower as of the date of this Agreement, setting
forth their correct legal name and respective jurisdictions of organization and
the number of issued and authorized shares of each class of capital stock of
each such Subsidiary and the identity of the holders of all shares of each class
of capital stock of each Subsidiary and the percentage ownership interests owned
by each such holder. All of the issued and outstanding shares of capital stock
or other ownership interests of such Subsidiaries have been duly authorized and
issued and are fully paid and non-assessable. No Person other than the Borrower
or a Subsidiary holds or otherwise possesses any warrant, right or option to
purchase or otherwise acquire stock or other securities convertible into capital
stock of any Subsidiary. None of the direct or indirect Subsidiaries of the
Borrower (other than any Subsidiary that shall have become a guarantor of the
Obligations in accordance with Section 6.20), individually or taken as a whole,
constitute a Material Subsidiary.
5.9. Accuracy of Information. None of the schedules, certificates
and other written statements and materials and information furnished by or on
behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or
the Lenders (in each case, unless corrected in writing in this Agreement or in a
written statement delivered to the Administrative Agent and the Lenders prior to
the date of the execution hereof by the Borrower) contain any material
misstatement of fact or omit to state a material fact necessary in order to make
the statements contained therein, in light of the circumstances under which they
were made and taken as a whole, not misleading. There is no fact relating to the
Borrower or any of its Subsidiaries which the Borrower has not disclosed to the
Administrative Agent and the Lenders in writing which has had or is reasonably
likely to have a Material Adverse Effect.
5.10. Regulation U. Neither the Borrower nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose, whether immediate, incidental or ultimate
of buying or carrying margin stock (within the meaning of Regulation U or
Regulation X); and after applying the proceeds of each Advance, margin stock (as
defined in Regulation U) constitutes less than twenty-five (25%) of the value of
those assets of the Borrower and its Subsidiaries which are subject to any
limitation on sale or pledge, or any other restriction hereunder.
5.11. Material Agreements. Neither the Borrower nor any Subsidiary
is in default and no conditions exist which, with the giving of notice or lapse
of time, or both, would constitute a default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement to which it is a party, which default could reasonably be expected to
have a Material Adverse Effect.
5.12. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property.
SIDLEY XXXXXX XXXXX & XXXX
33
5.13. Ownership of Properties. On the date of this Agreement, the
Borrower and its Subsidiaries have good and marketable title, free of all Liens
other than those permitted by Section 6.16, to all of the Property and assets
reflected in the Borrower's most recent consolidated financial statements
provided to the Administrative Agent and the Lenders as owned by the Borrower
and its Subsidiaries, other than Property and assets sold or otherwise disposed
of in the ordinary course of business.
5.14. ERISA; Foreign Pension Matters. The sum of (a) the Unfunded
Liabilities of all Plans and (b) the present value of the aggregate unfunded
liabilities to provide the accrued benefits under all Foreign Pension Plans do
not in the aggregate exceed an amount equal to the sum of (i) ten percent (10%)
of the value (as of any date of determination) of all Plan assets allocable to
Plan benefits guaranteed by ERISA and (ii) ten percent (10%) of the fair market
value of the assets held in trust or other funding vehicles for accrued benefits
under all Foreign Pension Plans. Each Plan and each Foreign Pension Plan
complies in all material respects with all applicable requirements of law and
regulations, no Reportable Event has occurred with respect to any Plan, neither
the Borrower nor any other member of the Controlled Group has withdrawn from any
Multiemployer Plan or initiated steps to do so, and no steps have been taken to
terminate any Plan.
5.15. Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and, to the knowledge of the Borrower, neither the execution
of this Agreement nor the making of Loans hereunder gives rise to a prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of the
Code.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
and its Subsidiaries due to Environmental Laws. On the basis of this
consideration, the Borrower has concluded that Environmental Laws cannot
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any Subsidiary has received any notice to the effect that its operations are
not in compliance with any of the requirements of applicable Environmental Laws
or are the subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or remedial action
could reasonably be expected to have a Material Adverse Effect.
5.17. Investment Company Act: Other Regulation. Neither the Borrower
nor any Subsidiary is (i) an "investment company" or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended or (ii) subject to regulation under any other federal or state
regulatory scheme such that its ability to incur Indebtedness is limited or its
ability to consummate the transactions contemplated hereby is impaired.
SIDLEY XXXXXX XXXXX & XXXX
34
5.18. Indebtedness. Set forth on Schedule 2 hereto is a complete and
accurate list of all Indebtedness existing as of the Closing Date, showing as of
the date hereof the principal amount outstanding thereunder.
5.19. Insurance. The Property of the Borrower and its Subsidiaries
is insured with financially sound and reputable insurance companies not
Affiliates of the Borrower, in such amounts, with such deductibles and covering
such risks as are customarily carried by companies engaged in similar business
and owning similar properties.
5.20. Solvency. After giving effect to the Advances to be made on
the Closing Date, or such other Advances requested hereunder are made, the
Borrower and its Subsidiaries taken as a whole are Solvent.
5.21. Permits; Intellectual Property. The Borrower and each of its
Subsidiaries own, are licensed or otherwise have the lawful right to use, or
have all permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of their businesses as currently conducted which are material to
their condition (financial or otherwise), operations, performance and prospects,
taken as a whole. The use of such permits and other governmental approvals,
patents, trademarks, trade names, copyrights, technology, know-how and processes
by the Borrower and each of its Subsidiaries does not infringe on the rights of
any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of the Borrower or any of its
Subsidiaries which has or is reasonably likely to have a Material Adverse
Effect.
5.22. Labor Matters. There are no collective bargaining agreements
or other labor agreements covering any of the employees of the Borrower or any
of its Subsidiaries. No attempt to organize the employees of the Borrower, and
no labor disputes, strikes or walkouts affecting the operations of the Borrower
or any of its Subsidiaries, is pending, or, to the Borrower's knowledge,
threatened, planned or contemplated.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself
and each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Administrative Agent and the Lenders:
(a) Annual Financials. As soon as available and in any event
within 90 days after the close of each Fiscal Year of the Borrower, copies of
(i) Consolidated balance sheets of the Borrower and its Subsidiaries as of the
close of such Fiscal Year, and (ii) Consolidated statements of operations,
shareholders' equity and cash flows of the Borrower and its Subsidiaries for
such Fiscal Year, in each case setting forth the comparative form the
Consolidated figures for the preceding Fiscal Year. Such Consolidated financial
statements shall be accompanied by an audit report, and unqualified opinion,
thereon of KPMG Peat Marwick
SIDLEY XXXXXX XXXXX & XXXX
35
LLP or other firm of independent auditors of recognized national standing
selected by the Borrower to the effect that such consolidated financial
statements present fairly, in all material respects, the Consolidated financial
position of the Borrower and its Subsidiaries as of the end of the Fiscal Year
being reported on and the Consolidated results of the operations, shareholders'
equity and cash flows for said year in conformity with Agreement Accounting
Principles and that the examination of such auditors in connection with such
financial statements has been conducted in accordance with generally accepted
auditing standards and included such tests of the accounting records and such
other auditing procedures as said auditors deemed necessary in the
circumstances. Such audit reports shall be accompanied by a reliance letter from
the independent auditors permitting the Administrative Agent and the Lenders to
rely on the contents thereof as if prepared specifically for use by the
Administrative Agent and the Lenders.
(b) Quarterly Financials. As soon as available and in any event
within 45 days after the end of each of the first three Fiscal Quarters of each
Fiscal Year, copies of (i) unaudited condensed Consolidated balance sheets of
the Borrower and its Subsidiaries as of the close of such Fiscal Quarter,
setting forth in comparative form the consolidated figures as of the close of
the Fiscal Year then most recently ended, and (ii) unaudited condensed
Consolidated statements of operations, shareholders' equity and cash flow of the
Borrower and its Subsidiaries for such Fiscal Quarter and for the portion of the
Fiscal Year ending with such Fiscal Quarter, in each case setting forth in
comparative form the unaudited condensed Consolidated figures for the
corresponding periods of the preceding Fiscal Year, in each case certified by an
authorized financial officer of the Borrower as presenting fairly the financial
position of the Borrower and its Subsidiaries as of such date and the results of
their operations and changes in their cash flows for such period.
(c) Compliance Certificate. Together with the financial statements
required under Sections 6.1(a) and (b), a compliance certificate in
substantially the form of Exhibit B signed by its chief financial officer
showing the calculations necessary to determine compliance with this Agreement
as of the applicable date of determination for such covenant, as the case may
be, and stating that no Default or Unmatured Default exists, or if any Default
or Unmatured Default exists, stating the nature and status thereof and whether
any Subsidiary has been formed or acquired during the Fiscal Quarter ending as
of the date of such financial statements.
(d) Budgets; Business Plans; Financial Projections. As soon as
practicable and in any event not later than thirty (30) days after the beginning
of each fiscal year commencing with the fiscal year beginning January 1, 2003, a
copy of the plan and forecast (including a projected balance sheet, income
statement and a statement of cash flow) of the Borrower and its Subsidiaries for
the upcoming three (3) fiscal years prepared in such detail as shall be
reasonably satisfactory to the Administrative Agent.
(e) Plan Statements. Within 270 days after the close of each plan
year, a statement of the Unfunded Liabilities of each Plan, certified as correct
by an actuary enrolled under ERISA.
(f) Reportable Events. As soon as possible and in any event within
10 days after the Borrower knows that any Reportable Event has occurred with
respect to any Plan or any material unfunded liability has arisen with respect
to a Foreign Pension Plan, a statement, signed by the
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36
chief financial officer of the Borrower, describing said Reportable Event or
material unfunded liability and the action which the Borrower proposes to take
with respect thereto.
(g) Environmental Notices. As soon as possible and in any event
within 10 days after receipt by the Borrower, a copy of (a) any notice or claim
to the effect that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or substance
into the environment, and (b) any notice alleging any violation of any federal,
state or local environmental, health or safety law or regulation by the Borrower
or any of its Subsidiaries.
(h) SEC and Other Reports. Promptly upon their becoming available,
one copy of each (i) financial statements, report, notice or proxy statement
sent by the Borrower to its stockholders generally, and each press release made
available generally by the Borrower to the public concerning material
developments in the business of the Borrower, and each notification on Schedule
13-D received by the Borrower pursuant to the Securities Exchange Act and the
rules promulgated thereunder evidencing an increase in ownership of the
Borrower's capital stock of 5% or more, and (ii) regular or periodic report and
any registration statement or prospectus filed by the Borrower or any Subsidiary
with any securities exchange or the Securities and Exchange Commission or any
successor agency.
(i) Management Letters. Promptly upon receipt thereof, one copy of
each management letter to the Audit Committee of its Board of Directors from its
independent auditors.
(j) Auditors' Certificates. Within the period provided in Section
6.1(a), a certificate of the auditors who render an opinion with respect to such
financial statements, which certificate shall be addressed to the Borrower, the
Administrative Agent and the Lenders, stating that they have reviewed this
Agreement; stating whether, in making their audit, such auditors have become
aware of any Default or Event or Default under any of the terms or provisions of
this Agreement insofar as any such terms or provisions pertain to or involve
accounting matters or determinations, and if any such condition or event then
exists, specifying the nature and period of existence thereof.
(k) Creditor Reports. Promptly after the furnishing thereof,
copies of any notice or any other material statement or report furnished to any
holder of the securities of the Borrower or of any of its Subsidiaries pursuant
to the terms of any indenture, loan or credit or similar agreement relating to
Indebtedness in excess of $1,000,000 and not otherwise required to be furnished
to the Administrative Agent and the Lenders pursuant to any other clause of this
Section 6.1.
(l) Other Information. Such other information (including
non-financial information) as the Administrative Agent or any Lender may from
time to time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each
Subsidiary to, use the proceeds of the Advances for working capital
requirements, general corporate purposes and refinancing the Senior Notes. The
Borrower will not, nor will it permit any Subsidiary to, use
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37
any of the proceeds of the Advances to purchase or carry any "margin stock" (as
defined in Regulation U) or to make any other acquisition, except Permitted
Acquisitions.
6.3. Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect
and specifying what action the Borrower has taken, is taking or proposes to take
with respect thereto.
6.4. Conduct of Business; Charter Amendments; Accounting Changes.
6.4.1. Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted (which business is the acquisition, repair, dismantling or disposition
of motor vehicles (or parts thereof), whether on behalf of itself or others, or
the provision of services or information to others with respect to the
acquisition, repair, dismantling or disposition of motor vehicles (or parts
thereof)) and do all things necessary to remain duly incorporated or organized,
validly existing and in good standing as a domestic corporation in its
jurisdiction of incorporation or organization, as the case may be, and maintain
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted and preserve and keep in full force and effect all
licenses, permits, rights and franchise materials to conduct its business as
currently conducted, the failure of which to obtain or maintain, would have a
Material Adverse Effect.
6.4.2. Charter Amendments. The Borrower will not adopt and will not
permit any Subsidiary to adopt, any amendment to the certificate of
incorporation or bylaws of the Borrower or any of its Subsidiaries, other than
any amendment which could not impair the rights or interests of the
Administrative Agent and the Lenders.
6.4.3. Accounting Changes. The Borrower will not make or permit, or
permit any of its Subsidiaries to make or permit, any change in accounting
policies or reporting practices, except as required or permitted by Agreement
Accounting Principles subject to Section 9.8 hereof.
6.5. Taxes; Claims, Judgments, Etc. The Borrower will, and will
cause each of its Subsidiaries to file on timely basis complete and correct
United States federal and applicable foreign, state and local tax returns
required by law. The Borrower will promptly pay and discharge, and will cause
each of its Subsidiaries promptly to pay and discharge, all lawful taxes,
assessments and governmental charges or levies imposed upon the Borrower or such
Subsidiary, respectively, or upon or in respect of all or any part of the
property or business of the Borrower or such Subsidiary, all trade accounts
payable in accordance with usual and customary business terms, and all judgments
and claims which if unpaid might become a Lien upon any property of the Borrower
or such Subsidiary; provided that neither the Borrower nor any such Subsidiary
shall be required to pay any such tax, assessment, charge, levy or account
payable, judgment or claim if (i) the validity, applicability or amount thereof
is being contested in good faith by appropriate actions or proceedings promptly
instituted and diligently conducted which will prevent the forfeiture or sale of
any property of the Borrower or such Subsidiary or any material interference
with the use thereof by the Borrower or such Subsidiary in either case, for the
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duration of such action or proceeding, and (ii) the Borrower or such Subsidiary
shall set aside on its books reserves in conformity with Agreement Accounting
Principles deemed by it to be adequate with respect thereto.
6.6. Insurance. The Borrower will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts and covering such risks as is consistent
with sound business practice, and the Borrower will furnish to any
Administrative Agent and the Lenders upon request full information as to the
insurance carried. Upon the request of the Administrative Agent, the Borrower
shall deliver to the Administrative Agent and the Lenders, at reasonable
intervals (but no more frequently than once in any twelve-month period with
respect to any particular coverage), a certificate signed by a Authorized
Officer of the Borrower setting forth the nature and extent of all insurance
maintained by the Borrower and each Subsidiary in accordance with this Section
6.6 and attaching thereto a certificate of insurance with respect to all such
insurance.
6.7. Compliance with Laws. Promptly comply and cause each of its
Subsidiaries to comply, with all laws, ordinances or governmental rules and
regulations, orders, writs, judgments, injunctions, decrees and awards to which
it is subject including, without limitation, ERISA and all Environmental Laws in
all applicable jurisdictions, the violation of which could reasonably be
expected to materially adversely affect the properties, business or condition
(financial or otherwise), operations or prospects of the Borrower or any
Subsidiary, or could reasonably be expected to result in the creation of any
Lien on any property of the Borrower or any Subsidiary; provided that neither
the Borrower nor any such Subsidiary shall be required to comply with any such
law, ordinance, rule or regulation, the applicability of which is being
contested in good faith by appropriate actions or proceedings promptly
instituted and diligently conducted which will prevent the forfeiture or sale of
any property of the Borrower or such Subsidiary or any material interference
with the use thereof by the Borrower or such Subsidiary in either case, for the
duration of such action or proceeding.
6.8. Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, keep and cause each of its Subsidiaries to keep proper books
of record and account in which full and correct entries will be made of all
dealings or transactions of, or in relation to, the business and affairs of the
Borrower or such Subsidiary, in accordance with Agreement Accounting Principles
consistently applied (except for changes disclosed in the financial statements
furnished pursuant to this Agreement and concurred in by the independent
auditors referred to in Section 6.1(j) hereof), and permit the Administrative
Agent and any Lender, or their respective representatives and agents, to visit
and inspect, under the Borrower's guidance, any of the properties of the
Borrower or any of its Subsidiaries, to examine all of their books of account,
records, reports and other papers, to make copies and extracts therefrom and to
discuss their respective affairs, finances and accounts with their respective
officers, employees, and, if there shall have occurred and be continuing a
Default, independent auditors (and by this provision the Borrower authorizes
said auditors to discuss the finances and finances and affairs of the Borrower
and its Subsidiaries) all at such reasonable times and as often as may be
reasonably requested; provided that no such inspection or examination shall
unreasonably interfere with the business of the Borrower. Following the
occurrence and continuance of any Default, the Borrower shall bear the expense
of any such inspection or examination.
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6.9. Further Assurances. At any time and from time to time, the
Borrower agrees that the Borrower will cooperate with the Administrative Agent
and the Lenders and will execute and deliver, or cause to be executed and
delivered, all such further instruments and documents, and will take all such
further actions, as the Administrative Agent or any Lender may reasonably
request in order to carry out the provisions and purposes of this Agreement or
any other Loan Document.
6.10. Restricted Payments. The Borrower will not, nor will it permit
any Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding (each a "RESTRICTED PAYMENT"), except that (i) any Subsidiary may
declare and pay dividends or make distributions to the Borrower or to a
Wholly-Owned Subsidiary, and (ii) the Borrower may declare or pay dividends or
make distributions or redeem, repurchase or otherwise acquire or retire any of
its capital stock at any time outstanding in an amount in the aggregate, not to
exceed twenty-five percent (25%) of Consolidated Net Income (if positive) earned
in each fiscal quarter beginning with the fiscal quarter ending June 30, 2002
through the last day of the fiscal quarter immediately preceding the date such
Restricted Payment is made; provided however that before and after giving effect
to such Restricted Payment, the Borrower and its Subsidiaries shall be in
compliance with the financial covenants contained in Section 6.19, provided,
further, however, that for the purposes of determining compliance with this
Section 6.10, the Consolidated Fixed Charge Coverage Ratio shall not be less
than 1.45 to 1.0 at any time (calculated as of the last day of the fiscal
quarter immediately preceding such Restricted Payment as if such Restricted
Payment had been made on such prior date) and no Default or Unmatured Default
shall have occurred and be continuing or would result from such Restricted
Payment.
6.11. Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a) The Loans.
(b) Indebtedness existing on the date hereof and described in
Schedule 2, and any refinancing, refundings, renewals or extensions thereof,
provided that the amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension.
(c) Indebtedness evidenced by the Senior Notes in a principal
amount outstanding not to exceed $20,000,000 (provided, such Indebtedness shall
be repaid in full within two (2) Business Days of the Closing Date).
(d) Indebtedness arising from intercompany loans from the Borrower
to any guarantor of the Obligations or from any guarantor of the Obligations to
the Borrower; provided, that in each case such Indebtedness is unsecured and is
subordinated upon terms satisfactory to the Administrative Agent to the
obligations of the Borrower and its Subsidiaries with respect to the
Obligations.
(e) Indebtedness (including all Permitted Purchase Money
Indebtedness) secured by Liens, in a principal amount outstanding not to exceed
$1,000,000 in the aggregate at any time.
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(f) Indebtedness not otherwise permitted under this Section 6.11
in a principal amount outstanding not to exceed $2,000,000 in the aggregate at
any time.
(g) Indebtedness under all Permitted Sale and Leaseback
Transactions.
(h) Indebtedness with respect to all earn-outs and other similar
forms of contingent purchase prices in an amount not to exceed $1,000,000 at any
time.
6.12. Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except (i) a
Subsidiary may merge into the Borrower or a Wholly-Owned Subsidiary and (ii) in
connection with a Permitted Acquisition, provided however in any such case, the
Borrower or the applicable Wholly-Owned Subsidiary must be the surviving entity
and after giving effect thereto no Default or Unmatured Default shall exist.
6.13. Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell, transfer, assign or otherwise dispose of its
Property to any other Person (each an "ASSET SALE"), except:
(a) Sales of inventory in the ordinary course of business.
(b) Subject to the mandatory prepayment obligations pursuant to
Section 2.7.2 and the proviso below, leases, sales or other dispositions of its
Property that, together with all other Property of the Borrower and its
Subsidiaries previously leased, sold or disposed of (other than inventory in the
ordinary course of business) as permitted by this Section during the
twelve-month period ending with the month in which any such lease, sale or other
disposition occurs, do not constitute a Substantial Portion of the Property of
the Borrower and its Subsidiaries.
(c) Subject to the mandatory prepayment obligation pursuant to
Section 2.7.2 and the proviso below, the Borrower or any Subsidiary may dispose
of any redundant or duplicative assets (determined by management) acquired
directly or indirectly in a Permitted Acquisition if such disposition is made
pursuant to a plan of disposition consented to by the Administrative Agent
within twelve (12) months after the consummating of such Permitted Acquisition.
(d) Subject to the mandatory prepayment obligation pursuant to
Section 2.7.2, Permitted Sale and Leaseback Transactions.
Provided, however, with respect to Sections 6.13(b) and (c), the Net
Cash Proceeds of Asset Sales with respect to which the Borrower shall have given
the Administrative Agent written notice within thirty (30) days after such Asset
Sale of (i) its intention to replace the assets or use such Net Cash Proceeds to
acquire other like-kind assets within twelve (12) months following such Asset
Sale or (ii) its acquisition of other like-kind assets during the nine-month
period preceding such Asset Sale (up to an amount equal to the cash purchase
price of such like-kind asset) shall not be subject to the provisions of Section
2.7.2 unless and to the extent that such applicable period shall have expired
without such replacement having been made.
6.14. Investments and Acquisitions. The Borrower will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and
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41
advances to, and other Investments in, Subsidiaries), or commitments therefor,
or to create any Subsidiary or to become or remain a partner in any partnership
or joint venture, or to make any Acquisition of any Person, except:
(a) Cash Equivalent Investments.
(b) Existing Investments in Subsidiaries and other Investments in
existence on the date hereof and described in Schedule 1.
(c) Permitted Investments.
6.15. Liens. The Borrower will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
(a) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent or thereafter
can be paid without penalty, or are being contested in good faith and by
appropriate proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles shall have been set aside on its books.
(b) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 60 days past due or
which are being contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its books.
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other social
security or retirement benefits, or similar legislation.
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature generally
existing with respect to properties of a similar character and which do not in
any material way affect the marketability of the same or interfere with the use
thereof in the business of the Borrower or its Subsidiaries.
(e) Liens existing on the date hereof and described in Schedule 3.
(f) Non-consensual Liens arising in connection with court
proceedings if (i) such Liens secure monetary or non-monetary judgments or
orders not otherwise constituting an Event of Default under Section 7.9 or (ii)
the execution or other enforcement of any such Lien is effectively stayed and
the claims secured thereby are being contested in good faith in such manner that
the property subject to any such lien is not subject to forfeiture, and further
provided that adequate reserves are established and maintained by the Borrower
in accordance with Agreement Accounting Principles.
(g) Liens existing on property at the time of a Permitted
Acquisition by the Borrower or its Subsidiaries of such property (or of the
entity owning such property) provided that such Lien was not created in
anticipation of such acquisition and that any such Lien does not extend to any
other property of the Borrower or its Subsidiaries.
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42
(h) Liens securing Indebtedness permitted under Section 6.11(e).
6.16. Consolidated Rentals. The Borrower will not, nor will it
permit any Subsidiary, to, create, incur or suffer to exist obligations for
Consolidated Rentals in excess of (i) $26,000,000 during the fiscal year ending
December 31, 2002, (ii) $26,500,000 during the fiscal year ending December 31,
2003 and (iii) $27,800,000 during the fiscal year ending December 31, 2004 and
each fiscal year thereafter.
6.17. Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
6.18. ERISA. Except to the extent that such act, or failure to act
would not result singly, or in the aggregate, after taking into account all
other such acts or failures to act, in a liability which might be reasonably
expected materially to adversely affect the ability of the Company and the
members of the Controlled Group, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to materially adversely
affect the financial condition of the company and the members of the Controlled
Group taken as a whole, (i) engage, or permit any Controlled Group member to
engage, in any prohibited transaction described in Sections 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtain from the DOL, (ii) permit to
exist any accumulated funding deficiency (as defined in Sections 302 of ERISA
and 412 of the Code); (iii) fail, or permit any member of its Controlled Group
to fail, to pay timely required contributions or annual installments due with
respect to any waived funding deficiency of any Plan; (iv) terminate, or permit
any member of its Controlled Group to terminate, any Plan which would result in
any liability of the Company or any member of its Controlled Group under Title
IV of ERISA; (v) fail to make any contribution or payment to any Multiemployer
Plan which the Company or any member of its Controlled Group may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto; (vi) fail, or permit any member of its controlled Group to
fail, to pay any required installment or any other payment required under
Section 412 of the Code on or before the due date for such installment or other
payment, (vii) amend, or permit any member of its controlled Group to amend, a
Plan resulting in an increase in current liability for the plan year such that
the Company or any member of its Controlled Group is required to provide
security to such Plan under Section 401(a)(29) of the Code.
6.19. Financial Covenants.
6.19.1. Fixed Charge Coverage Ratio. The Borrower will not permit the
ratio (the "CONSOLIDATED FIXED CHARGE COVERAGE RATIO") of (i) Consolidated
EBITDA plus Consolidated Rentals minus Consolidated Capital Expenditures (the
deduction of Consolidated Capital Expenditures beginning on April 1, 2003, but
excluding from such deduction Permitted Acquisitions consummated on or after
April 1, 2003) to (ii) Consolidated Interest Expense, plus Restricted Payments,
plus Consolidated Rentals, plus current maturities of principal
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Indebtedness, plus expense for taxes paid or accrued, all calculated for the
Borrower and its Subsidiaries on a consolidated basis, as of the last day of any
fiscal quarter as set forth in the table below. The Consolidated Fixed Charge
Coverage Ratio shall be determined as of the last day of each fiscal quarter for
the four fiscal quarter period ending on such day, calculated, with respect to
Permitted Acquisitions, on a pro forma basis using historical audited and
reviewed unaudited financial statements obtained from the seller(s) in such
Permitted Acquisition (adjusted for non-recurring seller expenses and other
add-backs to Consolidated EBITDA, in each case, agreed upon by the Borrower and
the Administrative Agent) and reasonably acceptable to the Administrative Agent,
broken down by fiscal quarter in the Borrower's reasonable judgment and
satisfactory to the Administrative Agent; provided, however, to the extent such
seller does not provide historical audited financial statements, such financial
information (excluding Indebtedness incurred with respect to such Permitted
Acquisitions) shall not be included in such calculations; provided, further,
that for purposes of calculating Consolidated Capital Expenditures for the last
three fiscal quarters of 2003, (a) Consolidated Capital Expenditures as of the
end of the fiscal quarter ending June 30, 2003 shall be equal to Consolidated
Capital Expenditures for the period beginning on April 1, 2003 through and
including June 30, 2003 multiplied by four (4), (b) Consolidated Capital
Expenditures as of the end of the fiscal quarter ending September 30, 2003 shall
be equal to Consolidated Capital Expenditures for the period beginning on April
1, 2003 through and including September 30, 2003 multiplied by two (2), and (c)
Consolidated Capital Expenditures as of the end of the fiscal quarter ending
December 31, 2003 shall be equal to Consolidated Capital Expenditures for the
period beginning on April 1, 2003 through and including December 31, 2003
multiplied by four-thirds (4/3).
Fiscal Quarter Ending Fixed Charge Coverage Ratio
--------------------- ---------------------------
March 31, 2002 1.30 to 1.0
June 30, 2002 1.23 to 1.0
September 30, 2002 1.25 to 1.0
December 31, 2002 1.35 to 1.0
March 31, 2003 1.10 to 1.0
June 30, 2003 and each fiscal quarter 1.0 to 1.0
ending thereafter.
6.19.2. Leverage Ratio. The Borrower will not permit the ratio (the
"LEVERAGE RATIO") of (i) Consolidated Indebtedness minus cash on the balance
sheet of the Borrower and its Subsidiaries, on a Consolidated basis, in excess
of $5,000,000 to (ii) Consolidated EBITDA as of the end of each fiscal quarter
to be greater than 1.5 to 1.0. The Leverage Ratio shall be calculated, in each
case, as of the last day of each fiscal quarter based upon (a) for Consolidated
Indebtedness, Consolidated Indebtedness as of the last day of each such fiscal
quarter; and (b) for Consolidated EBITDA, the actual amount for the four-quarter
period ending on such day, calculated, with respect to Permitted Acquisitions,
on a pro forma basis using historical audited and reviewed unaudited financial
statements obtained from the seller(s) in such Permitted
SIDLEY XXXXXX XXXXX & XXXX
44
Acquisition (adjusted for non-recurring seller expenses and other add-backs to
Consolidated EBITDA, in each case, agreed upon by the Borrower and the
Administrative Agent) and reasonably acceptable to the Administrative Agent,
broken down by fiscal quarter in the Borrower's reasonable judgment and
satisfactory to the Administrative Agent; provided, however, to the extent such
seller does not provide historical audited financial statements, such financial
information (excluding Indebtedness incurred with respect to such Permitted
Acquisitions) shall not be included in such calculations.
6.19.3. Minimum Net Worth. The Borrower will at all times maintain
Consolidated Net Worth of not less than the sum of (i) $180,000,000 plus (ii)
50% of Consolidated Net Income (if positive) earned in each fiscal quarter
beginning with the fiscal quarter ending March 31, 2002.
6.19.4. 2002 Capital Expenditures. The Borrower will not, nor will it
permit any Subsidiary to, expend, or be committed to expend, amounts for Capital
Expenditures (other than the purchase price of any Permitted Acquisition and any
Indebtedness incurred in connection therewith), (i) in excess of $23,000,000
during the period commencing on January 1, 2002 through December 31, 2002, in
the aggregate, for the Borrower and its Subsidiaries and (ii) in excess of
$1,500,000 plus an amount equal to (A) $23,000,000 minus (B) actual Capital
Expenditures (other than the purchase price of any Permitted Acquisition and any
Indebtedness incurred in connection therewith) for the period commencing on
January 1, 2002 through December 31, 2002 of the Borrower and its Subsidiaries
in the aggregate) for the fiscal quarter ending March 31, 2003 in the aggregate
for the Borrower and its Subsidiaries.
6.19.5. Liquidity. The Borrower and its Subsidiaries, on a
consolidated basis, will not permit, as of last day of any fiscal quarter, the
sum of (a) all cash and Cash Equivalent Investments as of such date plus (b) the
Aggregate Available Commitment as of such date, to be less than $10,000,000.
6.20. Addition of Guaranty; Guarantors. Promptly but in any event
within fifteen (15) days after any domestic Subsidiary becomes a Material
Subsidiary of the Borrower, the Borrower shall cause each such Material
Subsidiary to execute and deliver to the Administrative Agent a Guaranty.
6.21. Sale and Leaseback Transactions and other Off-Balance Sheet
Liabilities. The Borrower will not, nor will it permit any Subsidiary to, enter
into or suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other
transaction pursuant to which it incurs or has incurred Off-Balance Sheet
Liabilities, except for Permitted Sale and Leaseback Transactions.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Breach of Representations or Warranties. Any representation or
warranty made or deemed made by or on behalf of the Borrower or any of its
Subsidiaries to the Lenders or the Administrative Agent under or in connection
with this Agreement, any Loan, or any certificate or
SIDLEY XXXXXX XXXXX & XXXX
45
information delivered in connection with this Agreement or any other Loan
Document shall be false in any material respect on the date as of which made.
7.2. Failure to Make Payments When Due. Nonpayment of (i) principal
of any Loan when due, or (ii) interest upon any Loan or any Commitment Fee or
other Obligations under any of the Loan Documents within five (5) Business Days
after such interest, fee or other Obligation becomes due and payable.
7.3. Breach of Covenants. The breach by the Borrower of any of the
terms or provisions of Section 6.3 or Sections 6.10 through 6.21.
7.4. Other Breaches. The breach by the Borrower (other than a
breach which constitutes a Default under another Section of this Article VII) of
any of the terms or provisions of this Agreement or any other Loan Document
which is not remedied within thirty (30) days after the earlier of (i) the date
the Borrower or any Subsidiary shall have knowledge of the occurrence thereof
and (ii) written notice thereof shall have been given to the Borrower.
7.5. Default as to Other Indebtedness.
(i) Failure of the Borrower or any of its Subsidiaries to pay when
due and payable (whether at stated maturity, by acceleration or otherwise) any
Indebtedness which, individually or in the aggregate exceeds $2,000,000 or the
equivalent thereof in currencies other than Dollars) (the indebtedness described
in this clause (i) being referred to as "MATERIAL INDEBTEDNESS") and such
default continues after the applicable grace period applicable thereto; or
(ii) Any Material Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required to be prepaid
or repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or
(iii) The Borrower or any of its Subsidiaries shall fail to pay, or
shall admit in writing its inability to pay, its debts generally as they become
due; or
(iv) The default by the Borrower or any of its Subsidiaries in the
performance (beyond the applicable grace period with respect thereto, if any) of
any term, provision or condition contained in any agreement under which any such
Material Indebtedness was created or is governed, or any other event shall occur
or condition exist, the effect of which default or event is to cause, or to
permit the holder or holders (or trustee on behalf of any such holder) of such
Material Indebtedness to cause such Material Indebtedness to become due prior to
its stated maturity.
7.6. Voluntary Bankruptcy; Appointment of Receiver; Etc. The
Borrower or any of its Subsidiaries shall (i) have an order for relief entered
with respect to it under the Federal bankruptcy laws as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors, (iii) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (iv) institute any proceeding seeking an order for
relief under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of
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46
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6, or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7. Involuntary Bankruptcy; Appointment of Receiver; Etc. Without
the application, approval or consent of the Borrower or any of its Subsidiaries,
a receiver, trustee, custodian, examiner, liquidator or similar official shall
be appointed for the Borrower or any of its Subsidiaries or any Substantial
Portion of its Property, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower or any of its Subsidiaries and such appointment
continues undischarged or such proceeding continues undismissed or unstayed for
a period of sixty (60) consecutive days.
7.8. Custody or Control of Property. Any court, government or
governmental agency shall condemn, seize or otherwise appropriate, or take
custody or control of, all or any portion of the Property of the Borrower and
its Subsidiaries which, when taken together with all other Property of the
Borrower and its Subsidiaries so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending with the month in
which any such action occurs, constitutes a Substantial Portion.
7.9. Judgments. The Borrower or any of its Subsidiaries shall fail
within thirty (30) days of the later of the date of entry or the due date, to
pay, bond or otherwise discharge one or more (i) judgments or orders for the
payment of money (except to the extent covered by independent third party
insurance as to which the insurer has not disclaimed coverage) in excess of
$2,000,000 (or the equivalent thereof in currencies other than Dollars) in the
aggregate, or (ii) nonmonetary judgments or orders which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, which
judgment(s), in any such case, is/are not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10. Unfunded Liabilities. The sum of (a) the Unfunded Liabilities
of all Plans and (b) the present value of the aggregate unfunded liabilities to
provide the accrued benefits under all Foreign Pension Plans exceeds in the
aggregate an amount equal to the sum of (i) ten percent (10%) of the value (as
of any date of determination) of all Plan assets allocable to Plan benefits
guaranteed by ERISA and (ii) ten percent (10%) of the fair market value of the
assets held in trust or other funding vehicles for accrued benefits under all
Foreign Pension Plans, or any Reportable Event shall occur in connection with
any Plan, which could reasonably be expected to result in liability of the
Borrower or any of its Subsidiaries, individually or in the aggregate, in excess
of $3,000,000.
7.11. Other ERISA Liabilities. The Borrower or any other member of
the Controlled Group shall have been notified by the sponsor of a Multiemployer
Plan that it has incurred withdrawal liability or become obligated to make
contributions to a Multiemployer Plan in an amount which, when aggregated with
all other amounts required to be paid to Multiemployer Plans by the Borrower or
any other member of the Controlled Group as withdrawal liability (determined as
of the date of such notification), exceeds $2,000,000 or requires payments
exceeding $2,000,000 per annum.
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7.12. Environmental Matters. The Borrower or any of its Subsidiaries
shall (i) be the subject of any proceeding or investigation pertaining to the
release by the Borrower, any of its Subsidiaries or any other Person of any
toxic or hazardous waste or substance into the environment, or (ii) violate any
Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), could reasonably be expected to have a Material Adverse Effect.
7.13. Change in Control. Any Change in Control shall occur.
7.14. Other Default. The occurrence of any "default", as defined in
any Loan Document (other than this Agreement) or the breach of any of the terms
or provisions of any Loan Document (other than this Agreement), which default or
breach continues beyond any period of grace therein provided. Any material
provision of any Loan Document after delivery thereof pursuant to the terms
hereof or of any other Loan Document shall for any reason cease to be valid and
binding on or enforceable against the Borrower or the Borrower shall so state in
writing.
7.15. Rate Management Obligation. Nonpayment by the Borrower or any
Subsidiary of any Rate Management Obligation when due or the breach by the
Borrower or any Subsidiary of any term, provision or condition contained in any
Rate Management Transaction, and such default continues after the applicable
grace period applicable thereto.
7.16. Loss of Licenses. Any governmental authority revokes or fails
to renew any material license, permit or franchise of the Borrower or any
Subsidiary, or the Borrower or any Subsidiary for any reason loses any material
license, permit or franchise, or the Borrower or any Subsidiary suffers the
imposition of any restraining order, escrow, suspension or impound of funds in
connection with any proceeding (judicial or administrative) with respect to any
material license, permit or franchise, which could reasonably be expected to
result in (i) a reduction of Consolidated Net Income attributable thereto in
excess of $2,000,000 or (ii) losses or liability of the Borrower or any of its
Subsidiaries, individually or in the aggregate, in excess of $2,000,000.
7.17. Material Adverse Change. The Borrower or its Subsidiaries have
a Material Adverse Change.
7.18. Guaranty. Any guaranty shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any guaranty, or any Material Subsidiary, which pursuant
to Section 6.20 becomes a guarantor, shall fail to comply with any of the terms
or provisions of any such Guaranty to which it is a party, or any Guarantor
shall deny that it has any further liability under any Guaranty to which it is a
party, or shall give notice to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Administrative Agent or any Lender. If any other Default occurs or any
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material adverse change in the business, operations, prospects or financial
condition of the Borrower which, if uncorrected, would in the reasonable good
faith judgment of the Required Lenders result in any other Default, the Required
Lenders (or the Administrative Agent with the consent of the Required Lenders)
may terminate or suspend the obligations of the Lenders to make Loans hereunder,
or declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
If, within thirty (30) days after acceleration of the maturity
of the Obligations or termination of the obligations of the Lenders to make
Loans hereunder as a result of any Default (other than any Default as described
in Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Administrative Agent with the consent in writing of
the Required Lenders) and the Borrower may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Lenders or the Borrower
hereunder or thereunder or waiving any Default hereunder or thereunder;
provided, however, that no such supplemental agreement shall, without the
consent of each Lender affected thereby:
(i) Extend the final maturity of any Loan or forgive all or any
portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon (other
than a waiver of the application of the default rate of
interest pursuant to Section 2.11 hereof).
(ii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified
matters or amend the definitions of "Required Lenders" or "Pro
Rata Share".
(iii) Extend the Converted Loan Termination Date or the Commitment
Termination Date or increase the amount or otherwise extend
the term of the Commitment of any Lender hereunder.
(iv) Permit the Borrower to assign its rights or obligations under
this Agreement.
(v) Except in accordance with the terms of the Loan Documents,
release any guarantor of the Obligations or all or
substantially all of the collateral, if any, securing the
Obligations.
(vi) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent. The Administrative Agent
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may waive payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders or
the Administrative Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of
a Default or Unmatured Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by, or by the Administrative Agent with the consent of, the requisite
number of Lenders required pursuant to Section 8.2, and then only to the extent
in such writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be available to
the Administrative Agent and the Lenders until all of the Obligations have been
paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Borrower contained in this Agreement shall survive the making
of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrower, the Administrative Agent and the
Lenders and supersede all prior agreements and understandings among the
Borrower, the Administrative Agent and the Lenders relating to the subject
matter thereof other than the fee letter described in Section 10.13.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other (except to the extent to which
the Administrative Agent is authorized to act as such). The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns, provided,
however, that the parties hereto expressly agree that the Arranger shall enjoy
the benefits of the provisions of Sections 9.6, 9.10, 10.11, and 10.13 to the
extent specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and in its own name to the same extent as if it
were a party to this Agreement.
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9.6. Expenses; Indemnification.
(i) The Borrower shall reimburse the Administrative Agent and the
Arranger for any costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' and paralegals' fees, time charges and expenses of
attorneys and paralegals for the Administrative Agent and Arrangers, which
attorneys and paralegals may or may not be employees of the Administrative Agent
or the Arranger, and expenses of and fees for other advisors and professionals
engaged by the Administrative Agent or the Arranger) paid or incurred by the
Administrative Agent or the Arranger in connection with the investigation,
preparation, negotiation, documentation, execution, delivery, syndication,
distribution (including, without limitation, via the internet), review,
amendment, modification, administration and collection of the Loan Documents.
The Borrower also agrees to reimburse the Administrative Agent, the Arranger and
the Lenders for any costs, internal charges and out-of-pocket expenses
(including attorneys' and paralegals' fees, time charges and expenses of
attorneys and paralegals for the Administrative Agent, the Arranger and the
Lenders, which attorneys and paralegals may be employees of the Administrative
Agent, the Arranger or the Lenders) paid or incurred by the Administrative
Agent, the Arranger or any Lender in connection with the collection and
enforcement of the Loan Documents. Expenses being reimbursed by the Borrower
under this Section 9.6 include, without limitation, costs and expenses incurred
in connection with the Reports described in the following sentence. The Borrower
acknowledges that from time to time LaSalle Bank may prepare and may distribute
to the Lenders (but shall have no obligation or duty to prepare or to distribute
to the Lenders) certain audit reports (the "REPORTS") pertaining to the
Borrower's assets for internal use by LaSalle Bank from information furnished to
it by or on behalf of the Borrower, after LaSalle Bank has exercised its rights
of inspection pursuant to this Agreement.
(ii) The Borrower hereby further agrees to indemnify the
Administrative Agent, the Arranger, each Lender, their respective affiliates,
and each of their directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all reasonable expenses of litigation or preparation therefor
whether or not the Administrative Agent, the Arranger, any Lender or any
affiliate is a party thereto, and all reasonable attorneys' and paralegals'
fees, time charges and expenses of attorneys and paralegals of the party seeking
indemnification, which attorneys and paralegals may or may not be employees of
such party seeking indemnification) which any of them may pay or incur arising
out of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder, except to the extent that the
same arose or resulted solely from the gross negligence or willful misconduct of
the party seeking indemnification. The obligations of the Borrower under this
Section 9.6 shall survive the termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Administrative Agent
with sufficient counterparts so that the Administrative Agent may furnish one to
each of the Lenders, to the extent that the Administrative Agent deems
necessary.
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9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles. If any changes in generally accepted accounting principles are
hereafter required or permitted and are adopted by the Borrower or any of its
Subsidiaries with the agreement of its independent certified public accountants
and such changes result in a change in the method of calculation of any of the
financial covenants, tests, restrictions or standards herein or in the related
definitions or terms used therein ("ACCOUNTING CHANGES"), the parties hereto
agree, at the Borrower's request, to enter into negotiations, in good faith, in
order to amend such provisions in a credit neutral manner so as to reflect
equitably such changes with the desired result that the criteria for evaluating
the Borrower's and its Subsidiaries' financial condition shall be the same after
such changes as if such changes had not been made; provided, however, until such
provisions are amended in a manner reasonably satisfactory to the Administrative
Agent and the Required Lenders, no Accounting Change shall be given effect in
such calculations and all financial statements and reports required to be
delivered hereunder shall be prepared in accordance with Agreement Accounting
Principles without taking into account such Accounting Changes. In the event
such amendment is entered into, all references in this Agreement to Agreement
Accounting Principles shall mean generally accepted accounting principles as of
the date of such amendment.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower
on the one hand and the Lenders and the Administrative Agent on the other hand
shall be solely that of borrower and lender. None of the Administrative Agent,
the Arranger or any Lender shall have any fiduciary responsibilities to the
Borrower. None of the Administrative Agent, the Arranger or any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations. The Borrower agrees that none of the Administrative Agent, the
Arranger or any Lender shall have liability to the Borrower (whether sounding in
tort, contract or otherwise) for losses suffered by the Borrower in connection
with, arising out of, or in any way related to, the transactions contemplated
and the relationship established by the Loan Documents, or any act, omission or
event occurring in connection therewith, unless it is determined that such
losses resulted solely from the gross negligence or willful misconduct of the
party from which recovery is sought. None of the Administrative Agent, the
Arranger or any Lender shall have any liability with respect to, and the
Borrower hereby waives, releases and agrees not to xxx for, any special,
indirect, consequential or punitive damages suffered by the Borrower in
connection with, arising out of, or in any way related to the Loan Documents or
the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee or prospective
Transferee, (iii) to regulatory officials, (iv) to any Person as requested
pursuant to or as required
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by law, regulation, or legal process, (v) to any Person in connection with any
legal proceeding to which such Lender is a party, (vi) to such Lender's direct
or indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, and (vii)
permitted by Section 12.4.
9.12. Lenders Not Utilizing Plan Assets. None of the consideration
used by any of the Lenders to make its Loans constitutes for any purpose of
ERISA or Section 4975 of the Code assets of any "plan" as defined in Section
3(3) of ERISA or Section 4975 of the Code and the rights and interests of each
of the Lenders in and under the Loan Documents shall not constitute such "plan
assets" under ERISA.
9.13. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U) as
collateral in the extension or maintenance of the credit provided for herein.
9.14. Disclosure. The Borrower and each Lender hereby acknowledge
and agree that LaSalle Bank and/or its respective Affiliates and certain of the
other Lenders and/or their respective Affiliates from time to time may hold
investments in, make other loans to or have other relationships with the
Borrower and its Affiliates.
9.15. Subordination of Intercompany Indebtedness. The Borrower
agrees that any and all claims of the Borrower with respect to any "Intercompany
Indebtedness" (as hereinafter defined) against any of its Subsidiaries that is a
guarantor of the Obligations, any endorser, obligor or any other guarantor of
all or any part of the Obligations (each a "GUARANTOR"), or against any of its
properties shall be subordinate and subject in right of payment to the prior
payment, in full and in cash, of all Obligations; provided that, and not in
contravention of the foregoing, so long as no Default has occurred and is
continuing the Borrower may make loans to and receive payments in the ordinary
course with respect to such Intercompany Indebtedness from each such Guarantor
to the extent not prohibited by the terms of this Agreement and the other Loan
Documents. Notwithstanding any right of the Borrower to ask, demand, xxx for,
take or receive any payment from any Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Guarantor shall be and are subordinated to the
rights of the holders of the Obligations and the Administrative Agent in those
assets. The Borrower shall have no right to possession of any such asset or to
foreclose upon any such asset, whether by judicial action or otherwise, unless
and until all of the Obligations (other than contingent indemnity obligations)
shall have been fully paid and satisfied (in cash) and all financing
arrangements pursuant to any Loan Document have been terminated. If all or any
part of the assets of any Guarantor, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of such Guarantor,
whether partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit
of creditors or any other action or proceeding, or if the business of any such
Guarantor is dissolved or if substantially all of the assets of any such
Guarantor are sold, then, and in any such event (such events being herein
referred to as an "Insolvency Event"), any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Guarantor
to the Borrower ("INTERCOMPANY INDEBTEDNESS") shall be paid or delivered
directly to the Administrative Agent for application on any of the
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Obligations, due or to become due, until such Obligations (other than contingent
indemnity obligations) shall have first been fully paid and satisfied (in cash).
Should any payment, distribution, security or instrument or proceeds thereof be
received by the Borrower upon or with respect to the Intercompany Indebtedness
after an Insolvency Event prior to the satisfaction of all of the Obligations
(other than contingent indemnity obligations) and the termination of all
financing arrangements pursuant to any Loan Document, the Borrower shall receive
and hold the same in trust, as trustee, for the benefit of the holders of the
Obligations and shall forthwith deliver the same to the Administrative Agent,
for the benefit of such Persons, in precisely the form received (except for the
endorsement or assignment of the Borrower where necessary), for application to
any of the Obligations, due or not due, and, until so delivered, the same shall
be held in trust by the Borrower as the property of the holders of the
Obligations. If the Borrower fails to make any such endorsement or assignment to
the Administrative Agent, the Administrative Agent or any of its officers or
employees are irrevocably authorized to make the same. The Borrower agrees that
until the Obligations (other than the contingent indemnity obligations) have
been paid in full (in cash) and satisfied and all financing arrangements
pursuant to any Loan Document have been terminated, the Borrower will not assign
or transfer to any Person (other than the Administrative Agent) any claim the
Borrower has or may have against any Guarantor.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. LaSalle Bank is hereby
appointed by each of the Lenders as the Administrative Agent hereunder and under
each other Loan Document, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "ADMINISTRATIVE AGENT", it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Administrative Agent
(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code and (iii) is acting as an independent contractor, the
rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents. Each of the Lenders hereby agrees to
assert no claim against the Administrative Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender hereby waives.
10.2. Powers. The Administrative Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties or fiduciary duties to the Lenders or any
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obligation to the Lenders to take any action thereunder, except any action
specifically provided by the Loan Documents to be taken by the Administrative
Agent.
10.3. General Immunity. Neither the Administrative Agent or any of
its directors, officers, agents or employees shall be liable to the Borrower,
the Lenders or any Lender for any action taken or omitted to be taken by it or
them hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final,
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent or any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Administrative
Agent; (d) the existence or possible existence of any Default or Unmatured
Default; (e) the validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith; (f) the value, sufficiency, creation, perfection or
priority of any Lien in any collateral security; or (g) the financial condition
of the Borrower or any guarantor of any of the Obligations or of any of the
Borrower's or any such guarantor's respective Subsidiaries. The Administrative
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Administrative Agent at such
time, but is voluntarily furnished by the Borrower to the Administrative Agent
(either in its capacity as an Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders (or all of the Lenders in the event
that and to the extent that this Agreement expressly requires such), and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders. The Lenders hereby acknowledge that the
Administrative Agent shall be under no duty to take any discretionary action
permitted to be taken by it pursuant to the provisions of this Agreement or any
other Loan Document unless they shall be requested in writing to do so by the
Required Lenders (or all of the Lenders in the event that and to the extent that
this Agreement expressly requires such). The Administrative Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
10.6. Employment of the Administrative Agent and Counsel. The
Administrative Agent may execute any of its respective duties as the
Administrative Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with
SIDLEY XXXXXX XXXXX & XXXX
55
reasonable care. The Administrative Agent shall be entitled to advice of counsel
concerning the contractual arrangement between the Administrative Agent and the
Lenders and all matters pertaining to the Administrative Agent's duties
hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Administrative Agent shall
be entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and, in
respect to legal matters, upon the opinion of counsel selected by the
Administrative Agent, which counsel may be employees of the Administrative
Agent.
10.8. Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to the Lenders' Pro Rata Shares of the Aggregate Commitment (or,
after the Commitment Termination Date, of the Aggregate Outstanding Credit
Exposure) (i) for any amounts not reimbursed by the Borrower for which the
Administrative Agent is entitled to reimbursement by the Borrower under the Loan
Documents, (ii) for any other expenses incurred by the Administrative Agent on
behalf of the Lenders in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents (including, but not limited
to, for any expenses incurred by the Administrative Agent in connection with any
dispute between the Administrative Agent and any Lender or between two or more
of the Lenders) and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Administrative Agent in connection
with any dispute between the Administrative Agent and any Lender or between two
or more of the Lenders), or the enforcement of any of the terms of the Loan
Documents or of any such other documents, provided that (i) no Lender shall be
liable for any of the foregoing to the extent any of the foregoing is found in a
final, non-appealable judgment in a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of the Administrative
Agent and (ii) any indemnification required pursuant to Section 3.5(vii) shall,
notwithstanding the provisions of this Section 10.8, be paid by the relevant
Lender in accordance with the provisions thereof. The obligations of the Lenders
under this Section 10.8 shall survive payment of the Obligations and termination
of this Agreement.
10.9. Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Administrative Agent has received written notice
from a Lender or the Borrower referring to this Agreement describing such
Default or Unmatured Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Commitment and its Loans
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the term "Lender" or "Lenders" shall, at any time when the
Administrative Agent is a Lender, unless the context otherwise indicates,
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56
include the Administrative Agent in its individual capacity. The Administrative
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is
not restricted hereby from engaging with any other Person.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Arranger
or any other Lender and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement and the
other Loan Documents. Each Lender also acknowledges that it will, independently
and without reliance upon the Administrative Agent, the Arranger or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement and the other Loan Documents.
10.12. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five (45) days after the Administrative Agent gives notice of
its intention to resign. The Administrative Agent may be removed at any time
with or without cause by written notice received by the Administrative Agent
from the Required Lenders, such removal to be effective on the date specified by
the Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders within thirty (30) days after the
resigning Administrative Agent's giving notice of its intention to resign, then
the resigning Administrative Agent may appoint, on behalf of the Borrower and
the Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of the
Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as its successor Administrative Agent hereunder. If an Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a commercial bank
having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning or removed Administrative Agent. Upon the
effectiveness of the resignation or removal of the Administrative Agent, the
resigning or removed Administrative Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of the Administrative Agent, the provisions of
this Article X shall continue in effect for the benefit of the Administrative
Agent in respect of any actions taken or omitted to be taken by it while it was
acting as the Administrative Agent hereunder and under the other Loan Documents.
In the event
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57
that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then (a) the term "Prime Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new
Administrative Agent and (b) the references to "LaSalle Bank" in the definitions
of "LIBOR Base Rate" and "Prime Rate" and in the last sentence of Section 2.12
shall be deemed to be a reference to such successor Administrative Agent in its
individual capacity.
10.13. Agent and Arranger Fees. The Borrower agrees to pay to the
Administrative Agent and the Arranger, for their respective accounts, the fees
agreed to by the Borrower, the Administrative Agent and the Arranger pursuant to
that certain letter agreement dated February 11, 2002, or as otherwise agreed
from time to time.
10.14. Delegation to Affiliates. The Borrower and the Lenders agree
that the Administrative Agent may delegate any of its duties under this
Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate's
directors, officers, agents and employees) which performs duties in connection
with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the
Administrative Agent is entitled under Articles IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Obligations owing to such
Lender, whether or not the Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans then due and payable (other
than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater
proportion than that received by any other Lender, such Lender agrees, promptly
upon demand, to purchase a participation in the Aggregate Outstanding Credit
Exposure held by the other Lenders so that after such purchase each Lender will
hold its Pro Rata Share of the Aggregate Outstanding Credit Exposure. If any
Lender, whether in connection with setoff or amounts which might be subject to
setoff or otherwise, receives collateral or other protection for its Obligations
or such amounts which may be subject to setoff, such Lender agrees, promptly
upon demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their respective Pro Rata
Shares of the Aggregate Outstanding Credit Exposure . In case any such payment
is disturbed by legal process, or otherwise, appropriate further adjustments
shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
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58
12.1. Successors and Assigns.
12.1.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, the
Administrative Agent and the Lenders and their respective successors and
assigns, except that (i) the Borrower shall not have the right to assign its
rights or obligations under the Loan Documents without the consent of all of the
Lenders, and any such assignment in violation of this Section 12.1.1 shall be
null and void, and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of
this Section 12.1.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, (x) any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a
Lender which is a fund, any pledge or assignment of all or any portion of its
rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Administrative Agent may treat the Person
which made any Loan or which holds any Note as the owner thereof for all
purposes hereof unless and until such Person complies with Section 12.3;
provided, however, that the Administrative Agent may in its discretion (but
shall not be required to) follow instructions from the Person which made any
Loan or which holds any Note to direct payments relating to such Loan or Note to
another Person. Any assignee of the rights to any Loan or any Note agrees by
acceptance of such assignment to be bound by all the terms and provisions of the
Loan Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder or assignee of the
rights to such Loan.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("PARTICIPANTS") participating
interests in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under the Loan
Documents. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the owner of its Loans and the holder of any Note issued to it in evidence
thereof for all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan or
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59
Commitment in which such Participant has an interest which (i) extends the final
maturity of any Loan or forgives all or a portion of the principal amount
thereof or interest or fees thereon, or reduces the rate or extends the time of
payment of interest or fees on any such Loan or the related Commitment or (ii)
extends the Commitment Termination Date, or (ii) releases any guarantor of the
Obligations or all or substantially all of the collateral, if any, securing the
Obligations.
12.2.3. Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, provided that each Lender shall
retain the right of setoff provided in Section 11.1 with respect to the amount
of participating interests sold to each Participant. The Lenders agree to share
with each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign to one
or more banks or other entities ("PURCHASERS") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be evidenced by an
agreement substantially in the form of Exhibit C or in such other form as may be
agreed to by the parties thereto (each such agreement, an "ASSIGNMENT
AGREEMENT"). The consent of the Borrower and the Administrative Agent shall be
required prior to an Assignment Agreement becoming effective with respect to a
Purchaser which is not a Lender, an Affiliate thereof, provided, however, that
if a Default has occurred and is continuing, the consent of the Borrower shall
not be required. Such consent shall not be unreasonably withheld or delayed.
Each such assignment with respect to a Purchaser which is not a Lender, an
Affiliate thereof shall (unless each of the Borrower and the Administrative
Agent otherwise consents) be in an amount not less than the lesser of (i)
$5,000,000 and integral multiples of $1,000,000 in excess thereof or (ii) the
remaining amount of the assigning Lender's Commitment (calculated as at the date
of such assignment), or, if the Commitment Termination Date has occurred, the
remaining amount of the assigning Lender's Outstanding Credit Exposure.
12.3.2. Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of an Assignment Agreement, together with any consents
required by Section 12.3.1, and (ii) payment by the assigning Lender of a $3,500
fee to the Administrative Agent for processing such assignment (unless such fee
is waived by the Administrative Agent), such assignment shall become effective
on the effective date specified in such assignment. The Assignment Agreement
shall contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and Loans under the
applicable Assignment Agreement constitutes "plan assets" as defined under ERISA
and that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the effective date
of such assignment, such Purchaser shall for all purposes be a Lender party to
this Agreement and any other Loan Document executed by or on behalf of the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same
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60
extent as if it were an original party hereto, and no further consent or action
by the Borrower, the Lenders or the Administrative Agent shall be required to
release the transferor Lender with respect to the percentage of the Aggregate
Commitment and Loans assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the transferor
Lender, the Administrative Agent and the Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes, make
appropriate arrangements so that new Notes or, as appropriate, replacement Notes
are issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in principal
amounts reflecting their respective Commitments (or, if the Commitment
Termination Date has occurred, their respective Outstanding Credit Exposure), as
adjusted pursuant to such assignment.
12.3.3. The Register. Notwithstanding anything to the contrary in this
Agreement, the Borrower hereby designates the Administrative Agent, and the
Administrative Agent, hereby accepts such designation, to serve as the
Borrower's contractual representative solely for purposes of this Section
12.3.3. In this connection, the Administrative Agent shall maintain at its
address referred to in Section 13.1 a copy of each Assignment Agreement
delivered to and accepted by it pursuant to this Section 12.3.3 and a register
(the "REGISTER") for the recordation of the names and addresses of the Lenders
and the Commitment of, principal amount of and interest on the Loans owing to,
each Lender from time to time and whether such Lender is an original Lender or
the assignee of another Lender pursuant to an assignment under this Section
12.3. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower and each of its Subsidiaries,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
12.4. Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "TRANSFEREE") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any reports or other information
delivered by the Borrower pursuant to Section 6.1; provided that each Transferee
and prospective Transferee agrees to be bound by Section 9.11 of this Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given
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61
to such party: (x) in the case of the Borrower, the Administrative Agent or any
Lender party hereto as of the Closing Date, at its respective address or
facsimile number set forth on the signature pages hereof, (y) in the case of any
Lender that becomes a party hereto pursuant to Section 12.3, at its address or
facsimile number set forth in the applicable Assignment Agreement or, if none is
provided therein, in its administrative questionnaire or (z) in the case of any
party, at such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Administrative Agent and the Borrower
in accordance with the provisions of this Section 13.1. Each such notice,
request or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered
(or, in the case of electronic transmission, received) at the address specified
in this Section; provided that notices to the Administrative Agent under Article
II shall not be effective until received.
13.2. Change of Address. The Borrower, the Administrative Agent and
any Lender may each change the address for service of notice upon it by a notice
in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Administrative Agent and the Lenders and each party has notified the
Administrative Agent by facsimile transmission or telephone that it has taken
such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING SECTION 735 ILCS 105/5-1 ET SEQ.
BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN XXXX COUNTY, ILLINOIS IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
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62
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE
AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT
OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING
OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN
A COURT IN XXXX COUNTY, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
[Signature Pages Follow]
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63
IN WITNESS WHEREOF, the Borrower, the Lenders and the Administrative
Agent have executed this Agreement as of the date first above written.
INSURANCE AUTO AUCTIONS, INC., as the Borrower
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Sr. Vice President - Finance,
Chief Financial Officer and Secretary
Address: 000 X. Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
---------------------------------
Phone: (000) 000-0000
---------------------------------
Fax: (000) 000-0000
---------------------------------
E-mail: xxxxxxx@xxxx.xxx
---------------------------------
SIGNATURE PAGE TO CREDIT AGREEMENT
64
LASALLE BANK NATIONAL ASSOCIATION,
as the Administrative Agent and as
a Lender
By: /s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
E-mail: xxxx.xxxxxxx@xxx.xxxx.xxx
SIGNATURE PAGE TO CREDIT AGREEMENT
65
PRICING SCHEDULE
-----------------------------------------------------------------------------------------------------------------
LEVERAGE RATIO APPLICABLE MARGIN APPLICABLE MARGIN (FLOATING APPLICABLE COMMITMENT FEE
(LIBOR ADVANCE) RATE ADVANCE) RATE
-----------------------------------------------------------------------------------------------------------------
Greater than 1.0 to 1.0x 1.375% 0.0% 0.375%
-----------------------------------------------------------------------------------------------------------------
Greater than 0.50 to 1.0, 1.25% 0.0% 0.30%
but less than or equal to
1.0 to 1.0
-----------------------------------------------------------------------------------------------------------------
Less than or equal to 0.50 1.00% 0.0% 0.25%
to 1.0
-----------------------------------------------------------------------------------------------------------------
The Applicable Margin and the Applicable Commitment Fee Rate shall be determined
in accordance with the foregoing table based on the Borrower's Leverage Ratio as
calculated based upon the Borrower's most recent annual or quarterly financial
statements delivered pursuant to Section 6.1(i) or 6.1(ii) (the "Financials").
Adjustments, if any, to the Applicable Margin or the Applicable Commitment Fee
Rate shall be effective as of the tenth (10th) Business Day following the date
the Administrative Agent has received the applicable Financials. If the Borrower
fails to deliver the Financials to the Administrative Agent at the time required
pursuant to Section 6.1(i) or 6.1(ii), as applicable, then the Applicable Margin
and the Applicable Commitment Fee Rate shall be the highest Applicable Margin
and Applicable Commitment Fee Rate set forth in the foregoing table until the
tenth (10th) Business Day following the date such Financials are so delivered.
Notwithstanding anything herein to the contrary, from the Closing Date to but
not including the tenth (10th) Business Day following receipt of the Borrower's
financial statements delivered pursuant to Section 6.1(b) for the fiscal quarter
ending June 30, 2002, the Applicable Margins and Applicable Commitment Fee Rate
shall be determined based upon a Leverage Ratio greater than 0.50 to 1.00 but
less than or equal to 1.00 to 1.0; provided, that on the tenth (10th) Business
Day following receipt of the Borrower's financial statements delivered pursuant
to Section 6.1(b) for the period ending on March 31, 2002, the Applicable
Margins and Applicable Commitment Fee Rate shall be increased (but not reduced),
as applicable, as determined based on such financial statements and officer's
certificate delivered therewith.
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COMMITMENT SCHEDULE
LENDER COMMITMENT
--------------------------------------------------------------------------------
LaSalle Bank National Association $20,000,000
===========
AGGREGATE COMMITMENT $20,000,000
SIDLEY XXXXXX XXXXX & XXXX
SCHEDULE 1
INVESTMENTS
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SCHEDULE 2
INDEBTEDNESS
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SCHEDULE 3
LIENS
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SCHEDULE 4
SUBSIDIARIES
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