EXHIBIT 4.3
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AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of October 26, 1998
among
CAREER EDUCATION CORPORATION,
as Parent,
THE CO-BORROWERS NAMED HEREIN,
THE LENDERS NAMED HEREIN,
LASALLE NATIONAL BANK,
as Administrative Agent,
and
THE BANK OF NOVA SCOTIA,
as Foreign Currency Agent
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The following Table of Contents has been inserted for convenience only and does
not constitute a part of this Agreement.
TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS AND ACCOUNTING TERMS............................... 1
1.1 Certain Defined Terms............................................ 1
1.2 Other Definitional Provisions.................................... 21
1.3 Accounting and Financial Determinations.......................... 22
1.4 Currency Equivalents Generally................................... 22
SECTION 2. THE COMMITMENTS................................................ 22
2.1 Revolving Loan Commitment........................................ 22
2.2 LC Commitment.................................................... 23
2.3 Commitments and Other Terms...................................... 23
2.4 Canadian Dollar Loans............................................ 23
SECTION 3. THE LOANS...................................................... 24
3.1 Various Types of Loans........................................... 24
3.2 Notice of Borrowing.............................................. 24
3.3 Funding.......................................................... 24
3.4 Funding Reliance................................................. 25
3.5 Conversion and Continuation of Loans............................. 25
3.6 Repayment of Revolving Loans; Notes.............................. 27
3.7 Recordkeeping.................................................... 27
SECTION 4. THE LETTERS OF CREDIT.......................................... 27
4.1 Request for Issuance of Letters of Credit........................ 27
4.2 Expiration and other Terms....................................... 28
4.3 Participation.................................................... 28
4.4 Notification of Demand for Payment............................... 28
4.5 Funding by Administrative Agent.................................. 28
4.6 Funding By Lenders............................................... 28
4.7 Non-Conforming Demand For Payment................................ 29
4.8 Return of Funds Related to Non-Conforming Demand................. 29
4.9 Return of Letter of Credit....................................... 29
4.10 Reimbursement Agreement of the Parent........................... 30
4.11 Obligation to Reimburse for or Participate in Letter of
Credit Payments................................................. 30
4.12 Mandatory Payment to Administrative Agent of LC Obligations..... 31
4.13 Existing Letters of Credit...................................... 31
4.14 Limited Participation and Funding of Letters of Credit.......... 32
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SECTION 5. INTEREST AND FEES, ETC......................................... 32
5.1 Interest Rates................................................... 32
5.2 Default Interest Rate............................................ 33
5.3 Interest Payment Dates........................................... 33
5.4 Interest Periods................................................. 34
5.5 Setting and Notice of Rates...................................... 34
5.6 Computation of Interest.......................................... 34
5.7 Fees............................................................. 34
SECTION 6. REDUCTION OR TERMINATION OF THE COMMITMENTS; PAYMENTS AND
PREPAYMENTS............................................... 37
6.1 Voluntary Reduction or Termination of the Revolving Loan
Commitments...................................................... 37
6.2 Voluntary Reduction of the LC Commitments........................ 37
6.3 Voluntary Prepayments............................................ 37
6.4 Making of Payments............................................... 37
6.5 Due Date Extension............................................... 38
6.6 Sharing of Payments.............................................. 38
6.7 Setoff........................................................... 39
6.8 Net Payments..................................................... 39
SECTION 7. CHANGES IN CIRCUMSTANCES....................................... 40
7.1 Increased Costs.................................................. 40
7.2 Change in Rate of Return......................................... 41
7.3 Basis for Determining Interest Rate Inadequate or Unfair......... 42
7.4 Changes in Law Rendering Certain Loans Unlawful.................. 43
7.5 Funding Losses................................................... 43
7.6 Right of Lenders to Fund Through Other Offices................... 43
7.7 Discretion of Lenders as to Manner of Funding.................... 44
7.8 Conclusiveness of Statements; Survival of Provisions............. 44
7.9 Alternative Lending Office....................................... 44
SECTION 8. COLLATERAL AND OTHER SECURITY.................................. 44
8.1 Security Documents............................................... 44
8.2 Termination...................................................... 46
8.3 Further Assurances............................................... 46
SECTION 9. REPRESENTATIONS AND WARRANTIES................................. 46
9.1 Organization, etc. .............................................. 47
9.2 Authorization.................................................... 47
9.3 No Conflict...................................................... 47
9.4 Governmental Consents............................................ 47
9.5 Validity......................................................... 48
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9.6 Financial Statements............................................ 48
9.7 Material Adverse Change......................................... 48
9.8 Litigation and Contingent Obligations........................... 48
9.9 Liens........................................................... 48
9.10 Subsidiaries.................................................... 49
9.11 Pension and Welfare Plans....................................... 49
9.12 Investment Company Act.......................................... 50
9.13 Public Utility Holding Company Act.............................. 50
9.14 Margin Regulation............................................... 50
9.15 Collateral...................................................... 50
9.16 Taxes........................................................... 50
9.17 Accuracy of Information......................................... 51
9.18 Environmental Warranties........................................ 51
9.19 Proceeds........................................................ 52
9.20 Insurance....................................................... 52
9.21 Securities Laws................................................. 53
9.22 Governmental Authorizations..................................... 53
9.23 Representations in Other Agreements True and Correct............ 53
9.24 Business Locations; Trade Names................................. 53
9.25 Solvency........................................................ 53
9.26 Title IV Compliance............................................. 53
9.27 No Burdensome Restrictions...................................... 55
9.28 Copyrights, Patents, Trademarks and Licenses, etc. ............. 56
9.29 Title to Assets; Leases......................................... 56
9.30 Labor Disputes.................................................. 56
9.31 Year 2000....................................................... 56
SECTION 10. AFFIRMATIVE COVENANTS......................................... 57
10.1 Reports, Certificates and Other Information..................... 57
10.2 Corporate Existence; Foreign Qualification...................... 62
10.3 Books, Records and Inspections.................................. 62
10.4 Insurance....................................................... 62
10.5 Taxes and Liabilities........................................... 62
10.6 Pension Plans and Welfare Plans................................. 63
10.7 Compliance with Laws............................................ 63
10.8 Title IV Compliance............................................. 63
10.9 Maintenance of Permits.......................................... 65
10.10 Environmental Compliance....................................... 66
SECTION 11. NEGATIVE COVENANTS............................................ 66
11.1 Limitation on Indebtedness...................................... 66
11.2 Liens........................................................... 67
11.3 Consolidation, Merger, etc. .................................... 68
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11.4 Asset Disposition, etc. ........................................ 69
11.5 Dividends, etc. ................................................ 69
11.6 Investments..................................................... 70
11.7 Rental Obligations.............................................. 70
11.8 Subordinated Debt............................................... 70
11.9 Take or Pay Contracts........................................... 71
11.10 Regulation U.................................................... 71
11.11 Subsidiaries.................................................... 71
11.12 Other Agreements................................................ 72
11.13 Business Activities............................................. 72
11.14 Change of Location or Name...................................... 72
11.15 Transactions with Affiliates.................................... 73
11.16 Limitation on Sales and Leasebacks.............................. 73
11.17 Modification of Certain Documents............................... 73
SECTION 12. FINANCIAL COVENANTS........................................... 73
12.1 Minimum Interest Coverage Ratio................................. 73
12.2 Maximum Leverage Ratio.......................................... 74
12.3 Minimum Net Worth............................................... 74
SECTION 13. CONDITIONS.................................................... 74
13.1 Initial Borrowing............................................... 74
13.2 Conditions of each Letter of Credit............................. 76
13.3 All Loans and Letters of Credit................................. 76
13.4 Loans for Permitted Acquisitions................................ 77
SECTION 14. EVENTS OF DEFAULT AND THEIR EFFECT............................ 77
14.1 Events of Default............................................... 77
14.2 Effect of Event of Default...................................... 80
SECTION 15. THE ADMINISTRATIVE AGENT AND FOREIGN CURRENCY AGENT
15.1 Authorization and Action........................................ 80
15.2 Liability of the Administrative Agent........................... 81
15.3 LaSalle and Affiliates.......................................... 82
15.4 Lender Credit Decision.......................................... 82
15.5 Indemnification................................................. 82
15.6 Successor Administrative Agent or Foreign Currency Agent,
as the case may be.............................................. 83
15.7 Collateral Matters.............................................. 84
SECTION 16. ASSIGNMENTS AND PARTICIPATIONS................................ 84
16.1 Assignments..................................................... 84
16.2 Participations.................................................. 86
16.3 Disclosure of Information....................................... 86
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16.4 Foreign Transferees............................................. 87
SECTION 17. MISCELLANEOUS................................................. 88
17.1 Waivers and Amendments.......................................... 88
17.2 Notices......................................................... 88
17.3 Regulation U.................................................... 89
17.4 Payment of Costs and Expenses................................... 89
17.5 Indemnity....................................................... 90
17.6 Subsidiary References........................................... 90
17.7 Captions........................................................ 90
17.8 Governing Law................................................... 90
17.9 Counterparts.................................................... 91
17.10 SUBMISSION TO JURISDICTION; WAIVER OF VENUE..................... 91
17.11 Service of Process.............................................. 92
17.12 WAIVER OF JURY TRIAL............................................ 92
17.13 Successors and Assigns.......................................... 92
17.14 Judgment Currency............................................... 93
17.15 Joint and Several Liability..................................... 94
SCHEDULES AND EXHIBITS
SCHEDULES
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SCHEDULE 2.1 Schedule of Lenders and Percentages
SCHEDULE 4.13 Existing Letters of Credit
SCHEDULE 9.1 Stockholders
SCHEDULE 9.6 Financial Statements
SCHEDULE 9.8 Material Litigation
SCHEDULE 9.10 Subsidiaries
SCHEDULE 9.11 ERISA
SCHEDULE 9.15 Collateral
SCHEDULE 9.16 Taxes
SCHEDULE 9.18 Environmental Warranties
SCHEDULE 9.20 Insurance
SCHEDULE 9.24 Business Locations; Trade Names
SCHEDULE 9.26(c) Title IV Compliance Information
SCHEDULE 9.26(f) Title IV Compliance Disclosure
SCHEDULE 9.26(g) Cohort Default Rate
SCHEDULE 9.28 Intellectual Property
SCHEDULE 9.29 Material Leases
SCHEDULE 11.1 Indebtedness
SCHEDULE 11.2 Liens
SCHEDULE 11.6 Investments
SCHEDULE 11.11 Guarantors
EXHIBITS
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EXHIBIT A Form of Revolving Note
EXHIBIT B Form of Borrowing Request
EXHIBIT C Form of Continuation/Conversion Notice
EXHIBIT D Form of LC Application
EXHIBIT E Form of Affirmation of Borrower Pledge Agreement
EXHIBIT F Form of Affirmation of Xxxxx Pledge Agreement
EXHIBIT G Form of Affirmation of Subsidiary Guaranty
EXHIBIT H Form of Officer's Certificate
EXHIBIT I Form of Compliance Certificate
EXHIBIT J-1 Form of Opinion of Katten, Muchin & Zavis, counsel to the Parent
and its domestic Subsidiaries
EXHIBIT J-2 Form of Opinion of Fraser & Xxxxxx, counsel to the Co-Borrowers
EXHIBIT J-3 Form of Opinion of McMaster Gervais, counsel to the Co-Borrowers
EXHIBIT K Form of Assignment Agreement
EXHIBIT L Form of Financing Request
EXHIBIT M Form of Affirmation of IAMD (Canada) Pledge Agreement
EXHIBIT N Form of Affirmation of IAMD, Limited Pledge Agreement
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 26, 1998,
is made by and among CAREER EDUCATION CORPORATION, a Delaware corporation (the
"Parent"), ACADEMIE INTERNATIONALE dU DESIGN INC., a Quebec corporation ("IAMD-
Montreal") and INTERNATIONAL ACADEMY OF MERCHANDISING & DESIGN (CANADA) LTD., an
Ontario corporation ("IAMD (CANADA)"; and together with IAMD Montreal
collectively called the "Co-Borrowers"), the lenders party hereto (herein,
together with any Eligible Assignees thereof, collectively called the "Lenders",
and each individually called a "Lender"), LASALLE NATIONAL BANK ("LaSalle"), as
administrative agent for the Lenders (herein, in such capacity, together with
any successor thereto in such capacity, called the "Administrative Agent"), and
THE BANK OF NOVA SCOTIA ("Scotia Bank"), as foreign currency agent for the
Lenders (herein, in such capacity, together with any successor thereto in such
capacity, called the "Foreign Currency Agent").
Background
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1. The Parent, the Administrative Agent and certain of the Lenders are
parties to that certain Credit Agreement dated as of May 30, 1997 (as heretofore
amended or modified, the "Original Credit Agreement") pursuant to which the
Lenders made loans and issued, or participated in the issuance of, Letters of
Credit for the account of the Parent from time to time.
2. The Parent, the Co-Borrowers, the Administrative Agent, the Foreign
Currency Agent and the Lenders now desire to amend and restate the Original
Credit Agreement to, among other things, (i) extend the Revolving Loan
Termination Date, (ii) decrease the Revolving Commitment Amount, and (iii)
provide for the making of Loans and issuance of Letters of Credit denominated in
Canadian Dollars.
NOW, THEREFORE, in consideration of the mutual promises herein contained
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Accrediting Body" shall mean, with respect to any Educational Institution,
any entity or organization, whether governmental, government-chartered, inter-
governmental, private or quasi-private, which engages in granting or withholding
licensing, accreditation or similar approval for such Educational Institution,
in accordance with standards relating to the performance, operation, financial
condition and/or academic standing of private post-secondary schools, including,
without limitation, as applicable, the Accrediting Commission of Career Schools
and Colleges of Technology, the Accrediting Council for Independent Colleges and
Schools and the Western Association of Schools and Colleges.
"Acquired Person" shall mean any Person acquired or the Person holding the
assets acquired upon the consummation of an Acquisition permitted by the terms
of this Agreement.
"Acquisition" shall mean any transaction or series of transactions for the
purpose of or resulting, directly or indirectly, in (a) the acquisition (in one
or a series of related transactions) of all or substantially all of the assets
of a Person, or of any business or division of a Person, (b) the acquisition (in
one or a series of related transactions) of in excess of 50% of the capital
stock, partnership interests, membership interests or other equity securities of
any Person, or otherwise causing any Person to become a Subsidiary of the
Parent, or (c) a merger or consolidation or any other combination of the Parent
or one of its Subsidiaries with another Person (other than a Person that is a
Subsidiary of the Parent immediately prior to such merger or consolidation);
provided that the Parent or such Subsidiary, as the case may be, is the
surviving entity (unless otherwise consented to by the Administrative Agent), in
each case subject to and to the extent permitted by the terms of this Agreement.
"Administrative Agent" shall mean LaSalle in its capacity as administrative
agent for the Lenders hereunder, and any successor administrative agent in
accordance with the terms of Section 15.6.
"Affected Lender" - see Section 7.4.
"Affiliate" of any Person shall mean any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any commitment with responsibility for
administering, any Pension Plan). A Person shall be deemed to be "controlled
by" any other Person if such other Person possesses, directly or indirectly,
power (a) to vote 5% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managing general
partners; or (b) to direct or cause the direction of the management and policies
of such Person whether through the ownership of voting securities, membership
interests, by contract, or otherwise.
"Agreement" shall mean this Amended and Restated Credit Agreement, as
hereafter amended, modified, restated, refinanced, refunded or renewed from time
to time in whole or in part.
"Applicable Base/Prime Rate Margin" - see Section 5.1.
"Applicable Currency" shall mean, as to any particular payment or Loan,
Dollars or Canadian Dollars in which it is denominated or is payable.
"Applicable LIBOR Rate Margin" - see Section 5.1.
"Assignment Agreement" - see Section 16.1.
"Base Rate" shall mean, for any day, a fluctuating rate of interest per
annum equal to the greater of (a) the rate of interest in effect for such day as
publicly announced from time to time by LaSalle in Chicago, Illinois, as its
"prime rate", or (b) a rate of interest per annum (rounded upward to the next
higher 1/16th of 1% if not already an integral multiple of 1/16th of 1%) equal
to the Federal Funds Rate in effect at the commencement of business on such day
plus 1/2% per annum. The "prime rate" is a rate of interest set by LaSalle
based upon various factors including LaSalle's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
If for any reason the Administrative Agent shall have determined (which
determination shall be conclusive in the absence of manifest error) that it is
unable to ascertain the Federal Funds Rate for any reason (including, without
limitation, the inability or failure of the Administrative Agent to obtain
sufficient bids or publications in accordance with the terms hereof), the Base
Rate shall be
determined in accordance with clause (a) of this definition until the
circumstances giving rise to such inability no longer exist.
"Base Rate Loan" shall mean any Loan which bears interest at or by
reference to the Base Rate.
"Beneficiary" shall mean the beneficiary under any Letter of Credit.
"Borrower Pledge Agreement" - see Section 8.1.
"Borrowing" shall mean a borrowing hereunder consisting of Loans made to
the Parent or, with respect to any Canadian Dollar Loan, a Co-Borrower at the
same time by the Lenders pursuant to Section 2, and with respect to LIBOR Rate
Loans having the same Interest Period. A Borrowing may be a Base Rate
Borrowing, a LIBOR Rate Borrowing or, with respect to any Canadian Dollar Loan,
a Prime Rate Borrowing.
"Borrowing Request" - see Section 3.2.
"Business Day" shall mean: (a) in the case of a Business Day which relates
to a LIBOR Rate Loan, any day of the year on which banks are open for business
in Chicago, Illinois and on which dealings are carried on in the London
eurodollar market; (b) in the case of a Business Day which relates to a Base
Rate Loan, any day of the year on which banks are open for business in Chicago,
Illinois; and (c) in the case of a Business Day which relates to a Canadian
Dollar Loan any day of the year on which banks are open for business in Xxxxxxx,
Xxxxxxxx xxx Xxxxxxx, Xxxxxx.
"Canadian Dollar" shall mean the lawful money of Canada.
"Canadian Dollar Loan" means any Revolving Loan which is denominated in
Canadian Dollars and which bears interest at or by reference to the Prime Rate.
"Capitalized Lease Liabilities" shall mean, with respect to any Person, all
monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as a capitalized lease, and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount thereof, determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to
the first date upon which such lease may be terminated by the lessee without
payment of a penalty.
"Cash Equivalents" shall mean (a) securities with maturities of three (3)
months or less from the date of acquisition issued and fully guaranteed or
insured by the United States Government or any agency thereof, (b) certificates
of deposit, eurodollar time deposits, overnight bank deposits, bankers'
acceptances and repurchase agreements of any Lender or any other commercial bank
organized under the laws of the United States or any state thereof having
capital and surplus and undivided profits aggregating at least $250,000,000 and
whose unsecured long-term debt obligations are rated at least A-1 by S&P or A3
by Xxxxx'x having maturities of three (3) months or less from the date of
acquisition, and (c) commercial paper rated at least A-1 by S&P or P-1 by
Xxxxx'x.
"CEC Management" shall mean CEC Management, Inc., an Illinois corporation.
"CERCLA" shall mean the Comprehensive Environmental Response Compensation
and Liability Act of 1980, as amended.
"CERCLIS" shall mean the Comprehensive Environmental Response Compensation
Liability Information System List.
"C.F.R." shall mean the Code of Federal Regulations.
"Change in Control" shall mean the time at which (a) any Person (including
a Person's Affiliates and associates) or group (as that term is understood under
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules
and regulations thereunder), other than the Control Group, has become the
beneficial owner of a percentage (based on voting power, in the event different
classes of stock shall have different voting powers) of the voting stock of the
Parent greater than twenty-five percent (25%), (b) the Control Group no longer
has the ability to control the appointment or election of a majority of the
directors of the Parent, (c) there shall be consummated any consolidation or
merger of the Parent or any of its Subsidiaries pursuant to which the Parent's
or such Subsidiary's common stock (or other capital stock) would be converted
into cash, securities or other property, other than a merger or consolidation of
the Parent or such Subsidiary in which the holders of such common stock (or such
other capital stock) immediately prior to the merger have the same proportionate
ownership, directly or indirectly, of common stock of the surviving corporation
immediately after the merger as they had of the Parent's or such Subsidiary's
common stock immediately prior to such merger, (d) all or substantially all of
the Parent's or any of its Subsidiary's assets shall be sold, leased, conveyed
or otherwise disposed of as an entirety or substantially as an entirety to any
Person (including an Affiliate or associate of the Parent or its Subsidiaries)
in one or a series of transactions, (e) Xxxx X. Xxxxxx shall cease to perform
his duties as President and CEO of the Parent, unless within one hundred and
twenty (120) days thereafter, a replacement for him acceptable to the
Administrative Agent (in its reasonable judgment) is found, unless the Parent is
diligently pursuing appointment of a replacement chief executive officer, but in
any event such replacement is appointed within 150 days, or (f) the Parent
ceases to own free and clear of all Liens (other than Permitted Liens), at least
100% of the outstanding shares of voting stock of any of its Subsidiaries
existing on the Restatement Effective Date on a fully diluted basis and, with
respect to any Subsidiary created or acquired after the Restatement Effective
Date, at least 66-2/3% of the outstanding shares of voting stock of such
Subsidiary on a fully diluted basis, except in connection with a disposition
permitted by Section 11.3.
"Charges" - see Section 6.8.
"Closing Date" shall mean May 30, 1997.
"Co-Borrower(s)" - see Preamble.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall mean all of the collateral security described or
provided for in Section 8 together with all property and/or rights on or in
which a Lien is now or hereafter granted by any Person to the Administrative
Agent (or to any agent, trustee or other party acting on behalf of the
Administrative Agent), for the benefit of the Lenders, pursuant to the Borrower
Pledge Agreement, the Xxxxx Pledge Agreement, the IAMD, Limited Pledge
Agreement, the IAMD (Canada) Pledge Agreement, the Subsidiary Guaranty or any
other instruments or documents provided for herein or delivered hereunder or in
connection herewith or therewith.
"Commitment Fee" - see Section 5.7(a).
"Commitments" - see Section 2.3.
"Compliance Certificate" - see Section 10.1.4.
"Compliance Reports" - see Section 9.27(f).
"Consolidated Capital Expenditures" shall mean, for any period, the capital
expenditures of the Parent and its Subsidiaries for such period, as the same are
(or would in accordance with GAAP be) set forth in the consolidated statement of
changes in financial position of the Parent and its Subsidiaries for such
period, and including in any event the amount of any Investment during such
period pursuant to Sections 11.6(d) and 11.6(e).
"Consolidated EBITDA" shall mean, for any period, Consolidated Net Income
for such period, plus (a) Consolidated Interest Expense for such period, plus
(b) the aggregate amounts deducted in determining Consolidated Net Income in
respect of (i) cash Income Taxes paid, (ii) depreciation and amortization, and
(iii) interest income, less (c) any Non-Recurring Items.
"Consolidated Interest Expense" shall mean, for any period, the aggregate
interest expense (net of interest income) of the Parent and its Subsidiaries for
such period including, without limitation, (a) the portion of any obligation
under Capital Leases allocable to interest expense in accordance with GAAP, and
(b) the portion of any debt discount that shall be amortized in such period.
"Consolidated Net Income" shall mean, for any period, the consolidated net
income (or loss) of the Parent and its Subsidiaries for such period.
"Consolidated Net Worth" shall mean the consolidated net worth of the
Parent and its Subsidiaries as determined in accordance with GAAP.
"Contingent Obligation" shall mean any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the debt,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation under any Contingent Obligation shall (subject to any
limitation set forth therein) be deemed to be the outstanding principal amount
(or maximum outstanding principal amount, if larger) of the debt, obligation or
other liability guaranteed thereby.
"Continuation/Conversion Notice" - see Section 3.5.
"Control Group" shall mean, the Parent, the Management Stockholders, and
Affiliates thereof.
"Controlled Group" shall mean all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Parent, are treated as a single employer under section 414(b) or section 414(c)
of the Code or section 4001 of ERISA. For purposes of this definition, the term
Parent shall be deemed to include any and all Subsidiaries of the Parent.
"Default" shall mean any condition or event which with the giving of notice
or lapse of time or both would, unless cured or waived, become an Event of
Default.
"Disposition" - see Section 6.4(b).
"DOE" shall mean the United States Department of Education and any
successor agency administering federal student financial assistance under Title
IV.
"Dollar Equivalent" shall mean, at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to any
amount denominated in Canadian Dollars, the equivalent amount in Dollars as
determined by the Foreign Currency Agent at such time on the basis of the Spot
Rate for the purchase of Dollars with Canadian Dollars.
"Dollars" and the sign "$" shall mean lawful money of the United States of
America.
"Educational Institution" shall mean each of the Subsidiaries of the Parent
(other than CEC Management, International Academy of Merchandising & Design,
Ltd., Market Direct and Xxxxx) and any other Acquired Person acquired after the
Restatement Effective Date pursuant to a Permitted Acquisition, in each case,
which constitutes an Eligible Facility and satisfies clauses (c)-(e) of the
definition of Permitted Acquisition.
"Effective Date" shall mean May 30, 1997.
"Eligible Assignee" shall mean any bank (including, without limitation, any
Federal Reserve Bank), insurance company, pension fund, mutual fund, investment
fund, or other financial institution.
"Eligible Facility" shall mean a vocational or similar educational
institution or any institution involved in the offering of short-term or long-
term educational corporate seminar training.
"Environmental Laws" shall mean all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use matters.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Eurocurrency Reserve Percentage" shall mean, with respect to any LIBOR
Rate Loan for any Interest Period, a percentage (expressed as a decimal) equal
to the daily average during such Interest Period, as prescribed by the Federal
Reserve Board, for determining the aggregate maximum reserve requirements
(including all basic, supplemental, marginal and other reserves) applicable to
"Eurocurrency liabilities" pursuant to Regulation D or any other then-applicable
regulation of the Federal Reserve Board which prescribes reserve requirements
applicable to "Eurocurrency liabilities," as defined in Regulation D, as
applicable to the class of banks of which the Administrative Agent is a member.
Without limiting the effect of the foregoing, the Eurocurrency Reserve
Percentage shall reflect any other reserves required to be maintained by the
Administrative Agent against (a) any category of liabilities that includes
deposits by reference to which the LIBOR Rate (Reserve Adjusted) is to be
determined, or (b) any category of extensions of credit or other assets that
includes LIBOR Rate Loans. For purposes of this Agreement, any LIBOR Rate Loan
hereunder shall be deemed to be "Eurocurrency liabilities," as defined in
Regulation D, and, as such, shall be deemed to be subject to such reserve
requirements without the benefit of, or credit for, proration, exceptions or
offsets which may be available to the Administrative Agent from time to time
under Regulation D.
"Event of Default" shall mean any of the events described in Section 14.1.
"Existing Letters of Credit" shall mean each letter of credit listed on
Schedule 4.13.
"Existing Revolving Note(s)" shall mean, collectively, the promissory notes
evidencing Revolving Loans issued under the Original Credit Agreement prior to
the Restatement Effective Date.
"Federal Funds Rate" shall mean, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Administrative Agent of the rates for the
last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York City time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrative Agent.
"Fiscal Quarter" or "FQ" shall mean any fiscal quarter of a Fiscal Year.
"Fiscal Year" or "FY" shall mean any period of twelve consecutive calendar
months ending on December 31; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1996 Fiscal Year") refer to the
Fiscal Year ending on the December 31 occurring during such calendar year.
"FX Trading Office" means the Toronto, Canada office of the Foreign
Currency Agent, or such other of the Foreign Currency Agent's offices as it may
designate from time to time.
"GAAP" - see Section 1.3.
"Xxxxx" shall mean The Xxxxxxxxx Xxxxx Schools, Inc.
"Xxxxx Pledge Agreement" - see Section 8.1.
"Guarantor" shall mean collectively, (or individually each a "Guarantor")
each of the entities set forth on Schedule 11.11,
and any other Subsidiary of the Parent that becomes a guarantor pursuant to
Section 11.11.
"Hazardous Material" shall mean: (a) any "hazardous substance," as defined
by CERCLA; (b) any "hazardous waste," as defined by the Resource Conservation
and Recovery Act, as amended; (c) any petroleum product; or (d) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material or substance
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended or hereafter amended.
"Hedging Obligations" shall mean, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements or agreements designed to
protect such Person against fluctuations in interest rates or currency exchange
rates, net of any payment obligations owed by the issuer of any such agreements
to such Person.
"IAMD (Canada)" - see Preamble.
"IAMD-Montreal" - see Preamble.
"IAMD (Canada) Pledge Agreement" shall mean that certain pledge agreement
dated as of June 30, 1997 between IAMD (Canada) and the Administrative Agent
whereby IAMD (Canada) pledged the capital stock of its Subsidiaries to the
Administrative Agent under the Original Credit Agreement.
"IAMD, Limited Pledge Agreement" shall mean that certain pledge agreement
dated as of June 30, 1997 between IAMD, Limited and the Administrative Agent
whereby IAMD, Limited pledged all the capital stock of its subsidiaries to the
Administrative Agent under the Original Credit Agreement.
"Income Taxes" shall mean, with respect to any Person, any Taxes in which
the base is measured by net income of such Person.
"Indebtedness" shall mean, with respect to any Person at any date, without
duplication: (a) all obligations of such Person for borrowed money or in
respect of loans or advances; (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments including, without
limitation, all
obligations comprising Subordinated Debt of such Person; (c) all obligations in
respect of letters of credit, whether or not drawn, and bankers' acceptances
issued for the account of such Person; (d) all Capitalized Lease Liabilities of
such Person; (e) all Hedging Obligations of such Person; (f) all obligations of
such Person secured by a contractual lien; (g) all trade payables of such Person
which are more than thirty (30) days past due; (h) all obligations of such
Person with respect to operating leases; (i) all other items (exclusive of
negative goodwill) which, in accordance with GAAP, would be included as
liabilities on the liability side of the balance sheet of such Person; (j)
whether or not so included as liabilities in accordance with GAAP, all
obligations of such Person to pay the deferred purchase price of property or
services and Indebtedness secured by a Lien on property owned or being purchased
by such Person (including Indebtedness arising under conditional sales or other
title retention agreements) whether or not such Indebtedness shall have been
assumed by such Person or is limited in recourse; (k) all Contingent Obligations
of such Person whether or not in connection with the foregoing.
"Interest Coverage Ratio" shall mean, for any period, the ratio of
Consolidated EBITDA for such period minus depreciation and amortization for such
period, to Consolidated Interest Expense for such period plus any accrued fees
under this Agreement payable during such period.
"Interest Payment Date" shall mean, as to any LIBOR Rate Loan, the last day
of each Interest Period applicable to such Loan and each date such Loan is
converted into another Type of Loan and, as to any Base Rate Loan or Canadian
Dollar Loan, the last Business Day of each Quarterly Payment Date; provided,
however, that if any Interest Period for a LIBOR Rate Loan exceeds three (3)
months, the date that falls three (3) months after the beginning of such
Interest Period and after each Interest Payment Date thereafter is also an
Interest Payment Date.
"Interest Period" - see Section 5.4.
"Investment" shall mean any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"LaSalle" shall mean LaSalle National Bank, a national banking association
having its principal place of business at 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, in its individual capacity.
"LaSalle Fee Letter" - see Section 5.7(d).
"LC Administrative Fees" - see Section 5.7(c).
"LC Application" - see Section 4.1.
"LC Commitment Fee" - see Section 5.7(b).
"LC Commitments" - see Section 2.5.
"LC Obligations" shall mean any and all obligations of every description of
the Parent or any of its Subsidiaries in connection with the Letters of Credit
issued pursuant to this Agreement, including without limitation all
reimbursement obligations (whether absolute or contingent) under any LC
Application, and all obligations in respect of related fees or expenses.
"Lenders" or "Lender" - see Preamble.
"Lending Office" shall mean, with respect to any Lender, any office
designated by such Lender in its sole discretion beneath its signature hereto
(or in an Assignment Agreement) or otherwise from time to time by written notice
to the Parent and the Administrative Agent, as a Lending Office for purposes
hereunder. A Lender may designate separate Lending Offices for the purposes of
making, maintaining or continuing Base Rate Loans, Canadian Dollar Loans or
LIBOR Rate Loans and, with respect to LIBOR Rate Loans, such Lending Office may
be a foreign branch or an Affiliate of such Lender or such Lender's holding
company.
"Letters of Credit" - see Section 2.2.
"Leverage Ratio" shall mean, with respect to any period, the ratio of (a)
the aggregate of all Senior Funded Debt of the Parent and its Subsidiaries for
such period, to (b) Consolidated EBITDA for such period.
"Liabilities" shall mean all obligations of the Parent and/or any of its
Subsidiaries to the Lenders (or any of their Affiliates), the Administrative
Agent and the Foreign Currency Agent howsoever created, arising or evidenced,
whether direct or indirect, joint or several, absolute or contingent, or now or
hereafter existing, or due or to become due, which arise out of
or in connection with (a) this Agreement, the Notes, the Letters of Credit or
the other Related Documents, or (b) any agreement entered into by the Parent or
any of its Subsidiaries with respect to any Hedging Obligation.
"LIBOR Rate" shall mean, with respect to any LIBOR Rate Loan for any
Interest Period, the rate per annum equal to the average (rounded upward, if
necessary, to the next higher 1/16th of 1%) of the respective rates notified to
the Administrative Agent by LaSalle as the rate per annum at which deposits in
the Applicable Currency in immediately available funds are offered to the
Lending Office of the Administrative Agent used for quoting such LIBOR Rates two
Business Days prior to the beginning of such Interest Period by prime banks in
the London eurodollar market at their request at approximately 11:00 A.M.
(London time), for delivery on the first day of such Interest Period, for the
number of days comprised therein and in an amount equal or comparable to the
amount of the LIBOR Rate Loan of the Administrative Agent for such Interest
Period.
"LIBOR Rate Loan" shall mean any Loan which bears interest at a rate
determined by reference to the LIBOR Rate (Reserve Adjusted).
"LIBOR Rate (Reserve Adjusted)" shall mean, with respect to any LIBOR Rate
Loan for any Interest Period, a rate per annum (rounded upward, if necessary, to
the nearest 1/16th of 1%) determined pursuant to the following formula:
LIBOR Rate = LIBOR Rate
----------
(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
"Lien" shall mean any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), claim
or other priority or preferential arrangement of any kind or nature whatsoever.
"Litigation" shall mean any litigation, proceeding (including, without
limitation, any governmental proceeding or arbitration proceeding), claim,
lawsuit, and/or investigation pending or threatened against or involving the
Parent or any of its Subsidiaries or any of its or their businesses or
operations.
"Loans" - see Section 2.3.
"Management Stockholders" shall mean those stockholders of the Parent or
any of its Subsidiaries who are management employees of the Parent.
"Market Direct" shall mean Market Direct, Inc., an Illinois corporation.
"Material Adverse Change" or "Material Adverse Effect" shall mean any
change, event, action, condition or effect which individually or in the
aggregate (a) impairs the validity or enforceability of this Agreement, or any
Related Document, or (b) subjects any officer of the Parent or any of its
Subsidiaries to criminal liability, or (c) materially and adversely affects the
consolidated business, operations, prospects or financial condition of the
Parent and its Subsidiaries, taken as a whole, or (d) impairs the ability of the
Parent or any of its Subsidiaries to perform its respective obligations under
this Agreement and the Related Documents, or (e) materially adversely affects
the perfection or priority of any Lien granted under any Related Document.
"Material Litigation" or "Material Litigation Development" shall mean any
Litigation, or development in any Litigation, as the case may be (a) which
involves this Agreement, any Related Document or other transactions contemplated
hereby, or (b) which could reasonably be expected to have a Material Adverse
Effect.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Net Proceeds" shall mean, with respect to the disposition of any asset by
any Person, the aggregate amount of cash and readily marketable Cash Equivalents
received by such Person in respect of such disposition minus the sum of (a)
reasonable costs and expenses (including costs of discontinuance and Taxes other
than Income Taxes) incurred in connection with such disposition and required to
be paid in cash, (b) the estimated Income Tax to be paid by such Person in
connection with such disposition, and (c) any reserves required in accordance
with GAAP relating to any liabilities assumed or incurred by the Parent in
connection with any transaction resulting in Net Proceeds. For purposes of this
definition, the Net Proceeds received by any Person in respect of any
disposition shall include such Cash Equivalents as may be received ("subsequent
cash proceeds") by such Person at any time or from time to time in connection
with the sale, transfer, lease or other disposition, or otherwise in respect of,
any consideration other than cash or readily marketable Cash Equivalents
received by such Person in respect of such
disposition, less the estimated Taxes and Income Tax to be paid in connection
with the receipt of such subsequent cash proceeds that were not theretofore
deducted in computing Net Proceeds.
"Non-Recurring Items" shall mean any of the following items of gain or loss
to the extent reflected in the determination of Consolidated Net Income for any
period: (a) extraordinary gains and losses under GAAP, and/or amortization of
fees and expenses incurred in connection with the transaction in an aggregate
amount and (b) write-downs or write-offs of assets.
"Notes" shall mean, collectively, the Revolving Notes, together with any
promissory note issued and accepted by any Lender in replacement of or
substitution for any Revolving Note.
"Original Credit Agreement" - see first recital.
"Overnight Rate" shall mean, for any day, the rate of interest per annum at
which overnight deposits in Canadian Dollars, in an amount approximately equal
to the Dollar amount with respect to which such rate is being determined, would
be offered for such day by the Foreign Currency Agent to major banks in the
London or other applicable offshore interbank market.
"Parent" - see Preamble.
"Pension Plan" shall mean a "pension plan," as such term is defined in
section 3(2) of ERISA (including a multiemployer plan as defined in section
4001(a)(3) of ERISA), to which the Parent or any corporation, trade or business
that is, along with the Parent, a member of a Controlled Group, may have
liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding six years, or by reason of being deemed to be a contributing sponsor
under section 4069 of ERISA. For purposes of this definition, the term Parent
shall be deemed to include any and all Subsidiaries of the Parent.
"Percentage" shall mean, relative to any Lender, the percentage set forth
opposite such Lender's name on Schedule 2.1 (or set forth in an Assignment
Agreement), as such Percentage may be adjusted from time to time pursuant
Section 2.1 or pursuant to Assignment Agreement(s) executed by such Lender and
its Eligible Assignee and delivered pursuant to Section 16.1.
"Permitted Acquisition" shall mean an Acquisition on or after the
Restatement Effective Date which meets all of the following requirements:
(a) neither the Person being acquired nor its board of directors shall
have (i) announced that it will oppose such Acquisition or (ii) commenced
any litigation which alleges that such Acquisition or any other acquisition
involving the Parent or any of its Subsidiaries violates, or will violate,
any applicable law;
(b) the Person being acquired is an Eligible Facility or a holding
company therefor and must demonstrate positive Consolidated EBITDA for the
12 month period immediately prior to the Acquisition;
(c) prior to its Acquisition by the Parent or any of its Subsidiaries,
the Eligible Facility is and, subject to receipt of approval of the
Acquisition by the DOE and/or each other applicable Accrediting Body, will
be accredited by each applicable Accrediting Body, if any, and offers
primarily associate and/or bachelor degree programs or certificate
programs;
(d) prior to its Acquisition by the Parent or any of its Subsidiaries,
the Eligible Facility, if applicable, is eligible, and after DOE review and
approval of the change of control pursuant to the Acquisition, if
applicable, will be eligible, for participation in Title IV Programs;
(e) the Acquisition of the Eligible Facility meets all conditions to
change of ownership under Title IV, if applicable;
(f) the Parent shall have given the Administrative Agent and the
Lenders at least 45 days prior notice of such Acquisition (it being
understood that the Parent and/or such Subsidiary making such Acquisition
shall promptly provide such information as the Administrative Agent or any
Lender may reasonably request regarding such Acquisition);
(g) immediately prior to and after giving effect to such Acquisition
(and the incurrence or assumption of any Indebtedness in connection
therewith), the Parent will be in pro forma compliance with each of the
financial covenants set forth in Section 12, assuming for purposes of
calculating Consolidated Net Income and related items, that
such Acquisition had occurred one year prior to the last day of the most
recently-ended Fiscal Quarter for which the Parent has delivered financial
statements pursuant to Section 10.1.1 or 10.1.2;
(h) if the total consideration (including without limitation
consideration in the form of cash, assumed liabilities, non-compete
payments or other payments, but excluding consideration paid in the form of
capital stock up to $20,000,000) to be paid to acquire such Acquired Person
is greater than $10,000,000, the Parent shall have received the prior
written consent of the Required Lenders; and
(i) the Administrative Agent shall have received (and the Parent or
the applicable Subsidiary of the Parent shall cause the duly authorized
officers of such Acquired Person to duly execute and deliver to the
Administrative Agent on behalf of such Acquired Person, to the extent
applicable): (i) a subsidiary guaranty from such Acquired Person, if
organized in the United States, and each domestic Subsidiary of such
Acquired Person and the Parent guaranteeing payment of the Liabilities;
(ii) a pledge agreement granting to the Administrative Agent, for the
benefit of the Lenders, a first priority perfected pledge of all or, if
such Acquired Person is organized outside of the United States, 66-2/3% of
the outstanding capital stock of such Acquired Person and all currently
existing and hereafter created, acquired or organized Subsidiaries of such
Acquired Person to secure payment of the Liabilities; and (iii) any and all
other agreements, financing statements and other documents necessary to
create a first priority perfected security interest in favor of the
Administrative Agent, for the benefit of the Lenders, in all or 66-2/3%, as
applicable, of the presently owned or thereafter acquired capital stock of
such Acquired Person and/or its Subsidiaries. All guaranty agreements,
pledge agreements and such other documents shall be in the form prescribed
by the Administrative Agent and acceptable to the Required Lenders.
"Permitted Asset Sale" shall mean the sale of any assets of the Parent and
its Subsidiaries in an amount not to exceed $2,500,000, in the aggregate, in any
Fiscal Year.
"Permitted Liens" - see Section 11.2.
"Person" shall mean an individual, a corporation, a partnership, a sole
proprietorship, a limited liability company
or partnership, a joint venture, an association, a trust or any other entity or
organization, including a government (whether federal, state, county, city,
municipal or otherwise, including without limitation, any political subdivision
or an agency or instrumentality thereof).
"Prime Rate" shall mean the greater of (a) the variable rate of interest
per annum equal to the rate of interest determined by the Foreign Currency Agent
from time to time as its prime rate for Canadian Dollar Loans made by the
Foreign Currency Agent in Canada from time to time, being a variable per annum
reference rate of interest adjusted automatically upon change by the Foreign
Currency Agent, calculated on the basis of a year of 365-66 days, and (b) the
sum of (i) the rate per annum for Canadian Dollar bankers' acceptance having a
term of 30 days that appears on the Reuters Screen CDOR Page as of 10:00 A.M.
(Toronto time) on the date of determination, as reported by the Foreign Currency
Agent and (ii) 5/8 of 1% per annum.
"Process Agent" - see Section 17.11.
"Qualification" shall mean, with respect to any certificate covering
financial statements, a qualification to such certificate (such as a "subject
to" or "except for" statement therein) (a) resulting from a limitation on the
scope of examination of such financial statements or the underlying data, (b) as
to the capability of the Person whose financial statements are certified to
continue operations as a going concern, or (c) which could be eliminated by
changes in financial statements or notes thereto covered by such certificate
(such as by the creation of or increase in a reserve or a decrease in the
carrying value of assets) and which if so eliminated by the making of any such
change and after giving effect thereto would occasion a Default; provided that
neither of the following shall constitute a Qualification: (i) a consistency
exception relating to a change in accounting principles with which the
independent public accountants for the Person whose financial statements are
being certified have concurred, or (ii) a qualification relating to the outcome
or disposition of threatened Litigation, pending Litigation being contested in
good faith, pending or threatened claims or contingencies which cannot be
determined with sufficient certainty to permit such financial statements to be
qualified.
"Quarterly Payment Date" shall mean the last day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"Related Documents" shall mean the Notes, the LC Applications, the Letters
of Credit, the Subsidiary Guaranty, the Borrower Pledge Agreement, the Xxxxx
Pledge Agreement, the IAMD, Limited Pledge Agreement, the IAMD (Canada) Pledge
Agreement and any and all other documents or instruments furnished or required
to be furnished pursuant to Section 8 or Section 13, as the same may be amended
or modified from time to time in whole or in part.
"Release" shall mean a "release," as such term is defined in CERCLA.
"Reportable Event" shall have the meaning assigned to such term in ERISA.
"Required Lenders" shall mean Lenders having at least 66-2/3% or more of
the Commitments, or if the Commitments have terminated or expired, 66-2/3% of
the aggregate Loans and LC Obligations outstanding at such time.
"Responsible Officer" shall mean, in the case of the Parent or any of its
Subsidiaries, any of the following officers of such Person: the president, the
chief financial officer, the secretary, the treasurer or any vice president.
If any of the titles of the preceding officers are changed after the date
hereof, the term "Responsible Officer" shall thereafter mean any officer
performing substantially the same functions as are presently performed by one or
more of the officers listed in the first sentence of this definition.
"Restatement Closing Date" shall mean the date that the initial Loans are
made under this Agreement after satisfaction of the conditions precedent set
forth in Section 13.
"Restatement Effective Date" shall mean the date of this Agreement as set
forth in the Preamble.
"Revolving Loan(s)" - see Section 2.1.
"Revolving Loan Commitment(s)" - see Section 2.2.
"Revolving Note" shall mean a promissory note, substantially in the form of
Exhibit A with blanks appropriately completed in conformity herewith, evidencing
the Revolving Loans of any Lender.
"Revolving Loan Termination Date" shall mean the earlier of (a) October 26,
2003, or (b) the date of termination in whole of the Revolving Loan Commitments
pursuant to Sections 6.1, 6.2 and/or 14.2.
"Sale Leaseback Transaction" shall mean any transaction whereby the Parent
or any of its Subsidiaries shall, directly or indirectly, enter into any
arrangement with any Person providing for the Parent or any of its Subsidiaries
to lease or rent property or other assets that the Parent or any such Subsidiary
has or will sell or otherwise transfer to such Person.
"S&P" shall mean Standard & Poor's, a Division of the McGraw Hill
Companies.
"Security Agreement" - see Section 8.1.
"Senior Funded Debt" shall mean Indebtedness as set forth in clauses (a)-
(e) of the definition of Indebtedness, excluding Subordinated Debt set forth in
clause (b) of the definition of Indebtedness.
"Solvent", as to any Person on a particular date, shall mean that on such
date (a) the fair value of the property of such Person is greater than the total
amount of liabilities, including, without limitation, contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liabilities
of such Person on its debts as they become absolute and matured, (c) such Person
is able to realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (d) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature, and (e) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of any contingent liability at
any time, it is intended that such liability will be computed at the amount
which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Spot Rate" for a currency shall mean the rate quoted by the Foreign
Currency Agent as the Spot Rate for the purchase by the Foreign Currency Agent
of such currency with another currency through its FX Trading Office at
approximately 11:00 A.M. (Chicago time) on the date two Business Days prior to
the date as of which the foreign exchange computation is made.
"Subordinated Debt" shall mean Indebtedness having payment terms and other
terms, and subordinated in form and substance, satisfactory to the Lenders.
"Subsidiary" shall mean, as to any Person, any corporation, partnership,
limited liability company, limited liability partnership, joint venture, trust,
association or other unincorporated organization (other than a limited
partnership in which such Person acts solely as a limited partner) of which or
in which such Person and such Person's Subsidiaries own directly or indirectly
an aggregate of more than 50% of (a) the combined voting power of all classes of
stock having general voting power under ordinary circumstances to elect a
majority of the board of directors, if it is a corporation, (b) the capital
interest or partnership interest, if it is a partnership, joint venture or
similar entity, or (c) the beneficial interest, if it is a trust, association or
other unincorporated organization.
"Subsidiary Guaranty" - see Section 8.1
"Taxes" shall mean all taxes of any nature whatsoever and however
denominated, including, without limitation, excise, import, governmental fees,
duties and all other charges, as well as additions to tax, penalties and
interest thereon, imposed by any government or instrumentality, whether federal,
state, local, foreign or other.
"Title IV" shall mean Chapter 28, Subchapter IV of the Higher Education Act
of 1965, as amended, 20 U.S.C.A. (S)1070, and any amendments or successor
statutes thereto.
"Title IV Programs" shall mean the Title IV Programs as defined in Section
668.1(c) of 34 C.F.R.
"Transferee" - see Section 16.3.
"Type of Loan or Borrowing" - see Section 3.1. The various Types of Loans
or Borrowings under this Agreement are as follows: Base Rate Loans or
Borrowings, Canadian Dollar Loans or Borrowings, and LIBOR Rate Loans or
Borrowings.
"UCC" shall mean the Uniform Commercial Code or comparable statute or any
successor statutes thereto, as in effect from time to time in the relevant
jurisdiction.
"Welfare Plan" shall mean a "welfare plan," as such term is defined in
section 3(1) of ERISA.
SECTION 1.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the above-defined
meanings when used in any Related Document, or any certificate, report or
other document made or delivered pursuant to this Agreement, unless the
context therein shall clearly otherwise require.
(b) The words "hereof," "herein," "hereunder" and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.
(c) The words "amended or modified" when used in this Agreement or
any Related Document shall mean with respect to this Agreement or any
Related Document such document as from time to time, in whole or in part,
amended, modified, supplemented, restated, refinanced, refunded or renewed.
(d) In the computation of periods of time in this Agreement from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each means "to but excluding."
(e) This Agreement and the Related Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Parent and its Subsidiaries and the other parties, and are the
products of all such Persons. Accordingly, they shall not be construed
against the Administrative Agent, the Foreign Currency Agent or the Lenders
merely because of the Administrative Agent's, the Foreign Currency Agent's
or Lenders' involvement in their preparation.
SECTION 1.3 Accounting and Financial Determinations. For purposes of
this Agreement, unless otherwise specified, all accounting terms used herein or
in any Related Document shall be
interpreted, all accounting determinations and computations hereunder or
thereunder shall be made, and all financial statements required to be delivered
hereunder or thereunder shall be prepared in accordance with, those generally
accepted accounting principles ("GAAP") applied in the preparation of the
financial statements referred to in Section 9.6, as such principles are modified
from time to time in order to comply with DOE and Title IV standards of
accounting; provided that prior to giving effect to any modification of such
principles for purposes of this Agreement, Parent (individually and on behalf of
the Co-Borrowers) agrees to negotiate in good faith any such changes to the
financial covenants set forth in Section 12 and the definitions related thereto
to the extent the Administrative Agent deems necessary, in its sole discretion,
so that such covenants reflect the financial condition of the Parent and its
Subsidiaries as nearly as possible to that provided by such covenants
immediately prior to the proposed modification of such principles.
SECTION 1.4 Currency Equivalents Generally. For all purposes of this
Agreement (but not for purposes of the preparation of any financial statements
delivered pursuant hereto), the equivalent in Canadian Dollars of an amount in
Dollars, and the equivalent in Dollars of an amount in Canadian Dollars, shall
be determined at the Spot Rate.
SECTION 2. THE COMMITMENTS
Subject to the terms and conditions of this Agreement and relying on the
representations and warranties herein set forth:
SECTION 2.1 Revolving Loan Commitment. Each of the Lenders, severally
and for itself alone, agrees to make loans (herein collectively called
"Revolving Loans" and individually called a "Revolving Loan") to the Parent and,
with respect to Canadian Dollar Loans, the Co-Borrowers, on a revolving basis
from time to time before the Revolving Loan Termination Date in such Lender's
Percentage of such aggregate amounts as the Parent or the Co-Borrowers may from
time to time request from all Lenders. The aggregate Dollar Equivalent
principal amount of Revolving Loans which any Lender shall be committed to have
outstanding to the Parent and the Co-Borrowers, when added to the amount of such
Lender's Dollar Equivalent participation in the Letters of Credit issued and
outstanding pursuant to Section 2.2 or drawn and not reimbursed pursuant to
Section 4.10, shall not at any one time exceed the amount with respect to
Revolving Loans
set opposite such Lender's name on Schedule 2.1 hereto. The aggregate principal
Dollar Equivalent amount of Revolving Loans which all Lenders shall be committed
to have outstanding hereunder to the Parent and the Co-Borrowers, when added to
the aggregate Dollar Equivalent amount of Letters of Credit issued and
outstanding pursuant to Section 2.2 or drawn and not reimbursed pursuant to
Section 4.10, shall not at any one time exceed $60,000,000; and provided further
that the aggregate principal Dollar Equivalent amount of Canadian Dollar Loans
which all Lenders shall be committed to have outstanding hereunder to the Parent
and the Co-Borrowers, when added to the aggregate Dollar Equivalent amount of
Letters of Credit denominated in Canadian Dollars issued and outstanding
pursuant to Section 2.2 or drawn and not reimbursed pursuant to Section 4.10,
shall not at any one time exceed $10,000,000. The foregoing commitment of each
Lender is herein called its "Revolving Loan Commitment" and collectively the
"Revolving Loan Commitments."
SECTION 2.2 LC Commitment. LaSalle, as Administrative Agent, or, with
respect to Letters of Credit denominated in Canadian Dollars, Scotia Bank, as
Foreign Currency Agent, agrees for itself and the Lenders to issue from time to
time before the Revolving Loan Termination Date such standby letters of credit
(such letters of credit being herein collectively called "Letters of Credit" and
individually a "Letter of Credit") as the Parent, any Co-Borrower or any
Guarantor may request, it being understood that, pursuant to Section 4.3,
concurrently with the issuance of each such Letter of Credit, each Lender shall
be deemed to have automatically purchased from the Administrative Agent a
participation in such Letter of Credit. The aggregate Dollar Equivalent amount
of all Letters of Credit issued and outstanding pursuant to this Section 2.2 or
drawn and not reimbursed pursuant to Section 4.10 shall not at any one time
exceed $35,000,000 (or such reduced amount as may be fixed by the Parent
pursuant to Section 6.2). The foregoing commitment of each Lender is herein
called its "LC Commitment" and collectively the "LC Commitments."
SECTION 2.3 Commitments and Other Terms. The Revolving Loans are herein
sometimes individually called a "Loan" and collectively called "Loans." The
Revolving Loan Commitments and the LC Commitments are herein sometimes
collectively called the "Commitments" and individually as to each Lender called
a "Commitment."
SECTION 2.4 Canadian Dollar Loans. Notwithstanding the foregoing, only
those Lenders set forth on Schedule 2.1 which have commitments to make Canadian
Dollar Loans shall be required
to make such Loans upon the request of the Parent (in accordance with Section
3.2) in the respective Percentages set forth opposite the names of such Lenders
on such Schedule 2.1.
SECTION 3. THE LOANS
SECTION 3.1 Various Types of Loans. Each Loan shall be either a Base
Rate Loan denominated in Dollars, a Canadian Dollar Loan or a LIBOR Rate Loan
denominated in Dollars (each being herein called a "Type" of Loan) as the Parent
(in accordance with Section 3.2) shall specify in the related Borrowing Request
or Continuation/Conversion Notice pursuant to Section 3.2 or Section 3.5. Base
Rate Loans, Canadian Dollar Loans and LIBOR Rate Loans may be outstanding at the
same time, provided that (a) in the case of LIBOR Rate Loans, not more than five
different Interest Periods shall be outstanding at any one time for all such
Loans, and (b) the Parent (in accordance with Section 3.2) shall specify Loans
and Interest Periods such that no payment or prepayment of any principal on any
Loan shall result in a break-up of any Interest Period.
SECTION 3.2 Notice of Borrowing. The Parent (for itself and, if
applicable, on behalf of the Co-Borrowers) shall give an irrevocable notice
(herein called a "Borrowing Request") to the Administrative Agent, with respect
to any Base Rate Loan, Canadian Dollar Loan or LIBOR Rate Loans and to the
Foreign Currency Agent, with respect to any Canadian Dollar Loan, of each
proposed Borrowing by 10:00 A.M., Chicago time, in the case of a Base Rate
Borrowing, on the proposed date of such Borrowing, and in the case of a LIBOR
Rate Borrowing or a Canadian Dollar Loan, at least three (3) Business Days'
prior to the proposed date of such Borrowing. Each Borrowing Request shall be
effective upon receipt by the Administrative Agent and the Foreign Currency
Agent, as applicable, shall be in writing (or by telephone to be promptly
confirmed in writing, including facsimile) by the Parent, substantially in the
form of Exhibit B, and shall specify the date, amount and Type of Borrowing, and
in the case of a LIBOR Rate Borrowing, the initial Interest Period for such
Borrowing. Notwithstanding the foregoing, the Parent may revoke any Borrowing
Request prior to the funding of the Borrowing so requested; provided that Parent
shall pay all reasonable costs incurred by the Lenders as a result thereof, on
demand of the Administrative Agent, Foreign Currency Agent or such Lender
(together with a written calculation in reasonable detail showing such costs).
SECTION 3.3 Funding. Promptly upon receipt of a Borrowing Request, the
Administrative Agent or, with respect to any Canadian Dollar Loan, the Foreign
Currency Agent, shall advise each Lender thereof. Not later than 2:00 P.M.,
Chicago time, on the date of a proposed Borrowing, subject to Section 2.4 each
Lender shall provide the Administrative Agent at the Office of the
Administrative Agent in Chicago or, with respect to any Canadian Dollar Loan,
the Foreign Currency Agent at the Office of the Foreign Currency Agent in
Toronto, Canada, with immediately available funds covering such Lender's
Percentage of the Borrowing, and subject to receipt by the Administrative Agent
of the documents required under Section 13 with respect to such Borrowing, the
Administrative Agent or the Foreign Currency Agent, as applicable, shall pay
over such funds to the Parent or the Co-Borrowers, as applicable, on the
requested Borrowing date. Each Borrowing involving Loans of the same Type shall
be on a Business Day and, in the case of Base Rate Loans or Canadian Dollar
Loans, shall be in an aggregate principal amount of at least the lesser of the
amount then available to be borrowed under the Revolving Commitments or a Dollar
Equivalent amount of $1,000,000 or any larger Dollar Equivalent integral
multiple of $250,000 in excess thereof and, in the case of LIBOR Rate Loans
shall be in an aggregate principal amount of at least a Dollar Equivalent amount
of $2,500,000 or any larger integral Dollar Equivalent multiple of $500,000 in
excess thereof. All Borrowings shall be pro rata among the Lenders in
accordance with their respective Commitments.
SECTION 3.4 Funding Reliance. Unless the Administrative Agent or, with
respect to any Canadian Dollar Loan, the Foreign Currency Agent, shall have been
notified by telephone, confirmed in writing, by any Lender by 2:00 P.M., Chicago
time, on the day of the proposed Borrowing that such Lender will not make
available the amount which would constitute its Percentage of such Borrowing on
the date specified therefor, the Administrative Agent or the Foreign Currency
Agent, as applicable, may assume, subject to the satisfactory fulfillment by the
Parent of the conditions precedent set forth in Section 13, that such Lender has
made such amount available to the Administrative Agent or the Foreign Currency
Agent, and, in reliance upon such assumption, make available to the Parent or
the Co-Borrowers, as applicable, a corresponding amount. If and to the extent
that such Lender shall not have made such amount available to the Administrative
Agent or the Foreign Currency Agent, as applicable, such Lender, the Parent and
the Co-Borrowers, severally agree to repay the Administrative Agent or the
Foreign Currency Agent forthwith on demand such corresponding amount together
with interest thereon,
for each day from the date the Administrative Agent or the Foreign Currency
Agent made such amount available to the Parent or the Co-Borrowers to the date
such amount is repaid to the Administrative Agent or the Foreign Currency Agent,
at the interest rate applicable at the time to Loans comprising such Borrowing.
SECTION 3.5 Conversion and Continuation of Loans. The Parent (for itself
and on behalf of the Co-Borrowers) may, by delivery to the Administrative Agent
of a Continuation/Conversion Notice (herein called a "Continuation/Conversion
Notice"), in the form of Exhibit C attached hereto with appropriate insertions,
before 10:00 A.M., Chicago time, at least: (a) three (3) Business Days prior to
the proposed conversion date to convert Base Rate Loans into LIBOR Rate Loans,
(b) one (1) Business Day prior to the proposed conversion date to convert LIBOR
Rate Loans into Base Rate Loans, and (c) three (3) Business days prior to the
proposed continuation date to continue any LIBOR Rate Loan into a subsequent
Interest Period of the same duration or of any other duration permitted
hereunder in the same Applicable Currency, subject to the following:
(i) the Interest Period applicable to any LIBOR Rate Loan resulting
from a conversion shall be specified by the Parent in the
Continuation/Conversion Notice delivered pursuant to this Section;
provided, however, that if no such Interest Period shall be specified, the
Parent shall be deemed to have selected an Interest Period of one month's
duration. If the Parent shall not have given timely notice to continue any
Loan into a subsequent Interest Period and shall not otherwise have given
notice to convert such Loan, such Loan, unless repaid pursuant to the terms
hereof, shall automatically be converted into a Base Rate Loan denominated
in Dollars;
(ii) if less than all Loans at the time outstanding shall be
converted or continued, such conversion or continuation shall be made pro
rata among the Lenders, as applicable, in accordance with the respective
principal amounts of Loans of such Type (and have the same Interest Period)
held by such Lenders immediately prior to such conversion or continuation;
(iii) in the case of a conversion or continuation of less than all
Loans, the aggregate principal amount of such Loans converted or continued
shall not be less
than a Dollar Equivalent amount of $2,500,000 or any larger integral Dollar
Equivalent multiple of $500,000 in excess thereof;
(iv) if any LIBOR Rate Loan is converted at a time other than the
last day of an Interest Period applicable thereto, the Parent shall at the
time of conversion pay any loss or expense (including, without limitation,
breakage losses and expenses) associated therewith pursuant to Section 7.5;
(v) any portion of a Loan maturing or required to be repaid in less
than one month may not be converted into, or continued as, a LIBOR Rate
Loan; and
(vi) any portion of a LIBOR Rate Loan required to be paid on any
principal payment date occurring in less than one month after the end of
the then-current Interest Period applicable to such Loan shall be
automatically converted at the end of such Interest Period into a Base Rate
Loan.
Notwithstanding the foregoing, so long as any Default or Event of Default shall
exist, no Loans shall be converted to or continued as LIBOR Rate Loans.
SECTION 3.6 Repayment of Revolving Loans; Notes. The Revolving Loans of
each Lender shall be payable (and the Parent agrees to pay all such Revolving
Loans and the Parent and Co-Borrowers agree, jointly and severally, to pay any
such Revolving Loans constituting a Canadian Dollar Loan) on the Revolving Loan
Termination Date in the Applicable Currency. The Revolving Loans of each Lender
under the Original Credit Agreement were evidenced by the Existing Revolving
Notes. After the Restatement Effective Date, the Revolving Loans of each Lender
shall be evidenced by a Revolving Note, payable to the order of such Lender in
the principal amount of the Revolving Loan Commitment of such Lender (or, if
less, in the aggregate unpaid principal amount of all of such Lender's Revolving
Loans hereunder outstanding on the Revolving Loan Termination Date).
SECTION 3.7 Recordkeeping. Each Lender shall record in its records, or
at its option on the schedule attached to its relevant Note, the date and amount
of each Loan made by such Lender, each repayment or conversion thereof, and in
the case of each LIBOR Rate Loan the dates on which each Interest Period for
such Loan shall begin and end. The information so recorded shall
be conclusive absent manifest error. The failure to so record any such
information or any error in so recording any such information shall not,
however, limit or otherwise affect the obligations of the Parent or the Co-
Borrowers hereunder or under any Note to repay the principal amount of the Loans
together with all interest accrued thereon.
SECTION 4. THE LETTERS OF CREDIT
SECTION 4.1 Request for Issuance of Letters of Credit. The
Administrative Agent shall receive from the Parent, either Co-Borrower or any
Guarantor at least five (5) Business Days' prior written notice of a request for
issuance of each Letter of Credit, each such request to be accompanied by an
application substantially in the form of Exhibit D (an "LC Application") duly
executed by the Parent (for itself or on behalf of any such Co-Borrower or
Guarantor) and in all respects in form and substance reasonably satisfactory to
the Administrative Agent, together with such other documentation as the
Administrative Agent may reasonably request in support thereof. The
Administrative Agent shall promptly notify each Lender of any request from the
Parent, either Co-Borrower or any such Guarantor that such Letter of Credit be
issued.
SECTION 4.2 Expiration and other Terms. Each Letter of Credit shall
expire on or before thirty (30) days prior to the Revolving Loan Termination
Date.
SECTION 4.3 Participation. Concurrently with the issuance of each Letter
of Credit, subject to Section 4.14 the Administrative Agent shall be deemed to
have sold and transferred to each Lender, and each Lender shall be deemed
irrevocably and unconditionally to have automatically purchased and received
from the Administrative Agent, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender's Percentage, in such
Letter of Credit and the Parent's related LC Obligations and any security
therefor.
SECTION 4.4 Notification of Demand for Payment. The Administrative Agent
shall promptly notify the Parent and each Lender of the amount of each demand
for payment under a Letter of Credit and of the date on which such payment is to
be made.
SECTION 4.5 Funding by Administrative Agent. With respect to each demand
for payment pursuant to a Letter of Credit, the Administrative Agent shall,
promptly following its receipt
thereof, examine all documents purporting to represent such demand to ascertain
that the same appear on their face to be in conformity with the terms and
conditions of such Letter of Credit. If the Administrative Agent determines (in
accordance with the standards and practices applicable thereto) that a demand
for payment under a Letter of Credit conforms to the terms and conditions of
such Letter of Credit, then the Administrative Agent shall make payment to the
Beneficiary in accordance with the terms of such Letter of Credit.
SECTION 4.6 Funding By Lenders. Not later than 11:00 A.M., Chicago time,
on each date on which payment is to be made under a Letter of Credit, subject to
Section 4.14 each Lender shall make available to the Administrative Agent, in
Dollars and in same day funds, such Lender's Percentage of the amount of such
payment. If and to the extent any Lender shall not have made such amount
available to the Administrative Agent on any such date, such Lender agrees
(without limitation to any rights or remedies then available to any party with
respect to such failure to make payments) to pay interest on such amount to the
Administrative Agent for the account of the Administrative Agent forthwith on
demand for each day from the date on which such payment was to be made to the
date such amount is made available to the Administrative Agent. Such interest
shall be determined at a rate per annum equal to the Federal Funds Rate, or in
the case of payments denominated in Canadian Dollars, the Overnight Rate, from
time to time in effect, based upon a year of 360 days or, in the case of
Canadian Dollar Loans, a year of 365-66 days. Any Lender's failure to make
available to the Administrative Agent its Percentage of any payment under a
Letter of Credit shall not relieve any other Lender of its obligation to make
available to the Administrative Agent its Percentage of such payment on the date
such payment is to be made, but no Lender shall be responsible for the failure
of any other Lender to make available to the Administrative Agent such other
Lender's Percentage of any such payment.
SECTION 4.7 Non-Conforming Demand For Payment. If, after examination of
a demand for payment under a Letter of Credit, the Administrative Agent shall
have determined that such demand does not conform to the terms and conditions of
such Letter of Credit, then the Administrative Agent shall, as soon as
reasonably practicable, give notice to the related Beneficiary and to the Parent
to the effect that demand was not made in accordance with the terms and
conditions of such Letter of Credit, stating the reasons therefor and that the
relevant document is being held at the disposal of the Beneficiary or is being
returned to the
Beneficiary, as the Administrative Agent may elect. The Beneficiary may attempt
to correct any such non-conforming demand for payment under such Letter of
Credit if, and to the extent that, the Beneficiary is entitled (without regard
to the provisions of this sentence) and able to do so.
SECTION 4.8 Return of Funds Related to Non-Conforming Demand. If the
Administrative Agent does not disburse funds to the Beneficiary for any reason
after having received such funds from any Lender pursuant to Section 4.6, the
Administrative Agent shall return such funds to such Lender on the next
following Business Day together with interest on such funds from the date on
which the Administrative Agent received such funds to the day on which the
Administrative Agent so returns such funds at the Federal Funds Rate, or in the
case of payments denominated in Canadian Dollars, the Overnight Rate, for each
such day, based upon a year of 360 days or, in the case of Canadian Dollar
Loans, a year of 365-66 days.
SECTION 4.9 Return of Letter of Credit. With respect to each Letter of
Credit, the Administrative Agent shall have the right; provided the
Administrative Agent is not then in default under such Letter of Credit by
reason of its having wrongfully failed to honor a demand for payment previously
made by the Beneficiary under such Letter of Credit, to require the Beneficiary
to surrender such Letter of Credit to the Administrative Agent on the stated
expiration date. The Parent agrees, if necessary, to use its best efforts to
cause the Beneficiary to surrender such Letter of Credit.
SECTION 4.10 Reimbursement Agreement of the Parent. The Parent and, with
respect to any Letter of Credit denominated in Canadian Dollars, the Parent and
the Co-Borrowers hereby, jointly and severally, unconditionally and irrevocably
agrees to reimburse the Administrative Agent, immediately upon demand, for each
payment made by the Administrative Agent in accordance herewith under a Letter
of Credit honoring a demand for payment made by the Beneficiary thereunder, with
interest on the amount so paid by the Administrative Agent from the date paid by
the Administrative Agent to the date the Administrative Agent is reimbursed
therefor, at a rate per annum equal to the Base Rate, with respect to Letters of
Credit with payments denominated in Dollars and the Prime Rate, with respect to
Letters of Credit with payments denominated in Canadian Dollars, from time to
time in effect (but not less than the Base Rate or Prime Rate, as applicable, in
effect on the date of such payment by the Administrative Agent), plus the
Applicable Base/Prime Rate
Margin. Interest shall be computed for the actual number of days elapsed on the
basis of a year consisting of 360 days or, in the case of Letters of Credit with
payments denominated in Canadian Dollars, 365-66 days. Upon receipt of each
payment under this Section 4.10, the Administrative Agent shall promptly pay to
each Lender which previously made the entire payment required under Section 4.6,
in the kind of funds received, an amount equal to such Lender's Percentage of
such payment.
SECTION 4.11 Obligation to Reimburse for or Participate in Letter of
Credit Payments. The Parent's and the Co-Borrower's obligation to reimburse the
Administrative Agent for payments made by the Administrative Agent under any
Letter of Credit honoring a demand for payment by the Beneficiary thereunder,
and each Lender's obligation to participate in and make available to the
Administrative Agent its Percentage of such payments in accordance with this
Agreement, shall be irrevocable, absolute and unconditional under any and all
circumstances including, without limitation, any of the following circumstances:
(a) any lack of legality, validity, regularity or enforceability of
this Agreement, any Letter of Credit or any other Related Document;
(b) the existence of any claim, setoff, defense or other right which
the Parent, either Co-Borrower or any Guarantor may have or have had at any
time against any Beneficiary, the Administrative Agent, the Foreign
Currency Agent, any Lender, any transferee of any Letter of Credit (or any
Person for whom any such transferee may be acting) or any other Person,
whether in connection with this Agreement, any Letter of Credit, any other
Related Document, the transactions contemplated herein or therein or any
unrelated transactions (including any underlying transaction between the
Parent, the Co-Borrowers and the Beneficiary of any Letter of Credit);
(c) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(d) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Related Documents;
(e) payment by the Administrative Agent under any Letter of Credit
against presentation of a draft or certificate or other document that does
not comply with the terms of such Letter of Credit; or
(f) the occurrence of any Default or Event of Default;
provided, however, that neither the Parent nor any such Co-Borrower shall be
obligated to reimburse the Administrative Agent for, and no Lender shall be
obligated to participate in, any wrongful payment made by the Administrative
Agent under any Letter of Credit as a result of acts or omissions constituting
gross negligence or willful misconduct on the part of the Administrative Agent
or any of its officers, employees or agents as finally judicially determined by
a court of competent jurisdiction.
SECTION 4.12 Mandatory Payment to Administrative Agent of LC Obligations.
The Parent and, with respect to LC Obligations relating to Letters of Credit
denominated in Canadian Dollars, the Parent and the Co-Borrowers agree, jointly
and severally, that, on any termination of the LC Commitments pursuant to
Section 6.2 or Section 14.2, it will pay to the Administrative Agent in Dollars
and in same day funds an amount equal to the Dollar Equivalent principal amount
of all LC Obligations under any LC Application, whether or not the related
Letter of Credit has been drawn (which amount shall be retained by the
Administrative Agent in a separate collateral account as security for the LC
Obligations and the other Liabilities) plus the then aggregate accrued amount of
unpaid fees arising under Sections 5.7(b) and 5.7(c).
SECTION 4.13 Existing Letters of Credit. The Parent, the Lenders and the
Administrative Agent agree that, on the Restatement Effective Date, each
Existing Letters of Credit shall be deemed to have been issued for the account
of the Parent (or jointly for the account of the Parent and any applicable
Subsidiary) hereunder and to be subject to the terms and provisions hereof.
SECTION 4.14 Limited Participation and Funding of Letters of Credit.
Notwithstanding the foregoing, only those Lenders set forth on Schedule 2.1
which have commitments to make Canadian Dollar Loans shall be required to
participate in or fund any Letter of Credit denominated in Canadian Dollars.
Furthermore, no Lender with a commitment only to make Canadian Dollar Loans
shall be required to participate in or fund any Letter of Credit denominated in
Dollars.
SECTION 5. INTEREST AND FEES, ETC.
SECTION 5.1 Interest Rates. With respect to each Loan, the Parent and,
with respect to any Canadian Dollar Loan, the Co-Borrowers hereby, jointly and
severally, promise to pay interest on the unpaid principal amount thereof for
the period commencing on the date of such Loan until such Loan is paid in full,
as follows:
(a) At all times while such Loan is a Base Rate Loan or a Canadian
Dollar Loan, at a rate per annum equal to the Base Rate or the Prime Rate,
respectively, from time to time in effect, plus the Applicable Base/Prime
Rate Margin (as hereinafter defined); and
(b) At all times while such Loan is a LIBOR Rate Loan, for each
Interest Period, at a rate per annum equal to the LIBOR Rate (Reserve
Adjusted) applicable to such Interest Period, plus the Applicable LIBOR
Rate Margin, (as hereinafter defined).
For purposes hereof, the Applicable Base/Prime Rate Margin and the
Applicable LIBOR Rate Margin shall be determined based on the Leverage Ratio as
follows:
-------------------------------------------------------------------
Applicable
Base/Prime Applicable LIBOR
Leverage Ratio Rate Margin Rate Margin
-------------------------------------------------------------------
greater than 3.01:1.00 .75% 2.00%
-------------------------------------------------------------------
greater than 2.51:1.00 but .50% 1.75%
not more than 3.01:1.00
-------------------------------------------------------------------
greater than 2.01:1.00 but .25% 1.50%
not more than 2.51:1.00
-------------------------------------------------------------------
greater than 1.51:1.00 - 0% 1.25%
but not more than
2.01:1.00
-------------------------------------------------------------------
equal to or greater than 0% 1.00%
1.01:1.00 but not more than
1.51:1.00
-------------------------------------------------------------------
less than 1.01x 0% 0.75%
-------------------------------------------------------------------
Any adjustment in the Applicable Base/Prime Rate Margin or the Applicable
LIBOR Rate Margin as a result of a change in the Leverage Ratio shall be
effective upon receipt by the Administrative Agent of a Compliance Certificate
pursuant to Section 10.1.4 setting forth the calculation of the Leverage Ratio
and the financial statements required to be delivered in connection therewith;
provided that, notwithstanding the foregoing, the Applicable Base/Prime Rate
Margin and the Applicable LIBOR Rate Margin for the period commencing on the
Closing Date through September 30, 1998 shall be .50% per annum and 1.75% per
annum, respectively; and provided, further, that in no event will the Applicable
Base/Prime Rate Margin or the Applicable LIBOR Rate Margin be reduced at any
time when a Default has occurred and is continuing. Any adjustment in the
Applicable Base/Prime Rate Margin or the Applicable LIBOR Rate Margin shall be
effective retroactively to the first day of the Fiscal Quarter for which the
Compliance Certificate should have been delivered to the Lenders pursuant to
Section 10.1.4.
SECTION 5.2 Default Interest Rate. Notwithstanding the provisions of
Section 5.1, in the event that any Default or Event of Default shall occur
hereunder, the Parent and, with respect to any Canadian Dollar Loan, the Co-
Borrowers hereby, jointly and severally, promise to pay interest on the unpaid
principal amount of the Loans for the period commencing on the date of such
Default or Event of Default until such Default or Event of Default is cured or
waived by the Lenders in accordance with this Agreement at a rate per annum
equal to the applicable rate(s) otherwise in effect with respect to such Loans,
plus 2.00% per annum.
SECTION 5.3 Interest Payment Dates. Accrued interest on each Loan shall
be payable on each Interest Payment Date and at maturity, commencing with the
first of such dates to occur after the date hereof. After maturity, accrued
interest on all Loans shall be payable on demand.
SECTION 5.4 Interest Periods. Each "Interest Period" for a LIBOR Rate
Loan shall commence on the date such LIBOR Rate Loan was made, continued or
converted from a Loan of a different Type, or on the expiration of the
immediately preceding Interest Period for such LIBOR Rate Loan, and shall end on
the date which is 1, 2, 3 or 6 months thereafter, as the Parent may specify
pursuant to Section 3.2 or Section 3.5 hereof.
SECTION 5.5 Setting and Notice of Rates. The applicable LIBOR Rate
(Reserve Adjusted) for each Interest Period shall be determined by the
Administrative Agent, and notice thereof shall be
given by the Administrative Agent promptly to the Parent and each Lender. Each
determination of the applicable LIBOR Rate (Reserve Adjusted) by the
Administrative Agent shall be conclusive and binding upon the parties hereto, in
the absence of manifest error. If LaSalle does not furnish a timely quotation,
the provisions of Section 7.3 shall apply. If the Administrative Agent is unable
to determine such a rate, the provisions of Section 7.2 shall apply. The
Administrative Agent shall, upon written request of the Parent or any Lender,
deliver to the Parent or such Lender a statement showing the computations used
by the Administrative Agent in determining any applicable LIBOR Rate (Reserve
Adjusted) hereunder.
SECTION 5.6 Computation of Interest. Interest on all Base Rate Loans,
Libor Rate Loans and LC Obligations payable in Dollars shall be computed for the
actual number of days elapsed on the basis of a 360-day year. For purposes of
the Interest Act (Canada), interest on all Canadian Dollar Loans and LC
Obligations with payment denominated in Canadian Dollars shall be computed for
the actual number of days elapsed on the basis of a year of 365-66 days.
SECTION 5.7 Fees. The Parent agrees to pay the following fees (all such
fees being non-refundable):
(a) The Parent agrees to pay to the Administrative Agent, for the
account of each Lender, for the period (including any portion thereof when
any of its Commitments are suspended by reason of the Parent's inability to
satisfy any condition of Section 13) commencing on the Restatement
Effective Date and continuing to the Revolving Loan Termination Date, a
commitment fee (the "Commitment Fee") at the rate set forth in Section
5.7(h) on such Lender's Percentage of the sum of the average daily unused
portion of such Lender's Commitment. Such Commitment Fees shall be payable
by the Parent in arrears on each Quarterly Payment Date, commencing with
the first such Quarterly Payment Date following the Restatement Effective
Date, and on the Revolving Loan Termination Date. For purposes of
determining utilization of each Lender's Commitment, the amount of any
outstanding Canadian Dollar Loan on any date shall be determined based on
the Dollar Equivalent amount with respect to such Canadian Dollar Loan.
(b) The Parent agrees to pay to each Lender an upfront fee equal to
0.15% of such Lender's Revolving Loan Commitment as set forth in Schedule
2.1.
(c) The Parent agrees to pay to the Administrative Agent, for the
account of each Lender, a Commitment Fee for each Letter of Credit (the "LC
Commitment Fee"), from the date of issuance thereof to the earlier to occur
of the expiration or termination thereof or the date of payment by the
Administrative Agent thereunder, at a rate per annum equal to the amount
set forth in Section 5.7(h) of the aggregate outstanding undrawn amount of
each such Letter of Credit, such fee to be payable in arrears on each
Quarterly Payment Date (or at such other times as the Administrative Agent
shall reasonably request, for any period prior to such date or time for
which such Commitment Fee shall not have been theretofore paid).
(d) The Parent agrees to pay to the issuing Lender of each Letter of
Credit on the date of issuance for each such Letter of Credit a fronting
fee of 0.15% of the aggregate Dollar Equivalent amount of each such Letter
of Credit.
(e) The Parent agrees to pay, such published fees and other amounts
("LC Administrative Fees") as the Administrative Agent shall customarily
require in connection with the issuance, negotiation, processing and/or
administration of Letters of Credit in similar situations, such fees to be
in addition to the fees payable under the Fee Letter, with respect to the
issuance and/or negotiation of each Letter of Credit.
(f) With respect to the Existing Letters of Credit, (i) the Parent
shall only be responsible for fees pursuant to clause (c) above with
respect to such Letters of Credit commencing on the Restatement Effective
Date and (ii) the Parent shall be responsible for fees and expenses
pursuant to clause (d) and (e) above only to the extent not previously paid
in respect of such Letters of Credit.
(g) The Parent agrees to pay to the Administrative Agent, for its own
account, the fees set forth in that certain fee letter, dated as of October
26, 1998 (the "LaSalle Fee Letter") from the Administrative Agent addressed
to and accepted by the Parent, in addition to the other fees otherwise
expressly described herein.
(h) For purposes hereof, the Commitment Fee and the LC Commitment Fee
shall be determined based on the Leverage Ratio as follows:
-----------------------------------------------------------------
Leverage Ratio Applicable Applicable LC
Commitment Fee Commitment Fee
-----------------------------------------------------------------
greater than 3.01:1.00 .375% 2.00%
-----------------------------------------------------------------
greater than 2.51:1.00 .25% 1.75%
but not more than
3.01:1.00
-----------------------------------------------------------------
greater than 2.01:1.00 .25% 1.50%
but not more than
2.51:1.00
-----------------------------------------------------------------
greater than 1.51:1.00 - .25% 1.25%
2.01:1.00
-----------------------------------------------------------------
greater than or equal to .25% 1.00%
1.01:1.00 but not more
than 1.51:1.00
-----------------------------------------------------------------
less than 1.01:1.00 .25% 0.75%
-----------------------------------------------------------------
Any adjustment in the Commitment Fee or the LC Commitment Fee as a result
of a change in the Leverage Ratio shall be effective upon receipt by the
Administrative Agent of a Compliance Certificate pursuant to Section 10.1.4
setting forth the calculation of the Leverage Ratio and the financial statements
required to be delivered therewith; provided that, notwithstanding the
foregoing, the Commitment Fee and the LC Commitment Fee for the period
commencing on the Closing Date through September 30, 1998 shall be .25% per
annum and 1.50% per annum, respectively; and provided, further, that in no event
will the Applicable Commitment Fee or the Applicable LC Commitment Fee be
reduced at any time when a Default has occurred and is continuing. Any
adjustment in the Applicable Commitment Fee or the Applicable LC Commitment Fee
shall be effective retroactively to the first day of the Fiscal Quarter for
which such Compliance Certificate should have been delivered to the
Administrative Agent pursuant to Section 10.1.4.
All such fees shall be computed for the actual number of days elapsed on
the basis of a 360-day year without regard to any Default or Event of Default.
SECTION 6. REDUCTION OR TERMINATION OF THE COMMITMENTS;
PAYMENTS AND PREPAYMENTS
SECTION 6.1 Voluntary Reduction or Termination of the Revolving Loan
Commitments. The Parent may from time to time prior
to the Revolving Loan Termination Date on at least three (3) Business Days'
prior written notice received by the Administrative Agent (which shall promptly
advise each Lender thereof) permanently reduce the amount of the Revolving Loan
Commitments (such reduction to be pro rata among the Lenders according to their
respective Percentages) to an amount not less than the aggregate unpaid
principal amount of the Revolving Loans then outstanding. Any such reduction
shall be in an aggregate Dollar Equivalent amount of $5,000,000 or a Dollar
Equivalent integral multiple of $1,000,000 in excess thereof. The Parent may at
any time on like notice from the Parent prior to the Revolving Loan Termination
Date terminate the Revolving Loan Commitments upon payment in full of the
outstanding principal amount of the Revolving Loans and other obligations of the
Parent and the Co-Borrowers hereunder pertaining to the Revolving Loans.
SECTION 6.2 Voluntary Reduction of the LC Commitments. The Parent may,
from time to time on at least three (3) Business Days' prior written notice to
the Administrative Agent, permanently reduce the amount of the LC Commitments to
an amount not less than the maximum amount of the Letters of Credit then
outstanding or drawn and not reimbursed. The Parent may at any time on like
notice terminate the LC Commitments upon payment to the Administrative Agent in
accordance with Section 4.12 of all LC Obligations (whether absolute or
contingent) in connection with the Letters of Credit.
SECTION 6.3 Voluntary Prepayments. The Parent and the Co-Borrowers may
from time to time prepay the Loans in whole or in part, without premium or
penalty; provided that (a) the Parent shall give the Administrative Agent (which
shall promptly advise each Lender) not less than three (3) Business Days' prior
notice thereof, specifying the Loans to be prepaid, and the date and amount of
prepayment, (b) unless the fees and costs are paid pursuant to Section 7.5,
LIBOR Rate Loans shall be prepaid only on the last day of the Interest Period
relating thereto, (c) each partial prepayment shall be in a principal Dollar
Equivalent amount of $1,000,000, or a Dollar Equivalent integral multiple
$500,000 in excess thereof, and (d) any prepayment of the principal amount of
the Loans, or any portion thereof, shall include accrued interest to the date of
prepayment.
SECTION 6.4 Making of Payments. Except as otherwise provided, all
payments (including those made pursuant to Section 5.7 or Section 6.3) in
respect of the Loans or the Letters of Credit (other than Canadian Dollar Loans
or Letters of Credit denominated in Canadian Dollars) shall be made by the
Parent to the
Administrative Agent in immediately available funds in Dollars for the account
of the Lenders pro rata according to their respective Percentages of the unpaid
principal amount of the Loans or LC Obligations held by them, and with respect
to principal of, interest on, and any other amounts relating to, any Canadian
Dollar Loan or Letter of Credit with payment denominated in Canadian Dollars,
shall be made by the Parent and the Co-Borrowers, jointly and severally, in
Canadian Dollars, and, with respect to all other amounts payable hereunder,
shall be made in Dollars. All payments of fees pursuant to Section 5.7 (other
than any such fee payable for the Administrative Agent's sole account) shall be
made by the Parent to the Administrative Agent for the account of the Lenders,
pro rata according to their respective Percentages. All such payments shall be
made to the Administrative Agent at its office in Chicago, not later than 12:30
P.M., Chicago time, on the date due, and funds received after that hour shall be
deemed to have been received by the Administrative Agent on the next following
Business Day. The Administrative Agent shall promptly remit to each Lender its
pro rata share (based on its Percentage) of all such payments received in
collected funds by the Administrative Agent for the account of such Lender. All
payments under Sections 7.1, 7.2 and 7.5 shall be made by the Parent directly to
the Lender or Lenders entitled thereto. All payments under Sections 5.7(d) and
15.5 shall be made directly to, and for the sole account of, the Administrative
Agent.
SECTION 6.5 Due Date Extension. If any payment provided for hereunder
falls due on a Saturday, Sunday or other day which is not a Business Day, then
such due date shall be extended to the next following Business Day, and
additional interest shall accrue and be payable for the period of such
extension.
SECTION 6.6 Sharing of Payments. (a) If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
offset or otherwise) on account of any Loan or LC Obligation (other than
pursuant to the terms of Section 7) in excess of its pro rata share (based on
its Percentage) of payments and other recoveries obtained by all Lenders of
Loans or LC Obligations on account of principal of and interest and fees with
respect to Loans or reimbursement or fees with respect to LC Obligations then
held by them, such Lender shall purchase from the other Lenders such
participation in the Loans and LC Obligations held by them as shall be necessary
to cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of the
excess payment or other recovery is thereafter recovered from such purchasing
Lender, the purchase shall be
rescinded and each Lender which has sold a participation to the purchasing
Lender shall repay to the purchasing Lender the purchase price to the ratable
extent of such recovery together with an amount equal to such selling Lender's
ratable share (according to the proportion of (i) the amount of such selling
Lender's required repayment to the purchasing Lender to (ii the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
(b) The Parent and each Co-Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to Section 6.6(a) may, to the fullest
extent permitted by law, exercise all its rights of payment (including pursuant
to Section 6.7) with respect to such participation as fully as if such Lender
were the direct creditor of the Parent or such Co-Borrower, as applicable, in
the amount of such participation. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section applies, such Lender shall, to the extent
practicable, exercise its rights in respect to such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section to share
in the benefits of any recovery of such secured claim.
SECTION 6.7 Setoff. Each Lender shall, upon the occurrence of any Event
of Default described in Section 14.1 or, with the consent of the Required
Lenders, upon the occurrence of any other Event of Default, have the right to
appropriate and apply to the payment of the Liabilities owing to it (whether or
not then due), and (as security for such Liabilities) the Parent and each Co-
Borrower hereby grants to each Lender a continuing security interest in, any and
all balances, credits, deposits, accounts or moneys of the Parent and such Co-
Borrower then or thereafter maintained with such Lender. Any such appropriation
and application shall be subject to the provisions of Section 6.6. Each Lender
agrees promptly to notify the Parent, such Co-Borrower and the Administrative
Agent after any such setoff and application made by such Lender; provided,
however, that the failure to give such notice shall not affect the validity of
such setoff and application. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff under
applicable law or otherwise) which such Lender may have.
SECTION 6.8 Net Payments. All payments by the Parent or any Co-Borrower
of principal of, and interest on, the Loans and all other amounts payable
hereunder shall be made free and clear of and
without deduction for any present or future income, stamp or other Taxes, fees,
duties, withholdings or other charges of any nature whatsoever imposed by any
taxing authority, other than Income Taxes (such non-excluded items being called
"Charges"). In the event that any withholding or deduction from any payment to
be made by the Parent or such Co-Borrower hereunder is required in respect of
any Charges pursuant to any applicable law, rule or regulation, then the Parent
or such Co-Borrower will:
(a) pay directly to the relevant authority the full amount required
to be so withheld or deducted;
(b) promptly forward to the Administrative Agent an official receipt
or other documentation reasonably satisfactory to the Administrative Agent
evidencing such payment to such authority; and
(c) pay to the Administrative Agent, for the account of the Lenders,
such additional amount or amounts as is necessary to ensure that the net
amount actually received by each Lender will equal the full amount such
Lender would have received had no such withholding or deduction been
required.
Upon the request of the Parent or the Administrative Agent, each Lender that is
organized under the laws of a jurisdiction other than the U.S. shall, prior to
the due date of any payments under the Loans or LC Obligations, execute and
deliver to the Parent and the Administrative Agent, on or about the first
scheduled payment date in each calendar year, a United States Internal Revenue
Service Form 4224 or Form 1001, as may be applicable (or any successor form),
appropriately completed. Without prejudice to the survival of any other
agreement of the Parent hereunder or any other document, the agreements of the
Parent contained in this Section shall survive satisfaction of the Liabilities
and termination of this Agreement until the termination of all statutes of
limitations applicable thereto.
SECTION 7. CHANGES IN CIRCUMSTANCES
SECTION 7.1 Increased Costs. If (a) Regulation D of the Board of
Governors of the Federal Reserve System, or (b) after the date hereof, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
Lending Office of such Lender) with any request or directive (whether or not
having the force of law) or any such authority, central bank or comparable
agency,
(i) shall subject any Lender (or any Lending Office of such Lender)
to any tax (other than Income Taxes), duty or other charge with respect to
its Loans or its LC Obligations or its obligation to make Loans, or issue
or participate in the issuance of Letters of Credit or shall change the
basis of taxation of payments to any Lender of the principal of or interest
on its Loans, LC Obligations or any other amounts due under this Agreement
in respect of its Loans or its obligation to make Loans or its LC
Obligations (except for changes in the rate of Income Tax); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System, but excluding any reserve included in the
determination of interest rates pursuant to Section 5), special deposit or
similar requirement against assets of, deposits with or for the account of,
or credit extended by, any Lender (or any Lending Office of such Lender);
or
(iii) shall impose on any Lender (or its Lending Office) any other
condition affecting its Loans or its LC Obligations;
and the result of any of the foregoing is to increase the net cost to (or in the
case of Regulation D referred to above, to impose a cost on) such Lender (or any
Lending Office of such Lender) of making or maintaining any Loan, or any Letter
of Credit or participation therein or to reduce the amount of any sum received
or receivable by such Lender (or the Lending Office or such Lender) under this
Agreement or under its Loans with respect thereto, then within thirty (30) days
after demand by such Lender (which demand shall be accompanied by a statement
setting forth in reasonable detail the basis of such demand); provided that such
Lender makes the same demand on other of its similarly-situated borrowers, if
any, the Parent shall pay directly to such Lender such additional amount or
amounts as will compensate such Lender for such increased cost or such
reduction.
SECTION 7.2 Change in Rate of Return. If, after the date hereof, any
change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any law or
regulation, directive, guideline, decision or request (whether or not having the
force of law) of any court, central bank, regulator or other governmental
authority affects or would affect the amount of capital required or expected to
be maintained by any Lender or any person controlling such Lender, and such
Lender reasonably determines that the rate of return on its or such controlling
person's capital as a consequence of its Commitments, the Loans or the Letters
of Credit made by such Lender (or any participating interest therein held by
such Lender) is reduced to a level below that which such Lender or such
controlling person could have achieved but for the occurrence of any such
circumstance, then, in any such case the Parent shall, within thirty (30) days
after demand (accompanied by the statement described below) by such Lender;
provided that such Lender makes the same demand on other of its similarly-
situated borrowers, if any, the Parent shall pay directly to such Lender
additional amounts sufficient to compensate such Lender or such controlling
person for such reduction in rate of return. A written statement of such Lender
as to any such additional amount or amounts (including calculations thereof) in
reasonable detail shall, in the absence of manifest error, be conclusive and
binding on the Parent. In determining such amount, such Lender may use any
method of averaging and attribution that it shall reasonably deem applicable.
Each Lender promptly shall notify the Parent of any event of which it has
knowledge, occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 7.2.
SECTION 7.3 Basis for Determining Interest Rate Inadequate or Unfair. If
with respect to any Interest Period:
(a) the Administrative Agent is advised by LaSalle that deposits in
Dollars (in the applicable amounts) are not being offered to LaSalle in the
relevant market for such Interest Period, or the Administrative Agent
otherwise determines (which determination shall be binding and conclusive
on all parties) that by reason of circumstances affecting the interbank
eurodollar market adequate and reasonable means do not exist for
ascertaining the applicable LIBOR Rate; or
(b) any Lender advises the Administrative Agent that, for reasons
described in Section 7.1, 7.2 or 7.4, the LIBOR Rate (Reserve Adjusted), as
determined by the Administrative Agent, will not adequately and fairly
reflect the cost to such Lender of maintaining or funding such Loans for
such Interest Period, or that the making
or funding of LIBOR Rate Loans has become impracticable as a result of an
event occurring after the date of this Agreement which in the opinion of
such Lender materially and adversely changes such Loans,
then, so long as such circumstances shall continue: (i) the Administrative
Agent shall promptly notify the other parties thereof, (ii no Lender shall be
under any obligation to make or convert into LIBOR Rate Loans so affected, and
(ii on the last day of the then current Interest Period for Loans of the Type so
affected, such Loans shall, unless then repaid in full, automatically convert
to Base Rate Loans. If conditions subsequently change so that the foregoing
conditions no longer exist, the Administrative Agent in the case of clause (a)
or such Lender in the case of clause (b) will promptly notify the Parent and the
Lenders thereof, and upon the receipt of such notice, the obligations of all
Lenders to make or continue LIBOR Rate Loans shall be reinstated.
SECTION 7.4 Changes in Law Rendering Certain Loans Unlawful. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for a Lender or the Lending
Office of such Lender ("Affected Lender") to make, maintain or fund LIBOR Rate
Loans, then (a) the Affected Lender shall promptly notify each of the other
parties hereto, (b) the obligation of all Lenders to make, continue or convert
into LIBOR Rate Loans shall, upon the effectiveness of such event, be suspended
for the duration of such unlawfulness, and (c) on the last day of the current
Interest Period for LIBOR Rate Loans (or, in any event, if the Affected Lender
so requests, on such earlier date as may be required by the relevant law,
regulation or interpretation), LIBOR Rate Loans shall, unless then repaid in
full, automatically convert to Base Rate Loans denominated in Dollars. If
conditions subsequently change so that the foregoing conditions no longer exist,
such Lender will promptly notify the Parent and the other Lenders thereof, and
upon the receipt of such notice, the obligations of all Lenders to make, convert
or continue LIBOR Rate Loans shall be reinstated.
SECTION 7.5 Funding Losses. The Parent hereby agrees that upon demand by
any Lender (which demand shall be accompanied by a statement setting forth in
reasonable detail the basis for the calculations of the amount being claimed)
the Parent will indemnify such Lender against any net loss or expense which such
Lender may
sustain or incur (including, without limitation, any net loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain LIBOR Rate Loans), as reasonably
determined by such Lender, as a result of (a) any payment or prepayment or
conversion of any LIBOR Rate Loan of such Lender on a date other than the last
day of an Interest Period for such Loan, or (b) any failure of the Parent to
borrow, continue or convert any Loans on a date specified therefor in a
Borrowing Request or Continuation/Conversion Notice pursuant to this Agreement.
For this purpose, all notices to the Administrative Agent pursuant to this
Agreement shall be deemed to be irrevocable.
SECTION 7.6 Right of Lenders to Fund Through Other Offices. Each Lender
may, if it so elects, fulfill its Commitment as to any Loan by causing its
Lending Office to make such Loan; provided that in such event for the purposes
of this Agreement, such Loan shall be deemed to have been made by such Lender
and the obligation of the Parent to repay such Loan shall nevertheless be to
such Lender and shall be deemed held by it, to the extent of such Loan, for the
account of such branch or affiliate.
SECTION 7.7 Discretion of Lenders as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Lender
shall be entitled to fund and maintain its funding of all or any part of its
Loans in any manner it sees fit, it being understood, however, that for the
purposes of this Agreement all determinations hereunder shall be made as if such
Lender had actually funded and maintained each LIBOR Rate Loan during each
Interest Period for such Loan through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
LIBOR Rate for such Interest Period.
SECTION 7.8 Conclusiveness of Statements; Survival of Provisions.
Determinations and statements of any Lender pursuant to Sections 7.1 through
Section 7.5 shall be conclusive absent manifest error. The provisions of
Sections 7.1 through Section 7.5 shall survive termination of this Agreement
until the expiration of all statutes of limitation applicable thereto.
SECTION 7.9 Alternative Lending Office. If pursuant to the provisions
of this Section 7, Parent is required to pay any additional fees, taxes,
interest or other expense, or if any Lender shall be prohibited from making or
maintaining LIBOR Loans, then the Administrative Agent and each such Lender
shall take any reasonable actions available to it (including designation of a
different Lending Office), consistent with legal and regulatory
restrictions, that will avoid the need to take the steps described in this
Section 7, which will not, in the reasonable judgment of the Administrative
Agent or such Lender, be disadvantageous to the Administrative Agent or such
Lender.
SECTION 8. COLLATERAL AND OTHER SECURITY
SECTION 8.1 Security Documents. Concurrently with or prior to the
initial Borrowing or issuance of the initial Letter of Credit under the Original
Credit Agreement and from time to thereafter:
(a) Security Agreement. The Parent and each of its Subsidiaries
executed and delivered to the Administrative Agent the Security Agreement
(as defined in the Original Credit Agreement) covering, among other things,
inventory, equipment, accounts, and general intangibles of the Parent and
its Subsidiaries.
(b) Borrower Trademark Security Agreement. The Parent executed and
delivered to the Administrative Agent the Borrower Trademark Security
Agreement (as defined in the Original Credit Agreement) covering, among
other things, all of the copyrights the Parent.
(c) Borrower Pledge Agreement. The Parent executed and delivered to
the Administrative Agent a Borrower Pledge Agreement (as defined in the
Original Credit Agreement), covering, among other things, all of the issued
and outstanding capital stock of each Subsidiary of the Parent, including,
without limitation, all the issued and outstanding capital stock of each of
the Co-Borrowers and the Guarantors. Concurrently with the Restatement
Effective Date and as a condition precedent thereto the Parent will affirm
its obligations thereunder pursuant to the Affirmation of Borrower Pledge
Agreement, substantially, in the form of Exhibit E.
(d) Xxxxx Pledge Agreement. Xxxxx executed and delivered to the
Administrative Agent the Xxxxx Pledge Agreement (as defined in the Original
Credit Agreement), covering, among other things, all of the issued and
outstanding capital stock of each Subsidiary of Xxxxx. Concurrently with
the Restatement Effective Date and as a condition precedent thereto Xxxxx
will affirm its obligations thereunder pursuant to the Affirmation of Xxxxx
Pledge Agreement, substantially, in the form of Exhibit F.
(e) IAMD (Canada) Pledge Agreement. IAMD (Canada) executed and
delivered to the Administrative Agent the IAMD (Canada) Pledge Agreement,
covering, among other things, all of the issued and outstanding capital
stock of each Subsidiary of IAMD (Canada). Concurrently with the
Restatement Effective Date and as a condition precedent thereto IAMD
(Canada) will affirm its obligations thereunder pursuant to the Affirmation
of IAMD (Canada) Pledge Agreement, substantially, in the form of Exhibit M.
(f) IAMD, Limited Pledge Agreement. IAMD, Limited executed and
delivered to the Administrative Agent the IAMD, Limited Pledge Agreement,
covering, among other things, all of the issued and outstanding capital
stock of each Subsidiary of IAMD, Limited. Concurrently with the
Restatement Effective Date and as a condition precedent thereto IAMD,
Limited will affirm its obligations thereunder pursuant to the Affirmation
of IAMD, Limited Pledge Agreement, substantially, in the form of Exhibit N.
(g) Subsidiary Guaranty. Each Subsidiary of the Parent executed and
delivered to the Administrative Agent the Subsidiary Guaranty (as defined
in the Original Credit Agreement) guarantying, among other things, the
indefeasible payment in full of the Liabilities and each such Subsidiaries'
obligations under the Subsidiary Guaranty. Concurrently with the
Restatement Effective Date and as a condition precedent thereto each
Subsidiary of the Parent (other than the Co-Borrowers) will affirm its
obligations thereunder pursuant to the Affirmation of Subsidiary Guaranty,
substantially in the form of Exhibit G.
SECTION 8.2 Termination. Concurrently with the Restatement Effective
Date, each of the Security Agreement, Borrower Trademark Security Agreement and
the Fee Mortgages (as defined in the Original Credit Agreement) shall be
cancelled, and the Administrative Agent shall take all actions necessary to
evidence such termination, including, without limitation, the filing of
termination statements in appropriate governmental offices. All reasonable,
documented expenses incurred by the Administrative Agent in connection with
actions taken by the Administrative Agent pursuant to this Section 8.2 shall be
reimbursed by the Parent promptly upon presentation of invoices with respect
thereto.
SECTION 8.3 Further Assurances. The Parent agrees that upon the request
of the Administrative Agent (a) it shall forthwith deliver, or cause to be
delivered to the Administrative Agent, in
due form for transfer, all chattel paper, instruments, securities and documents
of title, if any, at any time representing all or any of the Collateral, and (b)
it shall forthwith execute and deliver or cause to be executed and delivered to
the Administrative Agent, in due form for filing or recording (and pay the cost
of filing or recording the same in all public offices reasonably deemed
necessary by the Administrative Agent), such further assignment agreements,
security agreements, pledge agreements, instruments, consents, waivers,
financing statements, stock or bond powers, searches, releases, and other
documents, and do such other acts and things, all as the Administrative Agent
may from time to time reasonably request to establish and maintain to the
satisfaction of the Administrative Agent a valid first priority perfected Lien
on all Collateral (free of all other Liens, except Permitted Liens) to secure
payment of the Liabilities.
SECTION 9. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make Loans and to
issue or participate in Letters of Credit hereunder, the Parent represents and
warrants to the Administrative Agent, the Foreign Currency Agent and to each of
the Lenders that:
SECTION 9.1 Organization, etc. The Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; each of its Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation; and
the Parent and each such Subsidiary is duly qualified to transact business and
in good standing as a foreign corporation authorized to do business in each
jurisdiction where the nature of its business makes such qualification necessary
and where failure to so qualify reasonably would be expected to have a Material
Adverse Effect. The shares of capital stock of the Parent and each of its
Subsidiaries are owned by the Persons set forth in Schedule 9.1 in the amounts
set forth therein.
SECTION 9.2 Authorization. The Parent and each of its Subsidiaries (to
the extent it is a named party thereto) (a) has the corporate power to execute,
deliver and perform this Agreement and the Related Documents, and (b) has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of this Agreement and the Related Documents.
SECTION 9.3 No Conflict. The execution, delivery and performance by the
Parent and each of its Subsidiaries (to the
extent it is a named party thereto), of this Agreement and the Related Documents
does not and will not (a) contravene or violate any provision of any law,
statute, rule or regulation applicable to such Person, (b) contravene or
conflict with, result in any breach of, or constitute a default under, any
agreement or instrument binding on it which could reasonably be expected to have
a Material Adverse Effect, (c) result in the creation or imposition of or the
obligation to create or impose any Lien (except for Permitted Liens) upon any of
the property or assets of the Parent or any such Subsidiary, or (d) contravene
or violate any provision of the certificate or articles of incorporation or by-
laws of the Parent or any such Subsidiary.
SECTION 9.4 Governmental Consents. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Closing Date and except for
filings or recordings of the UCC statements and any other documents contemplated
to be filed or recorded by this Agreement or any Related Document with respect
to the Collateral) or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required in connection with the
execution, delivery and performance by the Parent or any Subsidiary of the
Parent (to the extent it is a named party thereto) of this Agreement or the
Related Documents, except those which have been made or obtained or will be made
or obtained as and when required thereby.
SECTION 9.5 Validity. The Parent and each of its Subsidiaries has duly
executed and delivered this Agreement (to the extent it is a named party hereto)
and will have duly executed as and when required hereby the Related Documents
(to the extent it is named as a party thereto), and each of such documents
constitutes, or when so delivered will constitute the legal, valid and binding
obligation of the Parent and each such Subsidiary party thereto, enforceable in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency or other laws relating to creditors rights generally.
SECTION 9.6 Financial Statements. The Parent's audited consolidated
financial statements as at December 31, 1997 and its unaudited consolidated
financial statements as at March 31, 1998, and June 30, 1998, copies of which
have been furnished to the Administrative Agent, have been prepared in
conformity with GAAP (except in the case of such unaudited statements, for the
absence of notes and subject to normal year-end adjustments) applied on a basis
consistent with that of the preceding Fiscal Year, except as disclosed therein,
and accurately present in all material respects
the financial condition of the Parent and its Subsidiaries as at such dates and
the results of operations for the periods then ended. The Parent's pro forma
financial statements for the periods ended December 31, 1996 through December
31, 2002, which were delivered to the Administrative Agent on March 14, 1997,
are the most recent pro forma financial statements prepared by the Parent and
the projections and pro forma financial information contained therein are based
upon good faith estimates and assumptions believed by such Persons to be
reasonable at the time made, it being recognized by the Lenders that such
projections as to future events are not to be viewed as facts or guarantees and
that actual results during the period or periods covered by any such projections
may differ from the actual results.
SECTION 9.7 Material Adverse Change. No Material Adverse Change has
occurred since December 31, 1997.
SECTION 9.8 Litigation and Contingent Obligations. No Material
Litigation is pending or, to the Parent's knowledge after due inquiry,
threatened except as set forth (including good faith estimates of the Dollar
amounts involved with respect thereto) in Schedule 9.8. Neither the Parent nor
any of its Subsidiaries has any material Contingent Obligations other than as
provided for or disclosed on Schedule 9.8 or in the financial statements
referred to in Section 9.6.
SECTION 9.9 Liens. None of the assets of the Parent or any its
Subsidiaries is subject to any Lien, except for Permitted Liens.
SECTION 9.10 Subsidiaries. The Parent has no Subsidiaries, except as set
forth on Schedule 9.10.
SECTION 9.11 Pension and Welfare Plans.
(a) During the twelve-consecutive-month period prior to the
Restatement Effective Date and prior to the date of any Borrowing
hereunder, no steps have been taken to terminate or completely or partially
withdraw from any Pension Plan or Welfare Plan, and no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a
Lien on any assets of the Parent or its Subsidiaries under section 302(f)
of ERISA;
(b) no condition exists or event or transactions have occurred with
respect to any Pension Plan which could reasonably be expected to result in
the incurrence
by the Parent or any other member of the Controlled Group of any material
liability, fine, Tax or penalty which could reasonably be expected to have
a Material Adverse Effect;
(c) except as disclosed in Schedule 9.11 or the financial statement
referred to in Section 9.6, neither the Parent nor any member of the
Controlled Group has any vested or contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA;
(d) with respect to each Pension Plan maintained or contributed to by
the Parent which is intended to qualify under Section 401(a) of the Code, a
favorable determination letter has been received from the Internal Revenue
Service stating that such Pension Plan so qualifies and nothing has
occurred since the date of issuance of such determination letter which
would cause any such Pension Plan to cease to qualify under Section 401(a)
of the Code;
(e) each fiduciary (as defined in section 3(21) of ERISA) with respect
to any Pension Plan or Welfare Plan and any Person who handles funds of any
Pension Plan or Welfare Plan is bonded to the extent required under section
412 of ERISA; and
(f) no Pension Plan maintained by or contributed to by the Parent or
any other member of the Controlled Group and subject to section 302 of
ERISA or section 412 of the Code has incurred an accumulated funding
deficiency as defined in section 302(a)(2) of ERISA and Section 412(a) of
the Code, whether or not waived.
SECTION 9.12 Investment Company Act. Neither the Parent nor any
Subsidiary of the Parent is an "investment company" or a company "controlled" by
an "investment company," within the meaning of the Investment Company Act of
1940, as amended.
SECTION 9.13 Public Utility Holding Company Act. Neither the Parent nor
any Subsidiary of the Parent is a "holding company," or a "subsidiary company"
of a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 9.14 Margin Regulation. Neither the Parent nor any Subsidiary of
the Parent is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation G or Regulation U of the Board of
Governors of the Federal Reserve System).
SECTION 9.15 Collateral. As security for the Liabilities, the
Administrative Agent has or upon the filing or recording of the UCC financing
statements in the offices set forth in Schedule 9.15 and the other documents
contemplated to be filed or recorded under the Related Documents and possession
by the Administrative Agent of all Collateral which consists of instruments or
securities as defined in the UCC will have a valid, first-priority perfected
Lien on the Collateral, subject only to Permitted Liens. There are no Liens or
UCC financing statements on file in favor of any Person with respect to the
Parent or any of its Subsidiaries (except for Permitted Liens).
SECTION 9.16 Taxes. Except for extensions which are on file with
appropriate governmental authorities which are in full force and effect as of
the date hereof and set forth on Schedule 9.16, the Parent and each of its
Subsidiaries has filed all tax returns and reports required by law to have been
filed by them and have paid or provided adequate reserves for all Taxes thereby
shown to be owing, except any such Taxes which are being diligently contested in
good faith by appropriate proceedings and for which adequate reserves have been
established and are being maintained in accordance with GAAP. There is no
ongoing audit or, to the Parent's knowledge, other governmental investigation of
the tax liability of the Parent or any of its Subsidiaries and there is no
unresolved claim by a taxing authority concerning the Parent's or of its
Subsidiary's tax liability, for any period for which returns have been filed or
were due. The liability stated for Taxes as of December 31, 1997 in the
financial statements described in Section 9.6 is sufficient in all material
respects for all Taxes as of such date.
SECTION 9.17 Accuracy of Information. All factual information heretofore
or contemporaneously furnished by or on behalf of the Parent or any its
Subsidiaries in writing to the Administrative Agent or any Lender for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is, and all other such factual information hereafter furnished by or on behalf
of the Parent or any of its Subsidiaries to the Administrative Agent or any
Lender will be, true and accurate in every material respect on the date as of
which such information is
dated or certified and as of the Effective Date, and such information is not, or
shall not be, as the case may be, incomplete by omitting to state any material
fact necessary to make such information not misleading.
SECTION 9.18 Environmental Warranties. Except as set forth in Schedule
9.18:
(a) all facilities and property (including underlying groundwater)
owned or leased by the Parent or any of its Subsidiaries have been, and
continue to be, owned or leased by the Parent and its Subsidiaries in
material compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or, to the best
knowledge of the Parent, threatened (i) claims, complaints, notices or
requests for information received by the Parent or any of its Subsidiaries
with respect to any alleged violation of any Environmental Law, or (ii
complaints, notices or inquiries as to the Parent or any of its
Subsidiaries regarding potential liability under any Environmental Law;
(c) there have been no releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Parent or any
of its Subsidiaries that, individually or in the aggregate, have had, or
could reasonably be expected to have, a Material Adverse Effect;
(d) the Parent and each of its Subsidiaries has been issued and is in
material compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters necessary for its
business;
(e) no property now or previously owned or leased by the Parent or
any of its Subsidiaries is listed or, to the best knowledge of Parent,
proposed for listing (with respect to owned property only) on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list of sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or
under any property now or previously owned or leased by the Parent or any
of its Subsidiaries that, individually, or in the aggregate, have had, or
could reasonably be expected to have a Material Adverse Effect;
(g) neither the Parent nor any of its Subsidiaries has directly
transported or directly arranged for the transportation of any Hazardous
Material to any location which is listed or, to the best knowledge of the
Parent, proposed for listing on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list or which is the subject
of federal, state or local enforcement actions or other investigations or
claims which could reasonably be expected to have a Material Adverse
Effect;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the Parent or
any of its Subsidiaries that, individually or in the aggregate, has had, or
could reasonably be expected to have, a Material Adverse Effect; and
(i) to the best of Parent's knowledge, no conditions exist at, on or
under any property now or previously owned or leased by the Parent or any
of its Subsidiaries which, with the passage of time, or the giving of
notice or both, could reasonably be expected to give rise to material
liability under any Environmental Law.
SECTION 9.19 Proceeds. The proceeds of the Revolving Loans will be used
for general working capital purposes.
SECTION 9.20 Insurance. Schedule 9.20 hereto sets forth a true and
correct summary of all insurance carried by the Parent and its Subsidiaries (or
on their behalf). The Parent and its Subsidiaries are, to the Parent's best
knowledge, adequately insured for their benefit under policies issued by
insurers of recognized responsibility. No notice of any pending or threatened
cancellation or material premium increase has been received by the Parent or any
of its Subsidiaries with respect to any of such insurance policies. The Parent
and its Subsidiaries are in substantial compliance with all conditions contained
in such insurance policies.
SECTION 9.21 Securities Laws. Neither the Parent nor any Affiliate of the
Parent, nor anyone acting on behalf of any such Person, has directly or
indirectly offered any interest in the Loans or any other Liabilities for sale
to, or solicited any offer to acquire any such interest from, or has sold any
such interest to, any Person that would subject the issuance or sale of the
Loans or any other Liabilities to registration under the Securities Act of 1933,
as amended.
SECTION 9.22 Governmental Authorizations. The Parent and each of its
Subsidiaries has all licenses, franchises, permits and other governmental
authorizations necessary for all businesses presently carried on by them
(including ownership and leasing the real and personal property owned and leased
by them), except where failure to obtain such licenses, franchises, permits and
other governmental authorizations could not reasonably be expected to have a
Material Adverse Effect.
SECTION 9.23 Representations in Other Agreements True and Correct. Each
of the representations and warranties contained in each Related Document (each
as originally executed notwithstanding any amendment, modification or
termination thereof except to the extent consented to by the Required Lenders)
are true and correct, except to the extent any of such representations and
warranties relate to a specific date, in which case, such representations and
warranties are true and correct as of such specific date.
SECTION 9.24 Business Locations; Trade Names. Schedule 9.24 lists the
principal place of business of each of the Parent and its Subsidiaries together
with each corporate, fictitious or trade name under or by which the Parent or
any of its Subsidiaries conducts or has conducted its business.
SECTION 9.25 Solvency. The Parent and each of its Subsidiaries is, and
after consummation of the transactions contemplated by this Agreement and after
giving effect to all Indebtedness incurred and Liens created by the Parent and
its Subsidiaries in connection herewith and therewith will be, Solvent.
SECTION 9.26 Title IV Compliance.
With respect to each Educational Institution which is subject to Title IV:
(a) Each Educational Institution is (or, in the case of any
Educational Institution acquired on or after the Closing Date, immediately
prior to the acquisition such Educational
Institution was, and in the ordinary course of review by the DOE, will be)
an "eligible proprietary institution of higher education," as defined in 34
C.F.R. Section 600.5.
(b) Each Educational Institution has (or, in the case of any
Educational Institution acquired on or after the Closing Date, immediately
prior to the acquisition such Educational Institution was, and in the
ordinary course of review by the DOE, will be) received an eligibility
notification, as that term is defined in 34 C.F.R. Section 600.21.
(c) The Parent has not changed, nor does the Parent anticipate any
change, in any of the information required by 34 C.F.R. Section 600.30 to
be reported by each Educational Institution to the Secretary, except as
provided in Schedule 9.26(c).
(d) Each Educational Institution has (or, in the case of any
Educational Institution acquired on or after the Closing Date, immediately
prior to the acquisition such Educational Institution was, and in the
ordinary course of review by the DOE, will be) met the standards for
participation in Title IV Programs as set forth in 34 C.F.R., Party 668,
Subpart B, and has a current program participation agreement with the
Secretary.
(e) Each Educational Institution has at all times during which it has
been owned by the Parent or a Subsidiary of the Parent, and to the Parent's
best knowledge or any such Subsidiary's best knowledge at all times prior
thereto, acted with the competency and integrity necessary to qualify as a
fiduciary in the administration of Title IV Programs, as provided by 34
C.F.R. Section 668.82.
(f) To the best of the Parent's and each of its Subsidiaries'
knowledge, and except as disclosed on Schedule 9.26(f), the Parent's and
each such Subsidiary's operations with respect to each Educational
Institution have, in all material respects, been conducted in all material
respects in accordance with the Policy Guidelines and all relevant
standards imposed by Accrediting Bodies, agencies administering state or
federal government student aid programs in which any such Subsidiary
participates, and all other applicable laws and regulations. The Parent
and each of its Subsidiaries have submitted all reports, audits and other
information, whether periodic in nature or pursuant to specific requests,
for each Educational Institution
("Compliance Reports") to all agencies or other entities with which such
filings are required relating to its compliance with (i) applicable
accreditation standards governing its activities or (ii) laws or
regulations governing programs pursuant to which any Subsidiary or its
students receive funding, and (iii) all articulation agreements, if any,
with degree-granting colleges and universities in effect as of the date of
this Agreement. To the best of the Parent's and each such Subsidiary's
knowledge after due inquiry, all such forms and records with respect to
each Educational Institution have been prepared, completed, maintained and
filed in all material respects in accordance with all applicable federal
and state laws and regulations, and are true and correct in all material
respects. To the best knowledge of the Parent and each Subsidiary of the
Parent, all financial aid grants and loans, disbursements and record
keeping relating thereto have been completed in substantial compliance with
all federal and state requirements, and there are no material deficiencies
in respect thereto. To the best of the Parent's and each of its
Subsidiaries' knowledge and except as previously disclosed in prior audits
by DOE, no student at any Educational Institution has been funded prior to
the date for which such student was eligible for funding, and such
student's records conform in all material respects in form and substance to
all relevant regulatory requirements.
(g) Schedule 9.26(g) sets forth the cohort default rate for each
Educational Institution, as calculated and published by the DOE, for each
Educational Institution for the federal fiscal year ended December 31,
1996. Except as set forth in the appeals described on Schedule 9.26(f), to
the best of the Parent's and each of its Subsidiaries' knowledge, such
schedule is materially accurate in all respects. To the best of the
Parent's and each of its Subsidiaries' knowledge, they have received no
notice as to the calculation or publication of the cohort default rates for
either Educational Institution for the federal fiscal year ended December
31, 1997.
As used in this Section, all terms, unless otherwise defined herein, shall
have the meanings as set forth in the citations referred to above or as
otherwise defined in 34 C.F.R., Part 600 or Part 668, as the context requires.
Section 9.27 No Burdensome Restrictions. Neither the Parent nor any of
its Subsidiaries is a party to or bound by any agreement, or subject to any
restriction in its charter, by-laws or any other organizational document, or any
federal, state or local
law, rule or regulation, which could reasonably be expected to have a Material
Adverse Effect.
Section 9.28 Copyrights, Patents, Trademarks and Licenses, etc. The
Parent and each of its Subsidiaries owns or is licensed or otherwise has the
right to use all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises, authorizations and other rights that are
reasonably necessary for the operation of their respective businesses, to
Parent's best knowledge without conflict with or violation of the rights of any
other Person. To the best knowledge of the Parent and its Subsidiaries, no
slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Parent
or any of its Subsidiaries infringes upon any rights held by any other Person.
Except as specifically disclosed in Schedule 9.28, no Litigation regarding any
of the foregoing is pending or to the Parent's and its Subsidiaries' best
knowledge, threatened, and no patent, invention, device, application, principle
or any statute, law, rule, regulation, standard or code is pending or, to the
knowledge of the Parent or such Subsidiary, proposed, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
SECTION 9.29 Title to Assets; Leases. The Parent or its Subsidiaries, as
the case may be, has good, sufficient and legal title to, or leasehold interest
in, all the property and assets reflected as owned in the financial statements
provided under Section 9.6, except such property and assets as have been
disposed of in the ordinary course of business since the relevant dates thereof.
The Parent or its Subsidiaries, as the case may be, enjoys peaceful and
undisturbed possession of all material property subject to leases and all such
leases are valid and in full force and effect. All leases in effect on the
Restatement Effective Date are set forth in Schedule 9.29.
SECTION 9.30 Labor Disputes. There are no strikes or other labor disputes
or grievances pending or, to the best knowledge of the Parent, threatened
against the Parent or its Subsidiaries that could reasonably be expected to have
a Material Adverse Effect.
SECTION 9.31 Year 2000. The Parent and its Subsidiaries have reviewed the
areas within their business and operations which could reasonably be expected to
adversely affected by, and have developed or are developing a program to address
on a timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications used by the Parent and its Subsidiaries may be unable to recognize
and perform properly date-sensitive functions involving certain dates
prior to and any date on or after December 31, 1999) and have made related
appropriate inquiry of material suppliers and vendors. Based on such review and
program, the Parent believes that the "Year 2000 Problem" will not have a
Material Adverse Effect on the Parent. From time to time, at the request of the
Administrative Agent, the Parent and its Subsidiaries shall provide to the
Administrative Agent such updated information or documentation as is requested
regarding the status of their efforts to address the "Year 2000 Problem."
SECTION 10. AFFIRMATIVE COVENANTS
The Parent and each Co-Borrower agrees that, on and after the Restatement
Effective Date and for so long thereafter as any Lender has any Commitment
hereunder or any of the Liabilities remain unpaid or outstanding, the Parent
will:
SECTION 10.1 Reports, Certificates and Other Information. Unless otherwise
provided herein, furnish or cause to be furnished to the Administrative Agent,
the Foreign Currency Agent and each Lender:
10.1.1 Audit Report. As soon as available, but in any event within
ninety (90) days after the end of each Fiscal Year of the Parent: (a)
copies of the consolidated and consolidating balance sheet of the Parent
and its Subsidiaries as at the end of such Fiscal Year and the related
statements of earnings, stockholders' equity and cash flow of the Parent
and its Subsidiaries for such Fiscal Year, in each case setting forth the
figures for the previous year, prepared in reasonable detail and in
accordance with GAAP applied consistently throughout the periods reflected
therein, certified, without Qualification by Xxxxxx Xxxxxxxx, L.L.P. (or
such other independent certified public accountants of recognized standing
reasonably acceptable to the Required Lenders); (b) a certificate from such
accountants containing a computation of, and showing compliance with, each
of the financial ratios and restrictions contained in Section 12, and to
the effect that, in making the examination necessary for the signing of the
annual audit report of the Parent and its Subsidiaries by such accountants,
they have not become aware of any non-compliance by the Parent or any of
its Subsidiaries, or any Default or Event of Default, under this Agreement
or the Related Documents; and (c) a letter
addressed to the Parent from such accountants stating that such accountants
have been informed that a primary intent of the Parent was for the
professional services such accountants provided to the Parent and its
Subsidiaries in preparing the financial statements and the certificate
referred to above to benefit or influence the Administrative Agent and the
Lenders, and identifying the Administrative Agent and the Lenders as
parties that the Parent has indicated intend to rely on such professional
services provided to the Borrower and its Subsidiaries by such accountants;
10.1.2 Quarterly Reports. As soon as available, but in any event
within forty-five (45) days after the end of each Fiscal Quarter of the
Parent, copies of the unaudited consolidated and consolidating balance
sheet of the Parent and its Subsidiaries as at the end of such Fiscal
Quarter and the related unaudited statements of earnings, stockholders'
equity and cash flow for such Fiscal Quarter and the portion of the Fiscal
Year through such Fiscal Quarter, in each case setting forth in comparative
form the figures for the corresponding periods of the previous Fiscal Year,
prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and certified by the
chief financial officer of the Parent as presenting fairly in all material
respects the financial condition and results of operations of the Parent
and its Subsidiaries (subject to normal year-end audit adjustments and
absence of footnotes);
10.1.3 [Intentionally Omitted]
10.1.4 Compliance Certificate. Contemporaneously with the furnishing
of a copy of each set of the statements and reports provided for in
Sections 10.1.1 and 10.1.2, a duly completed certificate, substantially in
the form of Exhibit I (the "Compliance Certificate"), signed by the chief
financial officer of the Parent, containing, among other things, (a) a
computation of, and showing compliance with, each of the applicable
financial ratios and restrictions contained in Section 12, (b) setting
forth the most recent cohort default rate for each Educational Institution,
as calculated and published by the DOE, (c) setting forth the Leverage
Ratio, (d) such other financial ratios required by the DOE including
without limitation revenue breakdowns, acid test
(annually only), profitability 85/15, primary reserve, equity and net
income ratios with respect to each Educational Institution, and (e) to the
effect that as of such date no Default or Event of Default has occurred and
is continuing;
10.1.5 Auditors' Materials. Promptly upon receipt thereof, copies of
all detailed financial and management reports regarding the Parent or any
of its Subsidiaries submitted to the Parent or any such Subsidiary by
independent public accountants in connection with each annual or interim
audit report made by such accountants of the books of the Parent or any of
its Subsidiaries;
10.1.6 Business Plan. As soon as available, but in any event: (a)
within 30 days after the beginning of each Fiscal Year of the Parent, a
copy of the plan and forecast (including a projected closing consolidated
and consolidating balance sheet, income statement and funds flow
statements) of the Parent and its Subsidiaries for such Fiscal Year; and
(b) within 30 days after the end of the second Fiscal Quarter of the Parent
in each Fiscal Year, an update of each plan and forecast delivered with
respect to the Fiscal Year in which such Fiscal Quarter occurs, reflecting
changes in such plan resulting from actual and then anticipated results and
forecasts;
10.1.7 Reports to SEC and to Stockholders. Promptly upon the filing
or making thereof, copies of each filing and report made by the Parent or
any of its Subsidiaries with or to any securities exchange or the
Securities and Exchange Commission and of each communication from the
Parent or to stockholders generally;
10.1.8 Notice of Default, Litigation and License Matters. Promptly
upon learning of the occurrence of any of the following, written notice
thereof, describing the same and the steps being taken by the Parent with
respect thereto: (a) the occurrence of a Default or Event of Default, (b)
the institution of any Material Litigation or the occurrence of any
Material Litigation Development, (c) the commencement of any dispute which
could reasonably be expected to lead to the material modification,
transfer, revocation, suspension or termination of any Related Document,
(d) any Material Adverse Change, or (e) the termination or suspension of
an Educational Institution's participation in Title IV Program, as set
forth in 34 C.F.R. Section 668.26;
10.1.9 Insurance Reports. (a) within ninety (90) days after the end
of each Fiscal Year of the Parent, a certificate signed by a Responsible
Officer that summarizes any changes in the insurance policies described in
Schedule 9.20 (such certificate to be in form and substance satisfactory to
the Administrative Agent), (b) written notification thirty (30) days prior
to any cancellation or material change of any such insurance by the Parent
or any of its Subsidiaries and within five (5) days after receipt of any
notice (whether formal or informal) of cancellation or change by any of its
insurers;
10.1.10 ERISA Liability. Promptly upon learning of the occurrence of
the following, written notice thereof describing the same and the steps
being taken by the Parent with respect thereto: (a) the failure of any
member of the Controlled Group to make a required contribution to any
Pension Plan if such failure is sufficient to give rise to a Lien on the
assets of the Parent or any of its Subsidiaries under section 302(f)(1) or
accumulated funding deficiency under section 302 of ERISA, (b) the
institution of any steps by any member of the Controlled Group to withdraw
from, or the institution of any steps by the Parent to terminate, any
Pension Plan, (c) the taking of any action with respect to a Pension Plan
which could reasonably be expected to result in the requirement that the
Parent or any of its Subsidiaries furnish a bond or other security to the
Pension Benefit Guaranty Corporation or such Pension Plan, or (d) the
occurrence of any event with respect to any Pension Plan which could
reasonably be expected to result in the incurrence by the Parent or any of
its Subsidiaries of any liability, fine, Tax or penalty or any increase in
the vested or contingent liability of the Parent or any of its Subsidiaries
with respect to any post-retirement Welfare Plan benefit if such penalty or
increased liability would exceed $250,000;
10.1.11 Pension Plan Withdrawals. With respect to each Pension Plan
which is a "multi-employer plan," as defined in section 4001 of ERISA as to
which any member of the Controlled Group may incur any liability, (a) no
less frequently than annually, a written estimate (which
shall be based on information received from each such plan, it being
expressly understood that the Parent shall take all reasonable steps to
obtain such information) of the withdrawal liability that would be incurred
by the Controlled Group in the event that all members of the Controlled
Group were to completely withdraw from such plan, and (b) written notice
thereof, as soon as it has reason to believe (on the basis of the most
recent information available to it) that the sum of (i) the withdrawal
liability that would be incurred by the Controlled Group if all members of
the Controlled Group completely withdrew from all multi-employer plans as
to which any member of the Controlled Group has an obligation to
contribute, and (ii) the aggregate amount of the outstanding withdrawal
liability (without unaccrued interest) incurred by the Controlled Group to
multi-employer plans exceeds $250,000;
10.1.12 Other Information Concerning the Parent and its Subsidiaries.
Promptly upon learning thereof, written notice of (a) the occurrence with
respect to the Parent or any Subsidiary of the Parent of any of the events
the occurrence of which in relation to the Parent would constitute an Event
of Default under Sections 14.1.3 or 14.1.4; (b) the execution of any
agreement by the Parent or any of its Subsidiaries to merge with or
consolidate into or with, or purchase or otherwise acquire all or
substantially all of the assets or stock of any class of, or any
partnership or joint venture interest in, any other Person, or for the
sale, transfer, lease or conveyance by the Parent or any of its
Subsidiaries of all or any substantial part of its assets or sale or
assignment without recourse of any of its receivables; and (c) any action
which could reasonably be expected to result in a Change in Control
provided that nothing contained herein shall be deemed to permit any breach
or violation of any other provision of this Agreement or any Related
Document;
10.1.13 Environmental Liabilities. Promptly upon learning thereof,
written notice (together with copies, if available) of all written claims,
complaints, notices or inquiries relating to the Parent's or any of its
Subsidiaries' (a) properties or facilities, or (b) alleged non-compliance
with Environmental Laws, together with a description of the steps being
taken by the Parent or such Subsidiary with respect thereto in
each case, which individually or in the aggregate could reasonably be
expected to cause liability to the Parent or any of its Subsidiaries in
excess of $1,000,000;
10.1.14 List of Officers and Directors. As soon as available, but in
any event (a) within 10 Business Days after each anniversary date of the
initial Loan, a complete list of the officers and directors of the Parent
and each of its Subsidiaries to the extent changed from the prior Fiscal
Year, and (b) within 15 Business Days of any change in such list, written
notice of such change; and
10.1.15 [Intentionally Omitted]
10.1.16 Other Information. From time to time such other information
and certifications concerning the Parent and any Subsidiary of the Parent
as the Administrative Agent or the Lender may reasonably request.
SECTION 10.2 Corporate Existence; Foreign Qualification. Except as
permitted by Section 11.3, do, and cause to be done at all times, all things
necessary to (a) maintain and preserve the corporate existence of the Parent and
each Subsidiary of the Parent, (b) be, and ensure that the Parent and each
Subsidiary of the Parent is, duly qualified to do business and in good standing
as foreign corporations in each jurisdiction where the nature of their business
makes such qualification necessary and where failure to so qualify could
reasonably be expected to have a Material Adverse Effect, and (c) comply, and
cause its Subsidiaries to comply, with all contractual obligations and
requirements of law binding upon such entity, except to the extent that the
failure to comply therewith could not individually or in the aggregate have a
Material Adverse Effect.
SECTION 10.3 Books, Records and Inspections. (a) Maintain, and cause each
of its Subsidiaries to maintain, complete and accurate books and records; (b)
permit, and cause each of its Subsidiaries to permit, access at reasonable times
by the Administrative Agent to its books and records; (c) permit, and cause each
of its Subsidiaries to permit, the Administrative Agent to inspect at reasonable
times its properties and operations; and (d) permit, and cause each of its
Subsidiaries to permit, the Administrative Agent to discuss its business,
operations and financial condition with its officers and internal and external
accountants; provided that, prior to a Default all such inspections
shall be conducted by not more than four persons during normal business hours
after delivery of prior written notice to Parent. All information obtained
during such inspection shall be subject to the provisions of Section 16.3.
SECTION 10.4 Insurance. Maintain, and cause each of its Subsidiaries to
maintain, with responsible insurance companies insurance with respect to its
properties and business (including business interruption insurance) against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses.
SECTION 10.5 Taxes and Liabilities. Pay, and cause each of its
Subsidiaries to pay, when due all Taxes and other material liabilities, except
as contested in good faith and by appropriate proceedings with respect to which
reserves have been established, and are being maintained, in accordance with
GAAP if, and so long as, forfeiture of any part of the Collateral will not
result from the failure to pay any such Taxes or other material liabilities
during the period of any such contest.
SECTION 10.6 Pension Plans and Welfare Plans. Maintain, and cause each of
its Subsidiaries to maintain, each Pension Plan and Welfare Plan as to which it
may have any liability, in compliance in all material respects with all
applicable requirements of law (including any rules and regulations promulgated
thereunder).
SECTION 10.7 Compliance with Laws. Comply, and cause each of its
Subsidiaries to comply, with all federal, state and local laws, rules and
regulations related to its businesses (including, without limitation, all such
laws, rules and regulations relating to Hazardous Materials or the disposal
thereof) if the failure so to comply could reasonably be expected to have a
Material Adverse Effect.
SECTION 10.8 Title IV Compliance. The Parent and each of its Subsidiaries
will:
(a) other than actions for continued DOE and Accrediting Body
approvals obtained in connection with an Acquisition, take no action which
would cause any Educational Institution to fail to qualify as an "eligible
institution," as defined in 34 C.F.R. Section 600.2, including, without
limitation, under 34 C.F.R. Section 600.40;
(b) take no action which would cause any Educational Institution to
fail to qualify as a Proprietary Institution of Higher Education in
accordance with 34 C.F.R. Section 600.5;
(c) not permit more than eighty five percent (85%) of each
Educational Institution's revenues during the most recent twelve-month
period to be derived from Title IV Program funds based on the formula set
forth in 34 C.F.R. Section 600.5(d) and with respect to any Educational
Institution acquired after the Closing Date, the Parent shall have a period
of 12 months to bring such Educational Institution in compliance with the
first clause of this Section 10.8(c);
(d) submit to the Administrative Agent, for each Educational
Institution, within one hundred twenty (120) days following the end of each
Fiscal Year of such Educational Institution, the certified public
accountant's report required by 34 C.F.R. Section 600.5(e), except that the
report shall certify that the percentage of revenue derived from Title IV
Program funds is not more than the amount of its revenue allowable under
Section 10.8(c);
(e) other than actions for continued DOE and Accrediting Body
approvals obtained in connection with an acquisition, maintain each
Educational Institution as an accredited institution, as defined in 34
C.F.R. Section 600.2;
(f) except as provided in 34 C.F.R. Section 600.7(b)(3), take no
action which would cause or permit, for the latest complete award year (i)
more than forty percent (40%) of each Educational Institution's courses to
be "correspondence courses" as calculated based on 34 C.F.R. Section
600.7(b) and defined in 34 C.F.R. Section 600.2; (ii) forty percent (40%)
or more of each Educational Institution's regular enrolled students to be
enrolled in correspondence courses; (iii) twenty percent (20%) or more of
each Educational Institution's regular enrolled students to be
incarcerated; (iv) forty percent (40%) or more of each Educational
Institution's regular enrolled students to have neither a high school
diploma nor the recognized equivalent of a high school diploma in cases
where the Educational Institution provides a four-year or two-year
educational program for which it awards a bachelor's degree or associate's
degree, respectively;
(g) take no action to commence, consent to, or acquiescence in any
case, proceeding, or other action relating
to bankruptcy, insolvency, reorganization or similar relief of any
Subsidiary;
(h) notify the Secretary and the Administrative Agent within ninety
(90) days prior to the expiration of any Educational Institution's program
participation agreement and submit a materially completed application for a
renewal of certification to the Secretary at least ninety (90) days prior
to the expiration of such Educational Institution's current period of
participation or, in the event of the Secretary's selection of an
Educational Institution for recertification, submit a materially completed
application for renewal to the Secretary on or before the date specified in
the notice of selection for recertification;
(i) comply with the application procedures set forth in 34 C.F.R.
Section 600.20 and Section 668.12;
(j) notify the Secretary and the Administrative Agent in writing no
later than seven (7) days after a change occurs in any of the information
provided in any Educational Institution's eligibility application, as set
forth in 34 C.F.R. Section 600.30;
(k) unless such action is contingent upon approval of or a ruling from
the Secretary under 34 C.F.R. Section 600.31, take no action that would
cause any Educational Institution to undergo a change of ownership that
would result in a change of control, as set forth in 34 C.F.R. Section
600.31;
(l) cause each Educational Institution to meet the standards for
participation in Title IV Programs in 34 C.F.R., Part 668, Subpart B, and
to have a current program participation agreement with the Secretary or in
the case of an Acquired Person, immediately following its approval by the
DOE, take such action as is necessary to comply with the foregoing;
(m) cause not less than eighty percent (80%) of the tuition revenue
derived from the programs provided at each Educational Institution to be
derived from programs which qualify as eligible programs pursuant to 34
C.F.R. Section 668.8;
(n) cause each Educational Institution to comply with all of the
factors of financial responsibility set forth in 34 C.F.R. Section 668.15,
except that (i) all payments of
existing debt obligations shall be made within ninety (90) days; and (ii)
no Educational Institution shall have operating losses for the two (2)
latest fiscal years that result in a decrease in such Educational
Institution's Tangible Net Worth in excess of eight percent (8%) of such
Educational Institution's Tangible Net Worth at the beginning of the first
year of the two-year period (operating losses and tangible net worth being
defined as set forth in 34 C.F.R. Section 668.15(B)(7);
(o) monitor and prevent the Federal Xxxxxxxx loan and Federal SLS
published cohort default rate for each Educational Institution from
exceeding twenty-five percent (25%) for any two consecutive 12-month
periods or thirty percent (30%) for any twelve month period; and
(p) cause each Educational Institution to comply with the standard of
conduct required by each fiduciary in the administration of Title IV
Programs, as set forth in 34 C.F.R. Section 668.82.
As used in this Section, all terms shall have the meanings as set forth in
the citations referred to above or as otherwise defined in 34 C.F.R., Part 600
or Part 668, as the context requires.
SECTION 10.9 Maintenance of Permits. Except as permitted pursuant to
Section 11.3, maintain, and cause each of its Subsidiaries to maintain, all
permits, licenses and consents as may be required for the conduct of its
business by any state, federal or local government agency or instrumentality
(including, without limitation, any such license, consent or permit relating to
Hazardous Materials or the disposal thereof) if the failure to maintain such
licenses, permits and consents could reasonably be expected to have a Material
Adverse Effect.
SECTION 10.10 Environmental Compliance. Maintain, and cause each of its
Subsidiaries to maintain, (a) all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and use and operate all of its facilities and properties in material compliance
with all Environmental Laws, and (b) appropriate procedures for the handling of
all Hazardous Materials in material compliance with all applicable Environmental
Laws, and comply in all material respects with such procedures at all times.
SECTION 11. NEGATIVE COVENANTS
The Parent and each Co-Borrower agrees that, on and after the Restatement
Effective Date and for so long thereafter as any Lender has any Commitment
hereunder or any of the Liabilities remains unpaid or outstanding, the Parent
will:
SECTION 11.1 Limitation on Indebtedness. Not, and not permit any of its
Subsidiaries to, incur or at any time be liable with respect to any Indebtedness
except:
(a) Indebtedness outstanding under this Agreement in respect of the
Loans and other Liabilities;
(b) Subordinated Debt in an aggregate principal amount at any time
outstanding not to exceed $5,000,000 without duplication of Indebtedness
permitted by Section 11.1(c); provided that such Subordinated Debt (i) is
unsecured, (ii) principal payments thereon are not paid or scheduled for
payment prior to six months after the Revolving Loan Termination Date, and
(iii) does not contain any event of default, affirmative, negative or
financial covenant that is more onerous than those provided in this
Agreement;
(c) Indebtedness outstanding on the Effective Date described on
Schedule 11.1; provided that Indebtedness permitted by this clause (c) does
not include any extension, renewal or refunding of any such outstanding
Indebtedness;
(d) Indebtedness of Subsidiaries of the Parent owing to the Parent
and unsecured Indebtedness of the Parent owing to its Subsidiaries;
(e) Indebtedness secured by a Permitted Lien;
(f) Indebtedness with respect to Contingent Obligations outstanding
on the Effective Date and described on Schedule 11.1 and other Contingent
Obligations in an aggregate principal amount not exceeding $1,000,000 per
year (excluding any Contingent Obligation with respect to Indebtedness
permitted by Section 11.7 and not set forth on Schedule 11.1);
(g) Indebtedness in respect of deferred Taxes;
(h) unsecured Indebtedness in respect of current accounts payable
arising in the ordinary course of business (including open accounts
extended by suppliers on normal trade terms in connection with purchases of
goods and services, but excluding Indebtedness incurred through the
borrowing of money or Contingent Obligations), except, without duplication,
to the extent permitted by clause (f) above;
(i) Indebtedness in respect of non-current accounts payable which the
Parent is contesting in good faith and by appropriate proceedings, and with
respect to which reserves have been established, and are being maintained,
in accordance with GAAP;
(j) Indebtedness in the nature of seller holdbacks issued by the
Parent with respect to any Educational Institution acquired after the
Closing Date for the period from such Acquisition until receipt of DOE
approval of such Acquisition;
(k) Indebtedness in respect of capital leases entered into by the
Parent or any Subsidiary to finance the acquisition of equipment; provided
that the aggregate amount of all such leases incurred pursuant to this
clause (k) do not exceed $5,000,000; and
(l) Indebtedness (in addition to Indebtedness set forth in clauses
(a)-(k) above) in an amount not to exceed $1,000,000.
SECTION 11.2 Liens. Not, and not permit any Subsidiary of the Parent to,
create, assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except for the following (collectively called "Permitted
Liens"):
(a) Liens in favor of the Administrative Agent, for the benefit of
the Lenders, pursuant to this Agreement and the Related Documents, until
released in accordance herewith;
(b) Liens for current Taxes not delinquent or for Taxes being
contested in good faith and by appropriate proceedings and with respect to
which adequate reserves are being maintained in accordance with GAAP;
(c) Liens in connection with the acquisition of fixed or capital
assets after the date hereof to the extent permitted under Section 12.4 and
attaching only to the property being acquired, provided the Indebtedness
secured thereby does not exceed one hundred percent (100%) of the fair
market value of such property at the time of acquisition thereof nor
$500,000 in the aggregate at any one time outstanding;
(d) Liens shown on Schedule 11.2;
(e) Liens incurred in the ordinary course of business in connection
with worker's compensation, unemployment insurance or other forms of
governmental insurance or benefits or to secure performance of tenders,
statutory obligations, leases and contracts (other than for borrowed money)
entered into in the ordinary course of business or to some obligations on
surety or appeal bonds; and
(f) Liens of mechanics, carriers, materialmen and other like Liens
arising in the ordinary course of business in respect of obligations which
are not delinquent or which are being contested in good faith and by
appropriate proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP.
SECTION 11.3 Consolidation, Merger, etc. Not, and not permit any of its
Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with,
any other Person, or purchase or otherwise acquire all or substantially all of
the assets of any Person (or of any division thereof) except:
(a) any such Subsidiary may liquidate or dissolve voluntarily into,
and may merge with and into, the Parent or any other Subsidiary of the
Parent; and
(b) so long as no Default or Event of Default has occurred and is
continuing or would occur after giving effect thereto, any Permitted
Acquisition, if permitted by Section 12.4 if made as a Consolidated Capital
Expenditure.
SECTION 11.4 Asset Disposition, etc. Not, and not permit any of its
Subsidiaries to, sell, assign, lease, transfer, contribute,
convey or otherwise dispose of, or grant options, warrants or other rights with
respect to, any of its assets to any Person, unless:
(a) such sale, assignment, transfer, lease, contribution, conveyance
or other disposition constitutes bona fide sales of inventory in the
ordinary course of its business or obsolete equipment or other property no
longer used or useful in the business; or
(b) such sale, assignment, transfer, lease, contribution, conveyance
or other disposition constitutes a Permitted Asset Sale; provided that all
such Permitted Asset Sales for such fiscal year shall not exceed
$2,500,000; or
(c) such sale, assignment, transfer, lease, contribution, conveyance
or other disposition constitutes a Sale Leaseback Transaction; provided
that all such Sale Leaseback Transactions for such fiscal year shall not
exceed $10,000,000;
; provided that (i) the consideration received is at least equal to the fair
market value of such assets, and (ii) no Default exists prior to or results from
the consummation of such sale of assets.
SECTION 11.5 Dividends, etc. Except with respect to (a) dividends paid to
the Parent to pay the Liabilities and (b) dividends paid while no Default or
Event of Default exists and, after giving effect to such dividend the Leverage
Ratio does not exceed 1.00:1.00 (i) declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any class of
capital stock (now or hereafter outstanding) of the Parent or on any warrants,
options or other rights with respect to any shares of any class of capital stock
(now or hereafter outstanding) of the Parent (other than dividends or
distributions payable in its common stock or warrants to purchase its common
stock or splitups or reclassifications of its stock into additional or other
shares of its common stock) or apply, or permit any of its Subsidiaries to
apply, any of its funds, property or assets to the purchase, redemption, sinking
fund or other retirement of any shares of any class of capital stock (now or
hereafter outstanding) of the Parent or any option, warrant or other right to
acquire shares of the Parent's capital stock (other than any such payment
pursuant to stock appreciation rights granted and exercised in accordance with
applicable rules and regulations of the Securities and Exchange Commission); and
(ii) make any deposit for any of the foregoing purposes.
SECTION 11.6 Investments. Not, and not permit any of its Subsidiaries to,
make, incur, assume or suffer to exist any Investment in any other Person,
except:
(a) Investments existing on the Restatement Effective Date and
identified in Schedule 11.6;
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 11.1;
(d) in the ordinary course of business, Investments by the Parent in
any of its Subsidiaries, or by any such Subsidiary in any of its
Subsidiaries, by way of contributions to capital or loans or advances;
(e) other Investments in an aggregate amount at any one time not to
exceed $1,000,000; and
(f) Investments in connection with any Permitted Acquisition;
provided, however, that no Investment otherwise permitted by clause (d), (e) and
(f) shall be permitted to be made if, immediately before or after giving effect
thereto, any Default or Event of Default shall exist.
SECTION 11.7 Rental Obligations. Not, and not permit any of its
Subsidiaries to, enter into at any time any arrangement which involves the
leasing by the Parent or any of its Subsidiaries from any lessor of any real or
personal property (or any interest therein) including, without limitation,
operating leases, except arrangements which, together with all other such
arrangements then in effect, will not require the payment of an aggregate amount
of rentals by the Parent and its Subsidiaries in excess of fifteen percent (15%)
of consolidated revenues of the Parent and its Subsidiaries in any Fiscal Year.
SECTION 11.8 Subordinated Debt. Not, and not permit any of its
Subsidiaries to:
(a) make any payment (whether of principal, interest or otherwise) on
any Subordinated Debt prior to the Revolving Loan Termination Date, other
than regularly scheduled payments of interest thereon so long as no Default
or Event of Default exists; or
(b) make any payment on any Subordinated Debt in contravention or
violation of the subordination provisions thereof; or
(c) prepay, redeem, purchase or defease any Subordinated Debt, or
make any deposit for any of the foregoing purposes; or
(d) enter into any amendment, supplement or modification of any
Subordinated Debt, which results in a violation of the foregoing provisions
of this Section or which adversely affects the interests or rights of any
of the Parent, any of its Subsidiaries, the Administrative Agent or the
Lenders.
SECTION 11.9 Take or Pay Contracts. Not, and not permit any of its
Subsidiaries to, enter into or be a party to any arrangement for the purchase of
materials, supplies, other property or services if such arrangement by its
express terms requires that payment be made by the Parent or any Subsidiary of
the Parent regardless of whether such materials, supplies, other property or
services are delivered or furnished to it.
SECTION 11.10 Regulation U. Not, and not permit any of its Subsidiaries
to, use or permit any proceeds of the Loans or LC Obligations to be used, either
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing or carrying margin stock" within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System, as amended
from time to time.
SECTION 11.11 Subsidiaries. Notwithstanding any provision of this
Agreement to the contrary, not, and not permit any of its Subsidiaries to,
create or permit to exist any Subsidiary other than the Subsidiaries of the
Parent listed on Schedule 9.10 unless (a) such new Subsidiary, if domestic,
shall promptly execute and deliver to the Administrative Agent, for the benefit
of the Lenders, a supplement to the Subsidiary Guaranty, whereby such new
Subsidiary agrees to be bound under each such agreement as a "Guarantor" and a
"Subsidiary Grantor", respectively, and (b) (i) if any stock of such new
Subsidiary is owned by another Subsidiary of the Parent, such other Subsidiary
shall promptly execute and deliver to the Administrative Agent, for the benefit
of the Lenders, a pledge agreement, in the form of the Borrower Pledge
Agreement, whereby such other Subsidiary pledges, to secure payment of the
Liabilities and its obligations under the Subsidiary Guaranty, a first priority
security interest (subject only to
Permitted Liens) in all, or if such Subsidiary is organized outside of the
United States, 66-2/3% of the outstanding capital stock of such new Subsidiary
owned by such other Subsidiary, and (ii) if any stock of such new Subsidiary is
owned by the Parent, Xxxxx, IAMD, Limited or IAMD (Canada), the Parent, Xxxxx,
IAMD, Limited, or IAMD (Canada), as the case may be, shall promptly pledge such
stock under the Borrower Pledge Agreement, the Xxxxx Pledge Agreement, the IAMD,
Limited Pledge Agreement, or the IAMD (Canada) Pledge Agreement, as the case may
be; the documents contemplated by each of the foregoing clauses (a) and (b)
shall be in form and substance satisfactory to the Administrative Agent and
shall be accompanied by such other documents, agreements, filings, opinions or
certificates reasonably requested by the Administrative Agent, including,
without limitation, such other deliveries requested by the Administrative Agent
pursuant to Section 8.3.
SECTION 11.12 Other Agreements. Not, and not permit any of its
Subsidiaries to, enter into any agreement containing any provision which (a)
would be violated or breached by the performance of its obligations hereunder or
under any instrument or document delivered or to be delivered by it hereunder or
in connection herewith, (b) prohibits or restricts the creation or assumption of
any Lien upon its properties, revenues or assets (whether now owned or hereafter
acquired) as security for the Liabilities hereunder, (c) prohibits or restricts
the ability of any Subsidiary of the Parent to make dividends or advances or
payments to the Parent, or (d) prohibits or restricts the ability of the Parent
or any of its Subsidiaries to amend or otherwise modify this Agreement or any
other document executed in connection herewith, except in each case, to the
extent required to comply in Title IV or other applicable laws, regulations,
rules and guidelines of governmental authorities and Accrediting Bodies.
SECTION 11.13 Business Activities. Not, and not permit any of its
Subsidiaries to, (a) engage in any type of business except the businesses which
the Parent and its Subsidiaries are presently engaged in or businesses
reasonably related thereto, or (b) substantially alter the methods by which the
Parent or its Subsidiaries conduct such business.
SECTION 11.14 Change of Location or Name. Not, and not permit any of its
Subsidiaries to, change (a) the location of its principal place of business,
chief executive office, major executive office, chief place of business or its
records concerning its business and financial affairs, or (b) its name or the
name under or by which it conducts its business, in each case without first
giving the Administrative Agent at least thirty (30) days'
advance written notice thereof and having taken any and all action reasonably
required or desirable to maintain and preserve the first perfected Lien on
Collateral in favor of the Administrative Agent free and clear of any other Lien
whatsoever (except for Permitted Liens); provided, however, that notwithstanding
the foregoing, neither the Parent nor any of its Subsidiaries shall change the
location of its principal place of business, chief executive office, major
executive office, chief place of business or its records concerning its business
and financial affairs to any place outside the contiguous continental United
States of America or, with respect to the Co-Borrowers, Canada.
SECTION 11.15 Transactions with Affiliates. Except for loans made by the
Parent to officers of the Parent in an aggregate principal amount not to exceed
$150,000, not, and not permit any of its Subsidiaries to, enter into, or cause,
suffer or permit to exist any arrangement or contract with any of its other
Affiliates unless such arrangement (a) is fair and equitable to the Parent or
such Subsidiary, (b) is of a sort which would be entered into by a prudent
Person in the position of the Parent or such Subsidiary with a Person which is
not one of its Affiliates, and (c) is on terms which are not less favorable to
the Parent or such Subsidiary than are obtainable from a Person which is not one
of its Affiliates.
SECTION 11.16 Limitation on Sales and Leasebacks. Not, and not permit its
Subsidiaries to, at any time, directly or indirectly, sell and thereafter lease
back any of their respective assets or properties other than as permitted in
connection with the incurrence of Indebtedness pursuant to Section 11.4(c).
SECTION 11.17 Modification of Certain Documents. The Parent will not
consent to any amendment, supplement or other modification of any of the terms
or provisions contained in, or applicable to, its charter, by-laws or other
organizational documents, or any other acquisition documents relating to any
Acquired Person after the consummation of such Permitted Acquisition without the
prior written consent of the Required Lenders if such amendment, supplement or
other modification could reasonably be expected to have an adverse effect on the
Parent, or any of its Subsidiaries, the Administrative Agent or the Lenders or
any rights of the Administrative Agent or Lenders under this Agreement or any of
the Related Documents.
SECTION 12. FINANCIAL COVENANTS
The Parent agrees that, on and after the Effective Date and for so long
thereafter as any Lender has any Commitment hereunder or any of the Liabilities
remain unpaid or outstanding, it will:
SECTION 12.1 Minimum Interest Coverage Ratio. Not permit the Interest
Coverage Ratio, at the end of any Fiscal Quarter set forth below (for the four
Fiscal Quarters then ended) to be less than the applicable ratio set forth
opposite such Fiscal Quarter.
Fiscal Quarter Minimum Interest
End Date Coverage Ratio
-------------- ----------------
12/31/98 1.75:1.00
6/30/99 2.00:1.00
12/31/99 and thereafter 2.50:1.00
SECTION 12.2 Maximum Leverage Ratio. Not permit the Leverage Ratio to
exceed, at the end of any Fiscal Quarter (for the four Fiscal Quarters then
ended) during any period, 3.50:1.00.
SECTION 12.3 Minimum Net Worth. Not permit Consolidated Net Worth, at the
end of any Fiscal Quarter during any Fiscal Year of the Parent, to be less than
[$78,000,000] plus (a) 50% of Consolidated Net Income, if positive, plus (b) 50%
of the Net Proceeds received by the Parent or its Subsidiaries in connection
with the private or public sale of equity securities after the Restatement
Effective Date.
SECTION 13. CONDITIONS
The obligation of each of the Lenders to make its Loans and of the
Administrative Agent to issue Letters of Credit is subject to the performance by
the Parent of all of its obligations under this Agreement and to the
satisfaction of the following conditions precedent or concurrent:
SECTION 13.1 Initial Borrowing. In the case of the initial Borrowing, the
Administrative Agent shall have received all of the following, each, except to
the extent otherwise specified below, duly executed by a Responsible Officer of
the applicable party, dated the date of such Loan or Letter of Credit (or such
earlier date as shall be satisfactory to the Administrative Agent), in form and
substance reasonably satisfactory to the Administrative Agent,
and each in sufficient number of signed counterparts to provide one for each
Lender:
13.1.1 For each Lender, an appropriately completed Revolving Note,
payable to the order of such Lender in the principal amount of such
Lender's Revolving Loan Commitment;
13.1.2 An appropriately completed Borrowing Request;
13.1.3 Affirmations satisfactory to the Administrative Agent with
respect to the Borrower Pledge Agreement, the Xxxxx Pledge Agreement, the
IAMD, Limited Pledge Agreement, the IAMD (Canada) Pledge Agreement and the
Subsidiary Guaranty from each of the parties thereto;
13.1.4 A favorable opinion of Messrs. Katten, Muchin & Zavis, counsel
to the Parent and its Subsidiaries, substantially in the form of Exhibit J-
1 hereto, and a favorable opinion of Messrs. Fraser & Xxxxxx and XxXxxxxx
Xxxxxxx, counsel to the Co-Borrowers, substantially in the form of Exhibits
J-2 and J-3, respectively, and, in each case, addressing such other legal
matters as the Administrative Agent or its counsel reasonably may require;
13.1.5 An officer's certificate of the Parent and its Subsidiaries,
substantially in the form of Exhibit H hereto and dated as of the date
hereof, signed by the president or a vice-president of the Parent and each
such Subsidiary, as the case may be, and attested to by its secretary,
together with certified copies of the Parent's, and each such Subsidiary's
certificate or articles of incorporation, by-laws, resolutions, incumbency,
solvency and any other documents pursuant to the terms thereof;
13.1.6 Evidence of the good standing of the Parent and each
Subsidiary of the Parent in the jurisdiction in which such Person is
incorporated and any jurisdiction in which Collateral is located;
13.1.7 Evidence that the Parent and the Subsidiaries of the Parent
have obtained the insurance policies required by this Agreement and the
Related
Documents, or such policies have been obtained on the Parent's or such
Subsidiary's behalf;
13.1.8 Evidence that the Parent shall have paid to the Administrative
Agent the fees and expenses provided for herein and in the LaSalle Fee
Letter;
13.1.9 A letter from the Process Agent agreeing to receive service of
process on behalf of the Parent and each of its Subsidiaries pursuant to
Section 17.11 hereof, unless a registered agent exists in the State of
Illinois for such party;
13.1.10 Evidence of each filing, registration or recordation (and
payment of any necessary fee, Tax or expense relating thereto) with respect
to each document (including, without limitation, any UCC financing
statement) required by the Related Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded
in order to create, in favor of the Administrative Agent, for the benefit
of the Lenders, a perfected first Lien on the Collateral (subject to
Permitted Liens);
13.1.11 A calculation of the Leverage Ratio as of the Restatement
Effective Date certified by the chief financial officer of the Parent; and
13.1.12 Such other information and documents as may reasonably be
required by the Administrative Agent and the Administrative Agent's
counsel.
SECTION 13.2 Conditions of each Letter of Credit. The obligation of the
Administrative Agent to issue each Letter of Credit is subject to the conditions
precedent that (a) the Administrative Agent shall have received the related LC
Application and, (b) the conditions set forth in Sections 13.1 and 13.3 have
been satisfied.
SECTION 13.3 All Loans and Letters of Credit. The obligation of each
Lender to make each Loan and of the Administrative Agent to issue each Letter of
Credit is subject to the following further conditions precedent that:
13.3.1 The Administrative Agent and each Lender shall have received a
Borrowing Request or an LC Application;
13.3.2 No Default or Event of Default exists or will result from the
making of such Loan or issuance of such Letter of Credit;
13.3.3 The representations and warranties of the Parent contained in
Section 9 (except, with respect to Loans made or Letters of Credit issued
after the Effective Date, Sections 9.7 and 9.8) are true and correct with
the same effect as though made on the date of the making of such Loan or
issuance of such Letter of Credit (except to the extent they expressly
relate solely to an earlier date, in which case, as of such date);
13.3.4 No Material Litigation exists except as disclosed on Schedule
9.8, and since the Effective Date of this Agreement no Material Litigation
Development has occurred with respect to any Litigation so disclosed on
Schedule 9.8; and
13.3.5 No Material Adverse Change has occurred since the date of the
most recent financial statements delivered or required to be delivered
pursuant to Section 9.6.
SECTION 13.4 Loans for Permitted Acquisitions. In addition to the
satisfaction of the conditions precedent in Sections 13.1, 13.2, and 13.3 (as
applicable), the obligation of the Lenders to make Loans to consummate any
Permitted Acquisition is subject to the following further conditions precedent:
13.4.1 The Parent shall have delivered to the Administrative Agent in
form and detail reasonably satisfactory to the Administrative Agent and the
Required Lenders,
(a) at least thirty (30) days prior to any requested Borrowing,
a duly executed preliminary financing request, substantially in the
form of Exhibit L, outlining the aggregate principal amount of any
requested Borrowing which the Parent will request to facilitate or
consummate such Permitted Acquisition and containing pro forma
financial projections of the Parent and its Subsidiaries for the three
years immediately following such acquisition and after giving effect
thereto; and
(b) certified copies of any acquisition agreements, letters of
intent, asset purchase agreements, stock purchase agreements or other
related documentation or instruments proposed to be executed and
delivered in connection therewith as the Administrative Agent shall
reasonably request and all other documents required to be delivered
pursuant to clause (i) of the definition of "Permitted Acquisition."
13.4.2 The Parent shall have delivered to the Administrative Agent
and the Lenders such other information and documents as may reasonably be
required or requested by the Administrative Agent, the Required Lenders and
the Administrative Agents's counsel.
SECTION 14. EVENTS OF DEFAULT AND THEIR EFFECT
SECTION 14.1 Events of Default. An "Event of Default" shall exist if any
one or more of the following events (herein collectively called "Events of
Default") shall occur and be continuing:
14.1.1 Non-Payment of Loans, etc. (a) Default in the payment or
prepayment when due of any principal on any Loan; or (b) default in the
payment or prepayment when due of any reimbursement obligation with respect
to any LC Obligation; or (c) default and continuance for three (3) days in
the payment when due of any other amount owing by the Parent or any other
Person pursuant to this Agreement.
14.1.2 Non-Payment of Other Indebtedness. Default in the payment
when due (subject to any applicable grace period), whether by acceleration
or otherwise, of any Indebtedness of the Parent or any Subsidiary of the
Parent (other than Indebtedness in respect of this Agreement) in an amount
in excess of $1,000,000 in the aggregate, or default in the performance or
observance of any obligation or condition with respect to any such
Indebtedness if the effect of such default is to accelerate the maturity of
any such Indebtedness or to permit the holder or holders thereof, or any
trustee or agent for such holders, to cause such Indebtedness to become due
and payable prior to its expressed maturity.
14.1.3 Bankruptcy, Insolvency, etc. The Parent or any Subsidiary of
the Parent becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, debts as they become due; or the Parent or
any such Subsidiary applies for, consents to, or acquiesces in the
appointment of, a trustee, receiver or other custodian for the Parent or
such Subsidiary or any property thereof, or makes a general assignment for
the benefit of creditors, or, in the absence of such application, consent
or acquiescence; a trustee, receiver or other custodian is appointed for
the Parent or any such Subsidiary or for a substantial part of the property
of any thereof and is not discharged within forty five (45) days; or any
bankruptcy, reorganization, debt arrangement, or other case or proceeding
under any bankruptcy or insolvency law, or any dissolution or liquidation
proceeding (except the voluntary dissolution, not under any bankruptcy or
insolvency law, of a Subsidiary), is commenced in respect of the Parent or
any such Subsidiary and if such case or proceeding is not commenced by the
Parent or such Subsidiary, it is consented to or acquiesced in by the
Parent or such Subsidiary or remains for forty five (45) days undismissed;
or the Parent or any such Subsidiary takes any corporate action to
authorize, or in furtherance of, any of the foregoing.
14.1.4 Defaults Under this Agreement. Failure by the Parent or the
Co-Borrowers to comply with or perform any of the covenants or agreements
of the Parent or the Co-Borrowers set forth in Sections 10.1, 10.2, 10.3,
10.5, 10.6, 10.7, 10.8, 10.10, 11 and 12.
14.1.5 Other Noncompliance with this Agreement. Failure by the Parent
or any Subsidiary of the Parent to comply with or perform any other
provision of this Agreement or the Related Documents applicable to it
(other than those listed in Sections 14.1.4 or those constituting an Event
of Default under any of the other provisions of this Section 14) and
continuance of such failure for fifteen (15) days after notice thereof to
the Parent from the Administrative Agent or any Lender.
14.1.6 Representations and Warranties. Any representation or
warranty made by the Parent, or any Subsidiary of the Parent herein or in
any of the Related Documents is false or misleading in any material respect
as of the date hereof or as of the date hereafter certified, or any
schedule, certificate, financial statement, report, notice, or other
writing furnished by the Parent, or any such Subsidiary to the
Administrative Agent or any Lender is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.
14.1.7 Pension Plans and Welfare Plans. With respect to any Pension
Plan as to which the Parent or any Subsidiary of the Parent may have any
liability, there shall exist a deficiency of more than $250,000 in the
Pension Plan assets available to satisfy the benefits guaranteeable under
ERISA with respect to such Pension Plan, and steps are undertaken to
terminate such plan or such Pension Plan is terminated or the Parent or
such Subsidiary withdraws from or institutes steps to withdraw from such
Pension Plan or any material Reportable Event with respect to such Pension
Plan shall occur. With respect to any Welfare Plans as to which the Parent
may have any liability, there shall occur any event which could result in
the incurrence by the Parent of any increase in excess of $1,000,000 in the
vested or contingent liability of the Parent or with respect to any post-
retirement Welfare Plan benefit.
14.1.8 Adverse Judgment. One or more final judgments or decrees
shall be entered against the Parent or any of its Subsidiaries involving,
in the aggregate, a liability (not covered by collectible insurance) of
$1,000,000 or more and all such judgments or decrees shall not have been
vacated, satisfied, discharged or stayed or bonded pending appeal within
thirty (30) days from the entry thereof.
14.1.9 Related Documents. Any of the Related Documents shall fail to
remain in full force and effect or any action shall be taken by the Parent
or any Subsidiary of the Parent to discontinue any of the Related Documents
or to assert the invalidity of any thereof.
14.1.10 Change in Control. The occurrence of a Change in Control.
14.1.11 Material Adverse Change. The occurrence of a Material
Adverse Change.
SECTION 14.2 Effect of Event of Default. If any Event of Default
described in Section 14.1.3 shall occur and be continuing, the Commitments (if
they have not theretofore terminated) shall immediately terminate and all
Liabilities shall become immediately due and payable, all without notice,
demand, presentment or protest of any kind; and, in the case of any other Event
of Default, the Administrative Agent may (or shall, upon the written request of
the Required Lenders) declare the Commitments (if they have not theretofore
terminated) to be terminated and all Liabilities to be due and payable,
whereupon the Commitments (if they have not theretofore terminated) shall
immediately terminate and all Liabilities shall become immediately due and
payable, all without presentment, demand, protest or notice of any kind. The
Administrative Agent shall promptly advise the Parent and each Lender of any
such declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing or any provision of Section 17.1,
the declaration of an Event of Default of any event described in Section 14.1.3
may be waived only by the written concurrence of the Lenders holding 100% of the
aggregate unpaid principal amount of the Loans and LC Obligations, and the
declaration of an Event of Default of any other event described in this Section
14 may be waived as provided in Section 17.1.
SECTION 15. THE ADMINISTRATIVE AGENT AND FOREIGN CURRENCY AGENT
SECTION 15.1 Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent and the Foreign Currency Agent to take such
action as agent on its behalf and to exercise such powers to the extent provided
herein or in any document or instrument delivered hereunder or in connection
herewith, together with such other action as may be reasonably incidental
thereto. As to matters not expressly provided for by this Agreement (including,
without limitation, enforcement or collection of this Agreement or any Related
Document) neither the Administrative Agent nor the Foreign Currency Agent shall
be required to exercise any discretion, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders and such instructions
shall be binding upon all Lenders. Under no circumstances shall the
Administrative Agent or the Foreign Currency Agent be required to take any
action which exposes the Administrative Agent or the Foreign Currency Agent to
personal liability or which is contrary to this Agreement or to the Related
Documents or applicable law.
SECTION 15.2 Liability of the Administrative Agent. Neither the
Administrative Agent, the Foreign Currency Agent, nor any of their respective
directors, officers, agents or employees shall be liable to any Lender or any of
such Lender's Affiliates for any action taken or omitted to be taken by it or
them under or in connection with this Agreement and the Related Documents,
except for its or their own gross negligence or willful misconduct as finally
judicially determined by a court of competent jurisdiction. Without limiting the
generality of the foregoing, the Administrative Agent and the Foreign Currency
Agent, as applicable, (a) may treat the payee of any Note as the holder thereof
until the Administrative Agent or the Foreign Currency Agent, as applicable,
receives an executed Assignment Agreement entered into between a Lender and an
Eligible Assignee pursuant to Section 16.1; (b) may consult with legal counsel
(including counsel for the Parent or any of its Subsidiaries), independent
public accountants and other experts or consultants selected by it; (c) shall
not be liable for any action taken or omitted to be taken in good faith by the
Administrative Agent or the Foreign Currency Agent, as applicable, in accordance
with the advice of counsel, accountants, consultants or experts; (d) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any recitals, statements, warranties or representations, whether
written or oral, made in or in connection with this Agreement or the Related
Documents; (e) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, obligations, covenants or
conditions of this Agreement on the part of the Parent or any of its
Subsidiaries or to inspect the property (including, without limitation, any
books and records) of the Parent or any Subsidiary of the Parent; (f) shall not
be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any Related
Document, any Collateral or other support or security, or any other document
furnished in connection with any of the foregoing; and (g) shall incur no
liability under or in respect of this Agreement or any Related Document by
action upon any written notice, statement, certificate, order, telephone
message, facsimile or other document which the Administrative Agent or the
Foreign Currency Agent, as applicable, believes in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person.
SECTION 15.3 LaSalle and Affiliates. With respect to the Loans made by it
and Letters of Credit issued by it, LaSalle shall have the same rights and
powers under this Agreement and the other Related Documents as any other Lender
and may exercise the same as though it were not the Administrative Agent; and
the term "Lender"
or "Lenders" shall, unless otherwise expressly indicated, include LaSalle in its
individual capacity. LaSalle and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, and generally engage in any kind
of business with, the Parent and any of its Subsidiaries and any Person who may
do business with or own securities of the Parent or any such Subsidiary, all as
if LaSalle were not the Administrative Agent and without any duty to account
therefor to the Lenders.
SECTION 15.4 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent, the
Foreign Currency Agent or any other Lender and based on the financial statements
referred to in Section 9.6 and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent, the Foreign Currency Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 15.5 Indemnification. The Lenders agree to indemnify the
Administrative Agent and the Foreign Currency Agent (to the extent not
reimbursed by the Parent), ratably according to their Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or assessed against the
Administrative Agent or the Foreign Currency Agent in any way relating to or
arising out of this Agreement or the Related Documents, or any action taken or
omitted by the Administrative Agent or the Foreign Currency Agent under this
Agreement or the Related Documents; provided that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's or the Foreign Currency Agent's gross negligence or
willful misconduct as finally judicially determined by a court of competent
jurisdiction. Without limiting any of the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its Percentage of
any out-of-pocket expenses (including reasonable counsel fees and expenses)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment, waiver or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under this
Agreement or the Related Documents to the extent that the Administrative Agent
or the Foreign Currency Agent is not reimbursed for such expenses by the Parent.
All obligations provided for in this Section 15.5 shall survive termination of
this Agreement.
SECTION 15.6 Successor Administrative Agent or Foreign Currency Agent, as
the case may be. The Administrative Agent or Foreign Currency Agent, as the
case may be, may resign at any time by giving written notice thereof to the
Lenders and, while no Default or Event of Default exists, the consent of the
Parent (which consent shall not be unreasonably withheld or delayed) and may be
removed at any time with or without cause by the Required Lenders. Upon any
such resignation or removal, the Required Lenders shall have the right to
appoint a successor Administrative Agent or Foreign Currency Agent, as the case
may be. If no successor Administrative Agent or Foreign Currency Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's or
Foreign Currency Agent, as the case may be, giving of notice of resignation or
the Required Lenders' removal of the retiring Administrative Agent or Foreign
Currency Agent, as the case may be, then the retiring Administrative Agent or
Foreign Currency Agent, as the case may be, may, on behalf of the Lenders,
appoint a successor Administrative Agent which shall be a commercial bank having
a combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Administrative Agent or Foreign Currency 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 retiring Administrative Agent or Foreign Currency Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations in its capacity as Administrative Agent or Foreign Currency Agent
under this Agreement. After any retiring Administrative Agent's or Foreign
Currency Agent's resignation or removal hereunder as Administrative Agent, the
provisions of this Section 15 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent or Foreign
Currency Agent under this Agreement.
SECTION 15.7 Collateral Matters. (a) The Administrative Agent is
authorized on behalf of all the Lenders, without the necessity of any notice to
or further consent from the Lenders, from time to time to take any action with
respect to any Collateral or the Related Documents which may be necessary to
perfect and
maintain perfected the security interest in and Liens upon the Collateral
granted pursuant to the Related Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Commitments
and payment in full of all Loans, LC Obligations and all other Liabilities known
to the Administrative Agent and payable under this Agreement or any Related
Document; (ii) constituting property sold or to be sold or disposed of as part
of or in connection with any disposition permitted hereunder; (iii) constituting
property in which the Parent or any of its Subsidiaries owned no interest at the
time such Lien was granted or at any time thereafter; (iv) constituting property
leased to the Parent or any of its Subsidiaries under a lease which has expired
or been terminated in a transaction permitted under this Agreement or is about
to expire and which has not been, and is not intended by the Parent or such
Subsidiary to be, renewed or extended; (v) consisting of an instrument
evidencing Indebtedness or other debt instrument, if the Indebtedness evidenced
thereby has been paid in full; (vi) pursuant to any transaction permitted by
Section 11.3; or (vii) if approved, authorized or ratified in writing by the
Required Lenders or all the Lenders, as the case may be, as provided in Section
17.1. Upon request by the Administrative Agent at any time, the Lenders will
confirm in writing the Administrative Agent's authority to release particular
types or items of Collateral pursuant to this Section 15.7.
SECTION 16. ASSIGNMENTS AND PARTICIPATIONS
SECTION 16.1 Assignments. (a) Each Lender shall have the right at any
time to assign (with the consent of the Parent while no Default or Event of
Default exists, which consent shall not be unreasonably withheld or delayed), to
any Eligible Assignee, all or any part of such Lender's rights and obligations
under this Agreement and each Related Document including its rights in respect
of Loans, Notes, Letters of Credit and LC Obligations and its obligations in
respect of Commitments to make Loans or participate in Letters of Credit. Any
such assignment shall be pursuant to an assignment agreement, substantially in
the form of Exhibit K (an "Assignment Agreement"), duly executed by such Lender
and the Eligible Assignee, and acknowledged by the Administrative Agent. No
assignment by the Administrative Agent shall relieve it from its obligations in
respect of the Letters of Credit, it being understood that any assignment by the
Administrative Agent as to
Letters of Credit shall be deemed to automatically constitute an assignment by
the Administrative Agent and the purchase by the Eligible Assignee of a
participating interest in such Letters of Credit.
(b) Each assignment shall be pro rata with respect to all rights and
obligations of the assigning Lender including the Loans, Notes, LC Obligations
and Commitments of the assigning Lender. Each assignment, if to a Person other
than a Lender or its Affiliate, shall be in an amount equal to or in excess of
$5,000,000 (except for assignments of the entire unpaid balance of a Lender if
less than $5,000,000). In the case of any such assignment, the satisfaction or
waiver of the conditions specified in clause (c) below, this Agreement shall be
deemed to be amended to the extent, and only to the extent, necessary to reflect
the addition of such Eligible Assignee, and the Eligible Assignee shall for all
purposes be a Lender party hereto and shall have, to the extent of such
assignment, the same rights and obligations as a Lender hereunder, including the
right to approve or disapprove actions which, in accordance with the terms
hereof, require the approval of the Lenders or the Required Lenders, as the case
may be, and the obligations to make Loans and to participate in Letters of
Credit.
(c) An assignment shall become effective hereunder when all of the
following shall have occurred:
(i) the Assignment Agreement shall have been executed by the
assigning Lender and the Eligible Assignee,
(ii) the Assignment Agreement shall have been acknowledged by
the Administrative Agent and, while no Default or Event of Default
exists, consented to by Parent (which consent shall not be
unreasonably withheld or delayed),
(iii) unless waived by the Administrative Agent, either the
assigning Lender or the Eligible Assignee shall have paid a processing
fee of $3,500 to the Administrative Agent for its own account (other
than in connection with an assignment to an Affiliate of such Lender),
and
(iv) the assigning Lender and the Administrative Agent shall
have agreed upon a date upon which the Assignment shall become
effective. Upon the Assignment
becoming effective, the Administrative Agent shall forward all
payments of interest, principal, fees and other amounts that would
have been made to the assigning Lender, in proportion to the
percentage of the assigning Lender's rights transferred, to the
Eligible Assignee.
(d) Upon the effectiveness of any assignment, the assigning Lender shall be
relieved from its obligations hereunder to the extent of the obligations so
assigned (except, (i) obligations of the Administrative Agent in respect of the
Letters of Credit issued by it, and (ii to the extent, if any, that the Parent,
any other Lender or the Administrative Agent has rights against such assigning
Lender as a result of any default by such Lender under this Agreement) and
appropriate arrangements shall be made so that, if required, replacement Notes
are issued to such assigning Lender and new Notes or, as appropriate,
replacement Notes are issued to the Eligible Assignee, in each case in principal
amounts reflecting their outstanding Loans as adjusted pursuant to such
Assignment Agreement. Promptly following the consummation of each assignment,
the Administrative Agent shall furnish to the Parent and each Lender, a revised
Schedule 2.1, revised to reflect such assignment.
SECTION 16.2 Participations. Each Lender may grant participations in all
or any part of its Loans, Notes, Letters of Credit and LC Obligations to any
commercial lender or other financial institution. A participant not shall have
any rights under this Agreement or any other document delivered in connection
herewith (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto, which agreement with respect to such
participation shall not restrict such Lender's ability to make any modification,
amendment or waiver to this Agreement without the consent of the participant
except that the consent of such participant may be required in connection with
matters requiring the consent of all of the Lenders under Section 17.1). All
amounts payable by the Parent under this Agreement shall be determined as if the
Lender had not sold such participation. In the event of any such sale by a
Lender of participating interests to a participant, such Lender's obligations
under this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of
any obligation for all purposes under this Agreement, and the Parent and the
Administrative Agent shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
SECTION 16.3 Disclosure of Information. The Parent authorizes each Lender
to disclose to any participant, assignee or Eligible Assignee (each, a
"Transferee") and any prospective Transferee any and all financial and other
information in such Lender's possession concerning the Parent and any of its
Subsidiaries which has been delivered to such Lender by or on behalf of the
Parent or any of its Subsidiaries in connection with such Lender's credit
evaluation of the Parent prior to entering into this Agreement or which has been
delivered to such Lender by or on behalf of the Parent or any of its
Subsidiaries pursuant to this Agreement; provided that each Lender agrees that
it shall hold all non-public, confidential and proprietary information obtained
pursuant to the requirements of this Agreement (the "Information") confidential
in accordance with safe and sound banking and business practices and may only
make disclosure reasonably required by a Transferee or a prospective Transferee
in connection with the contemplated transfer of any portion of the Loans.
Notwithstanding anything to the contrary herein, any Lender may disclose
Information: (a) that consists of information that has been filed with, and
made public and generally available by, any governmental agency, or which has
otherwise been publicly disclosed, (b) to regulatory authorities having
jurisdiction to examine its books and records, (c) pursuant to subpoena or other
legal process or as otherwise required by law, and (d) to its counsel and
auditors in connection with matters concerning the transactions contemplated by
this Agreement.
SECTION 16.4 Foreign Transferees. If, pursuant to this Section 16, any
interest in this Agreement or any Loan, Letter of Credit, Note or LC Obligation
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 (other than any participant), and may cause
any participant, concurrently with the effectiveness of such transfer, (a) to
represent to the transferor Lender (for the benefit of the transferor Lender,
the Administrative Agent, and the Parent) that under applicable law and treaties
no Taxes will be required to be withheld by the Administrative Agent, the Parent
or the transferor Lender with respect to any payments to be made to such
Transferee in respect of the Loans, Notes, Letters of Credit or LC Obligations,
(b) to furnish to the transferor Lender, the Administrative Agent and the Parent
either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service
Form 1001 (wherein such transfer claims entitlement to complete exemption from
U.S. federal withholding tax on all interest payments hereunder), and (c) to
agree (for the benefit of the transferor Lender, the Administrative Agent and
the Parent) to provide the
transferor Lender, the Administrative Agent and the Parent a new Form 4224 or
Form 1001 upon the obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such Transferee, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.
SECTION 17. MISCELLANEOUS
SECTION 17.1 Waivers and Amendments. The provisions of this Agreement and
of each Related Document may from time to time be amended, modified or waived,
if such amendment, modification or waiver is in writing and consented to by the
Parent and the Required Lenders; provided that no such amendment, modification
or waiver:
(a) which would modify any requirement hereunder that any particular
action be taken by all Lenders or by the Required Lenders, shall be
effective without the consent of each Lender;
(b) which would modify this Section 17.1, change the definition of
"Required Lenders," change any Percentage for any Lender (except pursuant
to an Assignment Agreement), reduce any fees (other than any fees payable
to the Administrative Agent for its sole account), extend the Revolving
Loan Termination Date, or subject any Lender to any additional obligations,
shall be effective without the consent of each Lender;
(c) which would permit the release of any Guarantor (except as
otherwise permitted by Section 11.3) or all or substantially all of the
Collateral other than a release in connection with a disposition permitted
hereunder or otherwise permitted under the terms of the Related Documents,
shall be effective without the consent of each Lender;
(d) which would extend the due date for, or reduce the amount of, any
payment or prepayment of principal of or interest on any Loan or any
reimbursement obligation, interest or fees with respect to any LC
Obligation, shall be effective without the consent of the holder of such
Loan or LC Obligation; or
(e) which would affect adversely the interests, rights or obligations
of the Administrative Agent (in its capacity as the Administrative Agent),
shall be effective without consent of the Administrative Agent.
SECTION 17.2 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex or similar
writing) and shall be given to such party at its address or facsimile number set
forth on the signature pages hereof or such other address or facsimile number as
such party may hereafter specify for the purpose by notice to the Administrative
Agent and the Parent. Each such notice, request or other communication shall be
effective (a) if given by facsimile, when such facsimile is transmitted to the
facsimile number specified in this Section and the appropriate answerback is
received, (b) if given by certified mail or overnight mail (via a reputable
courier), 72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid or (c) if given by any other
means, when delivered at the address specified in this Section, provided that
notices to the Administrative Agent under Sections 3, 4 and 15 shall not be
effective until received by the Administrative Agent.
SECTION 17.3 Regulation U. Each Lender represents that it in good faith
is not relying, either directly or indirectly, upon any margin stock (as such
term is defined in Regulation U promulgated by the Board of Governors of the
Federal Reserve System) as collateral security for the extension or maintenance
by it of any credit provided for in this Agreement.
SECTION 17.4 Payment of Costs and Expenses. The Parent agrees to pay on
demand all reasonable expenses of the Administrative Agent (including the
reasonable fees and out-of-pocket expenses of counsel to the Administrative
Agent and of local counsel, if any, who may be retained by counsel to the
Administrative Agent) in connection with
(a) the negotiation, preparation, execution and delivery of this
Agreement and of each Related Document, including schedules and exhibits,
and any amendments, waivers, consents, supplements or other modifications
to this Agreement or any Related Document as may from time to time
hereafter be required, whether or not the transactions contemplated hereby
or thereby are consummated,
(b) the filing, recording, refiling or rerecording of any of the
Related Documents (including the Borrower Pledge Agreement and the Xxxxx
Pledge Agreement) and/or any Uniform Commercial Code financing statements
or Uniform Commercial Code, judgement, tax or other lien searches relating
thereto and all amendments, supplements and modifications to any thereof
and any and all other documents or instruments of further assurance
required to be filed or recorded or refiled or rerecorded by the terms
hereof or of the Related Documents, and
(c) the preparation and/or review of the form of any document or
instrument relevant to this Agreement or any Related Document.
The Parent further agrees to pay, and to save the Administrative Agent and the
Lenders harmless from all liability for, any stamp or other Taxes which may be
payable in connection with the execution or delivery of this Agreement, the
Borrowings hereunder, or the issuance of the Notes, Letters of Credit or any
other Related Documents. The Parent also agrees to reimburse the Administrative
Agent, the Foreign Currency Agent and each Lender upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and legal expenses)
incurred by the Administrative Agent, the Foreign Currency Agent or such Lender
in connection with the enforcement of any Liabilities and the consideration of
legal issues relevant to such enforcement. All obligations of the Parent
provided for in this Section 17.4 shall survive termination of this Agreement
until the expiration of all statutes of limitations applicable thereto. All
demands made under this Section 7.4 shall be accompanied by a statement setting
forth in reasonable detail any such amounts.
SECTION 17.5 Indemnity. The Parent agrees to indemnify the Administrative
Agent, the Foreign Currency Agent and each Lender and hold each Lender harmless
from and against any and all liabilities, losses, damages, costs and expenses of
any kind (including, without limitation, the reasonable fees and disbursements
of counsel for any Lender, the Administrative Agent or the Foreign Currency
Agent) in connection with any investigative, administrative or judicial
proceedings whether or not such Lender shall be designated a party thereto,
which may be incurred by such Lender (or by the Administrative Agent or Foreign
Currency Agent in connection with its actions as Administrative Agent or Foreign
Currency Agent hereunder), relating to or arising out of this Agreement or any
actual or proposed use of the proceeds of the Loans or LC Obligations hereunder;
provided that neither the
Administrative Agent nor any Lender shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct as finally
judicially determined by a court of competent jurisdiction. All obligations of
the Parent provided for in this Section 17.5 shall survive termination of this
Agreement until the expiration of all statutes of limitations applicable
thereto.
SECTION 17.6 Subsidiary References. The provisions of this Agreement
relating to Subsidiaries shall apply only during such times as the Parent have
one or more Subsidiaries.
SECTION 17.7 Captions. Section captions used in this Agreement are for
convenience only, and shall not affect the construction of this Agreement.
SECTION 17.8 Governing Law. This Agreement, the Notes and each Loan and
Letter of Credit and each other Related Document shall be a contract made under
and governed by the laws of the State of Illinois, without regard to conflict of
laws principles. All obligations of the Parent and rights of the Administrative
Agent and the Lenders expressed herein or in the Related Documents shall be in
addition to and not in limitation of those provided by applicable law.
SECTION 17.9 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties on separate counterparts and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Agreement. When counterparts
executed by all the parties shall have been lodged with the Administrative Agent
(or, in the case of any Lender as to which an executed counterpart shall not
have been so lodged, the Administrative Agent shall have received telegraphic,
facsimile, telex or other written confirmation from such Lender of execution of
a counterpart hereof by such Lender), this Agreement shall become effective as
of the Restatement Effective Date hereof, and at such time the Administrative
Agent shall notify the Parent and each Lender.
SECTION 17.10 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE PARENT AND
EACH OF THE CO-BORROWERS, ON BEHALF OF ITSELF AND EACH SUBSIDIARY OF THE PARENT
AND SUCH CO-BORROWER (A) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
ILLINOIS STATE OR FEDERAL COURT SITTING IN CHICAGO, ILLINOIS OVER ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT,
AND THE PARENT AND EACH OF THE CO-BORROWERS HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
SUCH ILLINOIS STATE OR
FEDERAL COURT, AND (B) AGREES NOT TO INSTITUTE ANY LEGAL ACTION OR PROCEEDING
AGAINST THE ADMINISTRATIVE AGENT, THE FOREIGN CURRENCY AGENT OR ANY LENDER OR
THE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR PROPERTY OF ANY THEREOF, ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED DOCUMENT, IN ANY COURT OTHER
THAN AS HEREINABOVE SPECIFIED IN THIS SECTION 17.10. THE PARENT AND EACH OF THE
CO-BORROWERS, ON BEHALF OF ITSELF AND EACH SUBSIDIARY, HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED OF THE PARENT OR SUCH CO-BORROWER BY
LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY
ACTION OR PROCEEDING (WHETHER BROUGHT BY THE PARENT, EITHER CO-BORROWER, ANY
SUBSIDIARY, THE ADMINISTRATIVE AGENT, THE FOREIGN CURRENCY AGENT, ANY LENDER, OR
OTHERWISE) IN ANY COURT HEREINABOVE SPECIFIED IN THIS SECTION 17.10 AS WELL AS
ANY RIGHT IT MAY NOW OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING,
ONCE COMMENCED, TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR
OTHERWISE. THE PARENT AND EACH OF THE CO-BORROWERS ON BEHALF OF ITSELF AND EACH
SUBSIDIARY OF THE PARENT AND SUCH CO-BORROWER AGREES THAT A FINAL JUDGMENT IN
ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
SECTION 17.11 Service of Process. The Parent on behalf of itself and each
Subsidiary of the Parent hereby irrevocably appoints C.T. Corporation (the
"Process Agent"), with an office on the date hereof at 000 Xxxxx XxXxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx, as its agent to receive on behalf of the
Parent and its Subsidiaries and its property service of copies of the summons
and complaint and any other process which may be served in any such action or
proceeding, in each case, in the event it has no other duly appointed registered
agent in Illinois, provided that a copy of such process is also mailed by
registered or certified mail, postage prepaid, to the Parent at its address
specified pursuant to Section 17.2. Such service may be made by mailing or
delivering a copy of such process to the Parent in care of the Process Agent at
the Process Agent's above address, and the Parent hereby irrevocably authorizes
and directs the Process Agent to accept such service on its behalf. The Parent
agrees to indemnify such Process Agent in connection with all matters relating
to its appointment as agent of the Parent for such purposes, to enter into any
agreement relating to such appointment which such Process Agent may customarily
require, and to pay such Process Agent's customary fees upon demand. As an
alternative method of service, the Parent for itself and its Subsidiaries also
irrevocably consents to the service of any and all process in any such action or
proceeding by the mailing of the Parent at its address specified pursuant to
Section 17.2. Nothing in this Section 17.11 shall affect the right
of the Administrative Agent or any Lender to serve legal process in any other
manner permitted by law or affect the right of the Administrative Agent, the
Foreign Currency Agent or any Lender to bring any action or proceeding against
the Parent or its properties in the courts of any other jurisdictions.
SECTION 17.12 WAIVER OF JURY TRIAL. THE PARENT AND EACH OF THE CO-
BORROWERS (ON BEHALF OF ITSELF AND EACH OF ITS SUBSIDIARIES), THE ADMINISTRATIVE
AGENT, THE FOREIGN CURRENCY AGENT, AND EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, ANY RELATED DOCUMENT
OR UNDER ANY OTHER DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH
ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE
A JURY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT,
THE FOREIGN CURRENCY AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT.
SECTION 17.13 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns; provided, however, that: (a) the Parent may
not assign or transfer its rights or obligations hereunder without the prior
written consent of the Administrative Agent, the Foreign Currency Agent and all
Lenders; and (b) the rights of the Lenders to make assignments or grant
participations are subject to the provisions of Section 16.
SECTION 17.14 Judgment Currency.
(a) If, for the purpose of obtaining or enforcing judgment against
the Parent, the Co-Borrowers and/or their respective Subsidiaries in any court
in any jurisdiction, it becomes necessary to convert into a particular currency
(such currency being hereinafter in this Section 17.14 referred to as the
"Judgment Currency") an amount due in another currency (such other currency
being hereinafter in this Section 17.14 referred to as the "Indebtedness
Currency") under this agreement, the conversion shall be made at the Spot Rate
prevailing on the Business Day immediately preceding:
(i) the date of actual payment of the amount due, in the case of any
proceeding in the courts of the State of Illinois or in the
courts of any other
jurisdiction that will give effect to such conversion being made
on such date; or
(ii) the date on which the judgment is given, in the case of any
proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 17.14
being hereinafter in this Section 17.14 referred to as the
"Judgment Conversion Date").
(b) If, in the case of any proceeding in the court of any jurisdiction
referred to in Section 17.14, there is a change in the Spot Rate prevailing
between the Judgment Conversion Date and the date of actual payment of the
amount due, the Parent and Co-Borrowers, jointly and severally, shall pay to the
Lenders such additional amount (if any, but in any event not a lesser amount) as
may be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the Spot Rate prevailing on the date of payment, will produce the
amount of the Indebtedness Currency which could have been purchased with the
amount of Judgment Currency stipulated in the judgment or judicial order at the
Spot Rate prevailing on the Judgment Conversion Date.
(c) Any amount due from the Parent and Co-Borrowers under the
provisions of this Section 17.14 shall be due to the judgment creditor as a
separate debt and shall not be affected by judgment being obtained for any other
amounts due under or in respect of this agreement.
SECTION 17.15 Joint and Several Liability. Each of the Parent and the Co-
Borrowers unconditionally guarantees the payment in full and performance of the
Liabilities arising or related to any Canadian Dollar Loan. Each of the Parent
and the Co-Borrowers shall be liable for all amounts due to the Lenders under
this Agreement with respect to Canadian Dollar Loans, regardless of which such
Person actually receives such Canadian Dollar Loans or the amount of such
Canadian Dollar Loans received or the manner in which the Lenders account for
such Canadian Dollar Loans on their respective books and records. Each of the
Parent and the Co-Borrower's Liabilities with respect to Canadian Dollar Loans
made to it, and each of the Parent's and the Co-Borrower's Liabilities arising
as a result of the joint and several liability of the Parent and the Co-
Borrowers under this Agreement or any Related Document, shall be separate and
distinct obligations, but all such Liabilities shall be primary obligations of
the Parent and each Co-Borrower.
Upon any Event of Default, the Administrative Agent may proceed
directly and at once, without notice, against any of the Parent or either the
Co-Borrowers to collect and recover the full amount, or any portion of the
Liabilities arising or related to any Canadian Dollar Loan, without first
proceeding against any other Person, or against any security or collateral for
such Liabilities. Each of the Parent and the Co-Borrowers consents and agrees
that the Administrative Agent and the Lenders shall be under no obligation to
marshal any assets in favor of the Parent or the Co-Borrowers or in payment of
any or all of such Liabilities.
Delivered at Chicago, Illinois, as of the day and year first above written.
CAREER EDUCATION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------
Title: Chief Financial Officer
---------------------------
Address: 0000 X. Xxxxxxx Xxxx, #000
--------------------------
Xxxxxxx Xxxxxxx, XX 00000
-------------------------
Attention: Xxxxxxx X. Xxxxxxx
-----------------------
Telephone: 847/000-0000
-----------------------
Facsimile: 847/781-3610
-----------------------
INTERNATIONAL ACADEMY OF MERCHANDISING & DESIGN
(CANADA) LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------
Title: Vice President and Treasurer
----------------------------
ACADEMIE INTERNATIONALE dU DESIGN INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------
Title: Vice President and Treasurer
----------------------------
LASALLE NATIONAL BANK, in its
individual corporate capacity and
as Administrative Agent
By: /s/ Xxxxx X. Xxxx
--------------------------------
Name: Xxxxx X. Xxxx
------------------------------
Title: Assistant Vice President
-----------------------------
Notice Information
Address: 000 X. XxXxxxx Xxxxxx, #000
---------------------------
Xxxxxxx, XX 00000
---------------------------
Attention: Xxxxxx Xxxx
-------------------------
Telephone: 312/000-0000
-------------------------
Facsimile: 312/904-8544
-------------------------
Lending Office (Base Rate Loans)
Address: 000 X. XxXxxxx Xxxxxx, #000
---------------------------
Xxxxxxx, XX 00000
---------------------------
Attention: Xxxxxx Xxxx
-------------------------
Telephone: 312/000-0000
-------------------------
Facsimile: 312/904-8544
-------------------------
Lending Office (LIBOR Rate Loans)
Address: 000 X. XxXxxxx Xxxxxx, #000
---------------------------
Xxxxxxx, XX 00000
---------------------------
Attention: Xxxxxx Xxxx
-------------------------
Telephone: 312/000-0000
-------------------------
Facsimile: 312/904-8544
-------------------------
THE BANK OF NOVA SCOTIA, in its
individual corporate capacity and
as Foreign Currency Agent
By: /s/ F.C.H. Xxxxx
--------------------------------
Name: F.C.H. Xxxxx
------------------------------
Title: Sr. Manager Loan Operations
-----------------------------
Notice Information
Address: 000 Xxxxxxxxx Xx. XX, #0000
---------------------------
Atlanta, GA
---------------------------
Attention: Xxxxxxxx January
-------------------------
Telephone: 404/000-0000
-------------------------
Facsimile: 404/888-8998
-------------------------
Lending Office (Base Rate Loans)
Address: 000 Xxxxxxxxx Xx. XX, #0000
---------------------------
Atlanta, GA
---------------------------
Attention: Xxxxxxxx January
-------------------------
Telephone: 404/000-0000
-------------------------
Facsimile: 404/888-8998
-------------------------
Lending Office (LIBOR Rate Loans)
Address: 000 Xxxxxxxxx Xx. XX, #0000
---------------------------
Atlanta, GA
---------------------------
Attention: Xxxxxxxx January
-------------------------
Telephone: 404/000-0000
-------------------------
Facsimile: 404/888-8998
-------------------------
ABN AMRO BANK CANADA, in its
individual corporate capacity
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
----------------------------
Title: Vice President
---------------------------
By: /s/ Xxxxx Xxx
------------------------------
Name: Xxxxx Xxx
----------------------------
Title: Manager, Credit
---------------------------
Notice Information
Address: 00 Xxxxxxxxxx Xxxxxx Xxxx
-------------------------
Toronto, Ontario
-------------------------
Xxxxxx X0X0X0
-------------------------
Attention: Xxxxx Xxxxx
-----------------------
Telephone: 416/000-0000
-----------------------
Facsimile: 416/367-7937
-----------------------
Lending Office (Base Rate Loans)
Address: 00 Xxxxxxxxxx Xxxxxx Xxxx
-------------------------
Toronto, Ontario
-------------------------
Xxxxxx X0X0X0
-------------------------
Attention: Loan Operations
-----------------------
Xxxxxx Xxxxxxxx
-----------------------
Telephone: 416/000-0000
-----------------------
Facsimile: 416/367-1485
-----------------------
Lending Office (LIBOR Rate Loans)
Address: N/A
-------------------------
-------------------------
Attention: _______________________
Telephone: _______________________
Facsimile: _______________________
NATIONAL CITY BANK, in its
individual corporate capacity
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
----------------------------
Title:____________________________
Notice Information
Address: _________________________
_________________________
Attention: _______________________
Telephone: _______________________
Facsimile: _______________________
Lending Office (Base Rate Loans)
Address: _________________________
_________________________
Attention: _______________________
Telephone: _______________________
Facsimile: _______________________
Lending Office (LIBOR Rate Loans)
Address: _________________________
_________________________
Attention: _______________________
Telephone: _______________________
Facsimile: _______________________
COMERICA BANK, in its
individual corporate capacity
By: /s/ Xxxxxxx X. Block
------------------------------
Name: Xxxxxxx X. Block
----------------------------
Title: Vice President
---------------------------
Notice Information
Address: 000 Xxxxxxxx Xxxxxx, XX0000
---------------------------
Xxxxxxx, XX 00000
---------------------------
Attention: Xxxxxxx X. Block
-------------------------
Telephone: 313/000-0000
-------------------------
Facsimile: 313/222-9516
-------------------------
Lending Office (Base Rate Loans)
Address: 000 Xxxxxxxx Xxxxxx, XX0000
---------------------------
Xxxxxxx, XX 00000
---------------------------
Attention: Xxxxxxx Xxxxx
-------------------------
Telephone: 313/000-0000
-------------------------
Facsimile: 313/222-9516
-------------------------
Lending Office (LIBOR Rate Loans)
Address: 000 Xxxxxxxx Xxxxxx, XX0000
---------------------------
Xxxxxxx, XX 00000
---------------------------
Attention: Xxxxxxx Xxxxx
-------------------------
Telephone: 313/000-0000
-------------------------
Facsimile: 313/222-9516
-------------------------
XXXXXX TRUST AND SAVINGS BANK, in its individual
corporate capacity
By: /s/ M. Xxxxx Xxxxx, III
------------------------------
Name: M. Xxxxx Xxxxx, III
----------------------------
Title: Vice President
---------------------------
Notice Information
Address: 000 Xxxx Xxxxxx Xxxxxx
-------------------------
Xxxxxxx, XX 00000
-------------------------
Attention: M. Xxxxx Xxxxx, III
-----------------------
Telephone: 312/000-0000
-----------------------
Facsimile: 312/293-5283
-----------------------
Lending Office (Base Rate Loans)
Address: 000 Xxxx Xxxxxx Xxxxxx
-------------------------
Xxxxxxx, XX 00000
-------------------------
Attention: Xxxxx Xxxx
-----------------------
Telephone: 312/000-0000
-----------------------
Facsimile: 312/293-5283
-----------------------
Lending Office (LIBOR Rate Loans)
Address: 000 Xxxx Xxxxxx Xxxxxx
-------------------------
Xxxxxxx, XX 00000
-------------------------
Attention: Xxxxx Xxxx
-----------------------
Telephone: 312/000-0000
-----------------------
Facsimile: 312/293-5283
-----------------------
UNION BANK OF CALIFORNIA, N.A., in its individual
corporate capacity
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
--------------------------------
Notice Information
Address: 000 X. Xxxxxxxx Xx., 15/th/ Fl.
-------------------------------
Xxx Xxxxxxx, XX 00000
-------------------------------
Attention: Commercial Finance Div.
-----------------------------
Telephone: 213/000-0000
-----------------------------
Facsimile: 213/236-6089
-----------------------------
Lending Office (Base Rate Loans)
Address: _______________________________
_______________________________
Attention: _____________________________
Telephone: _____________________________
Facsimile: _____________________________
Lending Office (LIBOR Rate Loans)
Address: _______________________________
_______________________________
Attention: _____________________________
Telephone: _____________________________
Facsimile: _____________________________
THE BANK OF MONTREAL, in its individual corporate
capacity
By: /s/ Xxxxxxx X. XxXxxx
------------------------------
Name: Xxxxxxx X. XxXxxx
----------------------------
Title: Relationship Manager
---------------------------
Notice Information
Address: First Canadian Place
-------------------------
Mezzanine Level
-------------------------
P.O. Box 3100
-------------------------
King Street W
-------------------------
Toronto, Ontario
-------------------------
Canada M5X-1A3
-------------------------
Attention: Xxxxxxx X. XxXxxx
-----------------------
Telephone: 416/000-0000
-----------------------
Facsimile: 416/867-2744
-----------------------
Lending Office (Prime Rate Loans)
Address: First Canadian Place
-------------------------
Mezzanine Level
-------------------------
P.O. Box 3100
-------------------------
King Street W
-------------------------
Toronto, Ontario
-------------------------
Canada M5X-1A3
-------------------------
Attention: Xxxxxxx X. XxXxxx
-----------------------
Telephone: 416/000-0000
-----------------------
Facsimile: 416/867-2744
-----------------------
